Clico Investment Fund admin fees shoot up

Aided by $50 million in dividends, the Clico Investment Fund (CIF) reported net income of $56.52 million, in its unaudited statement of comprehensive income for the quarter ended June 30, released on the T&T Stock Exchange (TTSE) on August 26. In the previous quarter, ended March 31, the fund posted a $6.99 million net income. As fast as its net income went up, so too did the fund’s administration fee, shooting up almost half of a million dollars, from $73,750 for the quarter ended March 31 to $573,026 for the quarter ended June 30. 

In the quarter ended June 30, the fund also developed operating expenses of $61,870. The fund had no operating expenses for the quarter ended March 31. Meanwhile, interest gained by the fund fell from $7,375,002 for the quarter ended March 31 to $7,212,189 for the quarter ended June 30. Directors’ fees remained fixed at $107,250 for the quarter, while advertising fees fell quarter-on-quarter from $34,334 to $20,727. Overall expenses rose quarter-on-quarter from $383,088 to $786,390.

With units trading on the TTSE since January 2, 2013, the CIF is a closed-end mutual fund, which means its unit holders cannot redeem units for cash prior to the redemption date of January 2, 2023. The fund started off capitalised with an asset value of $5.10 billion—204 million units at a net asset value (NAV) of $25 per unit—consisting of at least 70 per cent shares of Republic Bank Ltd (RBL) and government securities with a coupon of 4.25 per cent for a term of 25 years. 

According to its unaudited statement of changes in equity for the quarter ended June 30, the fund’s total balance rose from $5.5 billion as at March 31 to $5.6 billion as at June 30. A First Citizens Research & Analytics note on August 22 had said: “Presently, RBL’s market price is $121.90 resulting in a CIF NAV of $27.74. At a listed share price of $22.00 on the TTSE, CIF is trading at a discount to the NAV.  “Through the listing, investors will have indirect access to RBL shares, which is usually high in demand, but are short in supply on the market.  “One RBL share is equivalent to four CIF units, since RBL share price is currently $121.90, CIF cost per units should be $30.48 ($121.90 divided by 4). “Since CIF is currently $22.00, investors holding CIF shares have exposure to RBL shares at a significant discount through CIF.”