YMG Capital Management Inc. is reporting a net loss for the six months ended June 30.

For the six month period, YMG reported a net loss of $3.7 million compared with a net loss of $1.7 million a year ago. YMG says the decline is the result of unrealized losses which the corporation recorded primarily in the second quarter on its investments of $5 million of which $4.9 million relates to the corporation’s venture investment which must be recorded at fair value on the financial statements

The company says earnings before interest, amortization and income taxes but excluding investment income were $603,000, an increase of $1.1 million over prior year loss of $559,000.

Approximately $927,000 of this increase relates to non-recurring expenses that occurred during the first six months of 2000. Earnings before interest, amortization and income taxes but excluding investment income is $29,000 for the quarter ended June 30, 2000 compared with $376,000 for the same period in 2000.

Assets under management increased to $14.2 billion compared to $14.1 billion at December 31, 2000 and $13.4 billion at June 30, 2000.

Fee revenue of $8.7 million for the six months increased 10.5% over the same period of 2000. Approximately 18.4% of this increase is a result of mandates from new clients and expanded mandates from existing clients that were received after June 30, 2000. The remaining 81.6% of the increase is a result of the acquisition of AlphaQuest Capital Management Ltd. in July 2000.

Fee revenue for the quarter was $4.3 million an increase of 4.5% over fee revenue of $4.1 million for the same quarter in 2000. Fee revenue from investment management excluding the YMG mutual funds increased $980,000 to $7.5 million compared with $6.6 million earned during the six months ended June 30, 2000.

Along with reduced investment management expenses for this operating segment, YMG is reporting earnings before interest, amortization and taxes (EBITDA) of $1.9 million an increase of $1.1 million compared with EBITDA of $816,000 for the same period of 2000.

Selling, general and administrative expenses declined by 4% to $8 million for the six months, compared to $8.4 million for the same period in 2000. However, as previously disclosed approximately $927,000 of non-recurring expenses occurred during the period in 2000.

Adjusting for these non-recurring expenses year to date 2001 expenses are $591,000 higher than the same period in 2000. Higher sub-advisory fees due to increased mandates and a new external manager along with higher legal expenses in connection with the reverse takeover of Longboat Capital Corp. and the sale of the mutual fund line of business are significant contributors to this increase.