New Capital
Contrarian, Deep Value, long/short equity, special situations

City Of London Investment - Sustainable 10% Dividend Yield

City of London Investment Group (OTC:CLIUF) is an asset manager that focuses on closed end fund (CEF) investment for institutional clients. Decrease in funds under management has caused share price to drop 50% and the stock currently has dividend yield of 10%.

Investors are overly pessimistic about the company as current dividend yield can be sustained even without any growth and sticky client base is unlikely to withdraw money. Moreover, company has reopened for new investors and is forecasting $1bn (30% increase from current base) of new mandates till Dec. 2015. Market growth and narrowing of CEF discount to NAV are also likely to provide a boost to profitability.

Thus, there is a strong upside for share price...

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