Clime Asset Management reduced its administration and occupancy costs by 24 per cent in fiscal 2011, chairman Mark Osborn said yesterday.
“Our focus for the past few years has been to ensure that our recurring fee income exceeds our expenses,” Osborn said in his address to the listed funds management company’s annual shareholders’ meeting.
He said Clime had increased its management fee over the year to June to $2 million from $1.8 million on funds under management (FUM) of about $230 million.
However, market volatility halved its performance fee income to $1.3 million from $2.7 million, despite outperformance by two of its three funds.
Profit after income tax fell about 32 per cent over the year to June to $2.12 million as the investment manager grappled with volatile financial markets.
“However, in current market conditions, we believe that holding high levels of cash and liquid investments will stand us in good stead, so we plan to maintain our cash holdings and investments in our own funds at close to current levels,” Osborn said.
He said Clime had cut $1.2 million from its costs, made up of savings of $550,000 on human resources, $240,000 on investment management, $160,000 on technology costs, $150,000 on marketing and $100,000 in professional fees.
The company had moved to new offices, resulting in further cost savings, he said.
Cost reduction would remain a focal point, in line with the company’s plan to lift return on equity to 15 per cent by June 2013, up from 8.2 per cent at the end of fiscal 2011, he said.
He said Clime planned to reach its target by increasing recurring income through continued growth in FUM, both organic and through acquisition, cost control, and reducing capital employed on the balance sheet.
