City of London Investment Group showed solid progress through 2021

City of London Investment Group plc (LON:CLIG) has announced that it has today made available on its website,, the Half Year Report and Financial Statements for the six months ended 31st December 2021.


  • Funds under Management (FuM) of US$11.1 billion (£8.2 billion) at 31st December 2021. This compares with US$11.4 billion (£8.3 billion) at the beginning of this financial year on 1st July 2021 and US$10.9 billion (£8.0 billion) at 31st December 2020.
  • FuM at 31st January 2022 of US$10.8 billion (£8.0 billion)
  • Net fee income representing the Group’s management fees on FuM was £29.8 million (31st December 2020: £22.6 million)
  • Underlying profit before tax* was £15.5 million (31st December 2020: £11.2 million). Profit before tax was £13.6 million (31st December 2020: £8.8 million)
  • Maintained interim dividend of 11p per share (31st December 2020: 11p) payable on 25th March 2022 to shareholders on the register on 25th February 2022
  • Special dividend of 13.5p per share (31st December 2020: nil) payable on 25th March 2022 to shareholders on the register on 25th February 2022

*This is an Alternative Performance Measure (APM).


The familiar refrain that “it ain’t over, till it’s over” has often been used in connection with sporting contests but the events of recent months show that it has at least equal validity to global pandemics. Just as the world was recovering some level of normality in the autumn of 2021, courtesy of a global vaccination campaign that now totals 10.4 billion doses, the Omicron variant brought that progress to an abrupt but temporary halt in the closing weeks of the year. The good news for investors is that markets have become less “COVID-sensitive” with each wave recognising perhaps that, over time, vaccine-led herd immunity will outweigh any risk of a return to the extreme social disruption of the last two years.

While the ripple effects of the pandemic will continue to reverberate for some time, particularly in relation to supply chain bottlenecks, equity markets are increasingly directing their focus back to the more traditional issues of growth, inflation, monetary policy and geopolitics, each of which present potential challenges in 2022. Meanwhile, as CEO Tom Griffith explains in his report, both CLIG operating subsidiaries have continued to navigate the challenges posed by on/off remote working requirements with full functionality and, on behalf of your Board, I would like to extend our sincere thanks once again to our hard-working employees across all the offices.

Assets and performance

Funds under Management (FuM) fell by 2.6% in the six months ended 31st December 2021 to US$11.1 billion due to mixed conditions across the Group’s products but were still 2% ahead of the comparable figure at the end of 2020. Although the more defensive, value-driven characteristics of closed-end funds (CEFs) provided positive attribution for the Emerging Markets (EM) strategy in the half year, the 23% fall in Chinese equities, which accounts for around one-third of the index, proved a major drag on both the benchmark and FuM, with an 11% fall over the period to US$4.8 billion. Despite lacklustre markets in the International strategy, this product has continued to attract impressive inflows. The strategy FuM stands at  US$2.1 billion, a 14.2% increase in FuM as compared to 30th June 2021 and a 26.3% increase in FuM as compared to 31st December 2020. While the aggregate FuM numbers at CLIM were little changed over the half-year period at US$7.2 billion, each of the major strategies recorded robust outperformance against their respective benchmarks. Looking forward, the combination of this strong relative performance and an ability to re-commence face-to-face meetings with clients and consultants are anticipated to translate into further inflows in the coming months.

KIM’s FuM grew by c.1% to US$3.9 billion as compared to 30th June 2021 despite the normal seasonal withdrawals that arise in the final weeks of the calendar year. In comparison with 31st December 2020, however, FuM was 7% higher, thanks mainly to very strong relative performance, particularly in the dominant fixed income space. The issuance of approximately 250 Special Purpose Acquisition Companies (SPACs), represents an addition of US$54 billion to KIM’s investable universe. SPACs can offer a fixed income return profile with lower risk, and potential for upside. Pre-merger SPAC investments were an important contributor to returns for KIM in the first half of the financial year. With c.60% of KIM’s assets invested in fixed income securities, it is very encouraging to note that they have been able to show strong performance through a period of rising inflation and interest rate expectations and this bodes well for both client retention and new business potential in the coming year.


For CLIG, the six months ended December 2021 showed solid progress and it was pleasing to see the positive impact of the merger with KIM in terms of both profits and earnings per share (EPS). Profit before tax for the six months to 31st December 2021 was £13.6 million (31st December 2020: £8.8 million). Following previous practice, I will comment on our results by reference to an Alternative Performance Measure (APM) of “Underlying” profits and EPS, which exclude exceptional or non-recurring items, as we believe that these provide shareholders with a more accurate measure of the Group’s financial performance.

Underlying profit before tax of £15.5 million was 38.4% up on the equivalent period of 2020, but this figure translates to a 7.8% gain when adjusted for the limited three-month contribution from KIM in the previous period. KIM’s underlying profit before tax of £6.9 million was marginally ahead of the previous period on a comparable basis, having absorbed increased costs associated with upgrades to KIM’s operating infrastructure. The 11% increase in CLIM’s contribution to £8.6 million owes much to the buoyancy of global equity markets in the early months of 2021, which partially reversed in the EM space in the second half of calendar year 2021. The combination of a 10% fall in the MXEF EM index coupled with a 3% rise in the average rate for sterling (vs. US$) in the six months to 31st December 2021 pared growth somewhat but, pleasingly, the blended net fee margin across both operating subsidiaries remained steady at an average rate of 74 bps. Diluted EPS for the first half of the financial year was 21.2p per share on a statutory basis, while underlying EPS rose 3% to 24.1p (2020: 23.4p) on a fully diluted basis.


Inflationary pressures and a near-term tapering of quantitative easing signal a clear tightening bias from Central Banks and, mindful that economic activity remains “COVID-constrained” in many countries, the outlook for global equities is far from assured in 2022. Against this uncertain background, your Board has declared an unchanged interim dividend of 11p per share, a level which leaves a small degree of “headroom” within the stated dividend cover policy of 1.2/1 over a rolling five-year period. At the same time, the Board is conscious that any accumulation of capital over and above that which is needed for capital investment, regulatory requirements and a prudential cash buffer should be returned to shareholders. Accordingly, the Board has also declared a special dividend of 13.5p per share, making this the second such special distribution in the last three years. Both dividends will be paid on 25th March 2022 to those shareholders registered at the close of business on 25th February 2022.

The Board

There were no changes to the Board’s membership during the half-year period. However, as acknowledged in our 2021 Annual Report & Accounts, compliance with the UK Corporate Governance Code in respect of independence, together with upcoming rules concerning diversity and inclusion, will necessitate significant changes to the Board’s composition going forward. Following a thorough review of these issues, later this year we will present shareholders with a road map towards compliance, recognising the need to reconcile an appropriate level of continuity with adherence to our governance obligations as a UK-listed entity.


The proposed changes to the Board composition, referred to above, form only part of CLIG’s commitment to address ESG challenges both within the business and in the wider communities in which we operate. While many of the criteria being codified to measure ESG performance have been a natural part of our culture over many years, it is important for us to record our “ESG modus operandi” in a more formal way in order to apprise shareholders of our ongoing commitment to good governance. To that end, our website has been updated with an Anti-Slavery statement and regular engagement meetings between employees and independent Directors have been established on a rotational basis. Increased emphasis on employee training and initiatives to prioritise diversity and inclusion through each layer of the business also form part of this process. CLIG is firmly committed to the goal of high attainment in the ESG sphere.


As mentioned earlier, global markets will be confronted this year with progressive reductions in monetary stimulus as pandemic support measures are gradually withdrawn and this is likely to create headwinds for both equity and debt markets. Indeed, benchmarks such as the tech-heavy NASDAQ, which rose by c.130% in the 20 months to November 2021, have appeared more vulnerable to a correction recently with a 9% fall over the last two months. While international equity markets may be less vulnerable to these tech valuation bubbles, the tapering of monetary support, ongoing supply disruptions and geopolitical tensions each have the capacity to destabilise markets in the months ahead and point to the need for a cautious stance. Within the EM space, China will continue to exert a strong influence and the recent tightening of the regulatory environment, coupled with large-scale mobility restrictions arising from China’s zero-tolerance COVID policy will constrain both the pace and timing of an economic recovery.

It is now 15 months since the merger with KIM and we believe that the results during this period demonstrate the benefits of a more diversified revenue base in terms of both clients and market segments. Thus, despite the clear challenges ahead, we remain optimistic that the value-driven characteristics of CEFs, supported by a macro-economic research focus, will continue to offer enhanced relative performance for our clients and shareholders over the longer term.

Barry Aling


17th February 2022

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