Charlemagne Capital. Dog with Putin's fleas or value situation?

Charlemagne Capital     (£CCAP)    10.5p   Mkt Cap £29m     EV £14m

With markets up and defying the usual Gexit issues I decided to do a spot of contrarian bottom fishing using the momentum screens (3m RSI <-15, 6m RSI <-25) combined with some basic value parameters PE<16x, ROCE >10% (with all the usual caveats that the PE could well be >15 in some of these companies as the EPS may be disappearing fast).  Sometimes this throws up interesting situations (aside from the JQW (LON:JQW) or Zanaga Iron Ore (LON:ZIOC) s of this world) where the baby has been thrown out with the bath water.

I came across Charlemagne Capital, with a StockRank of 97

Charlemagne is an Emerging Markets focused fund manager,
specialising in equities and in particular Eastern European equities. Hmmm popular at the moment !

Why is it potentially interesting?

Mkt Cap = £30m

No debt

Net Cash on B/S at H1 14 = $19.3m =  £12.5m

Also like Ashmore (LON:ASHM) it has seeded some new funds from its own balance sheet. The market value of these funds WAS $10m. Given that a fair proportion may be in E European start up funds I think its prudent to haircut this by 35% to account for negative market movements. So $10m * (1-0.35) = $6.5m = £4m

So overall net liquid resources roughly £16m

Therefore Enterprise Value is ROUGHLY £30m - £16m = £14m

OK so what about the funds it manages?

It manages 4 types of funds

Magna: The Magna Umbrella Fund plc is Charlemagne Capital's UCITS fund range. These funds are all managed on a fundamental, bottom-up stockpicking  investment process.

OCCO: This is an absolute (hedge) fund targeting Eastern Europe. Max volatility = 12%

Institutional: Charlemagne Capital manages a number of segregated regional and global accounts for its institutional clients.

Specialist: Charlemagne Capital's specialist funds include both long-only funds and closed-end property funds. Illiquid….

The asset gathering record is patchy with good growth in the higher margin Magna retail funds offset by the decline in the lower margin Institutional funds.

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About the Author

VegPatch

Premium Member

A Portfolio Manager with over 20 years UK equity experience. Currently looking for a job (please email me if you think I could help your organisation). When not ferrying the kids around or in the veg patch I love analysing shares and taking positions on both the long and the short side. I look for undervalued compounders and occasional work-out situations. I believe good / bad management has a massive impact on the outcomes for shareholders. Email me if you have any interesting ideas that fit into my criteria. more »