Poor Performance Pushes Charlemagne Profit Down

Sep 4 2008 | 10:19am ET

Poor performance is taking its toll on Charlemagne Capital.

The London hedge fund manager said that its first half profits fell 30% and that assets under management dropped more than 11% due to the “disappointing” performance of its hedge funds. Most of the decline could be attributed to performance fees: Performance fee revenue plummeted nearly 80% to US$3.3 million, while accruing performance fees nearly disappeared, dropping to just US$700,000 from US$34 million in the year earlier period.

“It is unlikely that performance fees will make a significant contribution to overall profitability for 2008,” the firm said.

All told, pre-tax profits for the first six months of the year were US$13.2 million, compared to US$18.7 million in the first half of 2007. Revenues fell by more than a quarter to US$30.2 million. Assets under management fell 11.6% to US$5.7 billion, despite net subscriptions increasing during the half.

On the bright side for Charlemagne, management fees rose 32.1% to US$25.1 million.

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