Join our daily newsletter At The Bell to receive exclusive market insights
- Contango Asset Management (CGA) lost $126 million of funds under management over Q1 2020
- In mid-February, the company had $650 million in group funds under management
- Incredibly, over just 45 days, the funds dropped to $524 million
- Still, the company reduced costs by 12 per cent and increased cash receipts by seven per cent over the quarter
- Shares in Contango (CGA) have been in a trading halt since April 27, but last traded for 26 cents each
- The company has a market cap of $12 million
Contango Asset Management (CGA) lost $126 million in funds under management in just 45 days as COVID-19 hammered equity markets.
The huge loss for the equity investors, however, is surprisingly above industry averages of between 25 and 30 per cent. Contango lost just 19 per cent.
On February 20, the asset management firm had $650 million under management. Just 45 days later, on April 7, the company had $524 million under management.
Contango managed to outperform other equity investors through the company’s funds managed by WCM International, which specialises in small-cap, growth market investments.
These small-cap companies, which have been able to navigate and gain market position throughout the coronavirus crisis, are where the best gains have been seen for equity investors, and this is reflected in the slightly better-than-market-average results.
This shows it’s not all doom and gloom for Contango. In fact, despite the crisis, the company posted a seven per cent increase in revenue along with a 12 per cent reduction to costs.
Contango is sitting on a bank balance of $2.4 million in cash and another $5 million in receivables at the end of March. This $5 million relates to the assignment of an investment to NAOS Asset Management that is payable in annual instalments in June each year over the next three years.
Contango Shares in Contango (CGA) have been in a trading halt since April 27 but last traded for 26 cents each.
