Placing and Admission to AIM

City of London Investment Group PLC
12 April 2006


Embargoed until 07.00, 12 April 2006


                      CITY OF LONDON INVESTMENT GROUP PLC
               ('City of London', 'the Group', or 'the Company')


            PLACING OF ORDINARY SHARES, ADMISSION TO TRADING ON AIM     
                            AND FIRST DAY OF DEALINGS
                                        

City of London Investment Group PLC (AIM: CLIG.L), a leading emerging market
asset management group, announces that Admission of its ordinary shares to
trading on AIM will take place today. Teather & Greenwood Limited is acting as
Nominated Adviser and Broker to the Company.


The company has placed 24.51% of its issued share capital and at the issue price
of 180p per share the Company will have a market capitalisation of £48.2 million
on admission. The audited accounts for the nine months ended 28 February 2006
show turnover of £9.9 million, operating profit of £3.4 million and profit after
tax of £1.9 million, with Funds under management of approximately $2.7 billion.


Funds under management have risen from $340 million as at 31 May 2003 to $2.7
billion at 28 February 2006, rising to approximately US$2.9 billion at today's
date, and revenues have risen from £2.8 million for the year ended 31 May 2003
to £9.9 million for the 9 months ended 28 February 2006.


City of London is an asset management group whose principal activity is
providing emerging market asset management products and services predominantly
to institutional investors via its principal operating company City of London
Investment Management Company Limited. The Group is based in the UK and also has
offices in the US and Singapore. Clients include some of the US's leading blue
chip institutions and endowment funds.


With total funds under management of approximately $2.9 billion (£1.6 billion),
the Group manages several Open Ended Funds as well as a number of segregated
accounts. The Group's fund mandates are mainly in emerging markets, although the
Group has more recently diversified its asset management product portfolio by
the launch of a natural resources fund and has also seeded three new funds: a
global fund, a frontier fund and an emerging markets yield fund. The Group seeks
to provide capital growth for clients through active country allocation and
stock selection.


Placing Statistics:

Placing Price                                                             180p
Number of Ordinary Shares being sold pursuant to the Placing         6,563,850
Number of Ordinary Shares in issue on Admission                     26,777,800
Market Capitalisation at Admission at the Placing Price            £48,200,040
Percentage of Share Capital being placed                                24.51%


Barry Olliff, Chief Executive of City of London, said: 'We have achieved our
objective of realising value for some of our long term shareholders. We
deliberately conducted a very low profile marketing effort, placing with a
carefully selected list of high quality, long term investing institutions. We
have a conservative approach to business, which has been developed over many
years. Our responsibility now is to demonstrate that this approach will work for
the benefit of; one our clients; two our employees; and three our shareholders
over the coming years in the public market place.'


For further information, please visit www.citlon.com or contact:

Doug Allison (CFO)/                     Jeff Keating/Rob Naylor/    
Barry Olliff (CEO)                      Fred Walsh                     
City of London Investment Group PLC     Teather & Greenwood                                                  
Tel: [phone]                      Tel: [phone]            


John West/Simon Hudson
Tavistock Communications
Tel: [phone]





NOTES TO EDITORS

Key Strengths

The Directors believe that the City of London Group has the following key
strengths:


   •Specialist investment expertise in emerging market closed end funds. The
    Group tracks closed end funds via a proprietary trading and research
    database.
   •Strong investment performance of the funds it manages. The Group has
    established a proven risk averse, systematic investment process and business
    model, and has achieved strong investment performance over 15 years.
   •Risk averse culture. The Group's business model is based on prudent
    management of operating risks at all levels of the firm.
   •International presence. The Group's three offices in London, the United
    States and Singapore place it close to the markets the Group addresses as
    well as close to existing and potential client bases.
   •Prudent investment process and culture. City of London's investment
    process is rigorous. Changes in asset or geographic allocations of funds are
    made gradually. The investment decisions are only made following discussions
    by investment professionals who convene across the three offices on a daily
    basis.
   •Client service. Clients are able to discuss the investment process and
    reasons for investment decisions directly with the Group's fund managers.
    The Directors believe that this transparent service-orientated culture
    fosters strong client relationships. The Group also provides detailed
    monthly and quarterly reports on all its funds. These include an economic
    overview, commentary on major portfolio acquisitions and disposals, a
    breakdown of the fund by geography and holdings, feature articles and
    analysis of the closed-end fund industry as a whole.
   •A loyal client base. The Group's focus on customer service and investment
    performance has resulted in a low fund redemption rate.
   •Low staff turnover. Only two senior investment managers have left the
    City of London Group in the past 10 years. The Directors believe this low
    turnover has contributed to consistent investment performance and lower
    costs. The Directors are committed to training and encouraging staff to
    develop their skills.
   • Operational gearing. The Company's operating profit margin is 34.8 per
    cent. for the nine months to 28 February 2006. The Directors believe that
    the Group could increase significantly the amount of funds under management
    without commensurately increased costs.



Reasons for Admission

The Directors believe that Admission will:

   •provide liquidity for investors through the ability to buy and sell
    Ordinary Shares;
   •assist the Company in raising additional capital should this be required;
    and
   •enhance the Group's ability to recruit and incentivise staff.


Dividend Policy

The Directors intend to adopt a progressive dividend policy that will reflect
the long-term earnings and cash flow potential of the Group, whilst maintaining
an appropriate level of dividend cover. The Company paid a final dividend of
£1,225,753 in respect of the year ending 31 May 2006 on 31 March 2006.


Current Trading and Prospects

The audited accounts for the nine months ended 28 February 2006 show turnover of
£9.9 million, operating profit of £3.4 million and profit after tax of £1.9
million. Since 28 February 2006 the Group has continued to trade in line with
Directors' expectations and net inflows to the Group's funds have continued at a
satisfactory level. The Directors believe that the Group will continue to
benefit from the low operational gearing that has characterised its business
model to date.



Summary Financial Information

                                                                               9 months
                                Year ended    Year ended     Year ended           ended
                                    31 May        31 May         31 May     28 February
£'000                                 2003          2004           2005            2006

Turnover                             2,783         3,850          7,745           9,891
Operating (loss)/profit              (232)           390          2,060           3,446
Profit after tax                     (214)           320          1,333           1,933
Dividends                                -             -          (350)         (1,057)
                                -------------------------------------------------------
FuM ($m)                               340           909          1,558           2,700



Funds under Management

The table below sets out the Group's funds under management as at 28 February
2006

Account                                   Inception date        FuM           %
                                                              (US$m)   of total

Emerging World Fund                        1 August 1998        148
                                                             ------
Total European accounts                                         148          5%
                                                             ------      ------
Emerging Markets Country Fund             1 December 1994       617
Investable Emerging Markets Country Fund      1 June 1996       659
Emerging (Free) Markets Fund              1 November 2003       363
Natural Resources Fund                       1 April 2004        34
Other US Funds                            1 February 2005*       10
US segregated accounts                    1 February 2004*      550
                                                             ------
Total US accounts                                             2,233         83%
                                                             ------      ------
GFM Emerging Markets Country Fund              1 May 1995        37
Tradex Fund                                    1 May 1999         7
Canadian segregated account                  1 April 2004       275
                                                             ------
Total Canadian accounts                                         319         12%
                                                             ------
Total FuM (as at 28 February 2006)                            2,700        100%
                                                             ======      ======

Note: * denotes inception of earliest account. Source: City of London



The table below sets out the sources of funds under management of the Group at
each year end for the three years ended 31 May 2005 and the nine month period
ended 28 February 2006.

FuM US$m                            As at      As at      As at         As at
                                   31 May     31 May     31 May   28 February
                                     2003       2004       2005          2006

Europe                                 35         42         81           148
USA                                   248        607      1,127         2,233
Canada                                 20        140        213           319
Other                                  37        120        137             -
                                   ------------------------------------------
Group Total                           340        909      1,558         2,700
                                   ==========================================





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