18 September 2020
By Maynard Paton
Results summary for City of London Investment (CLIG):
- Funds under management (FuM) endured a rollercoaster second half, but finished the year up 2% to lift profit by 10% and the dividend by 11%.
- FuM ‘capacity’ has become an issue, and explains CLIG’s limited past progress and probably prompted the upcoming merger.
- The Karpus deal appears logical, but similar to CLIG the merger partner has struggled to attract new clients.
- The accounts continue to sport high margins, decent cash flow, high equity returns and net cash.
- A potential P/E of 11 and yield of 7.5% seem attractive, although the shares have been rated modestly for years. I continue to hold.