City of London issued a brief trading statement this morning ahead of their AGM. Funds under management were $3.92bn as of the end of 15 October. This is 9% up on the $3.6bn figure as of the end of September, in line with the bounce in emerging markets.
The company reaffirmed the pipeline of potential mandates at $750m across all classes of business, with the hope of gaining at least $250m of those. So far it has confirmed mandate wins of $75m, giving some optimism that the $250m figure may prove conservative.
The statement gave no news on profitability, which is not surprising given the short time since the last statement.
The prospective P/E of 14.1 times is a discount to the peer group. The yield of 7.3% is very attractive and should at the very least provide support for the shares in the current volatile markets.
To date City of London has not experienced the sorts of outflows that some other emerging market fund managers have, aided by its good performance and strong client servicing. Further EM volatility may increase that risk.
City of London has continued to show robust performance in challenging market conditions. The valuation remains reasonable. Without a market recovery the dividend may be uncovered in 2016, but with over £10m of cash the company can easily cover the £0.2m gap that current market levels imply.