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) = $6.5m = £4m
So overall net liquid resources roughly £16m
Therefore Enterprise Value is ROUGHLY £30m - £16m = £14m
OK so what about the funds it manages?
It manages 4 types of funds
Magna: The Magna Umbrella Fund plc is Charlemagne Capital's UCITS fund range. These funds are all managed on a fundamental, bottom-up stockpicking investment process.
OCCO: This is an absolute (hedge) fund targeting Eastern Europe. Max volatility = 12%
Institutional: Charlemagne Capital manages a number of segregated regional and global accounts for its institutional clients.
Specialist: Charlemagne Capital's specialist funds include both long-only funds and closed-end property funds. Illiquid….
The asset gathering record is patchy with good growth in the higher margin Magna retail funds offset by the decline in the lower margin Institutional funds.
Charlemagne Capital AUM ($m) | |||||
Yr end 31 Dec | |||||
31-Dec-10 | 31-Dec-11 | 31-Dec-12 | 31-Dec-13 | 31-Dec-14 | |
Magna | 589 | 260 | 364 | 560 | 654 |