GAM reorganisation continues as H1 profits halve

Swiss asset manager GAM will press on with previously announced jobs cut by next year, as the group’s half-year profits fall 46% year-on-year. The firm attributed the fall to reduced performance fees, which in tandem with falling commission income fell 23% to 232.8 million Swiss francs (€213.9 million). Performance fees fell precipitously to 1.2 million Swiss francs, from 44.1 million Swiss francs, year-on-year. A restructuring of GAM’s operations was originally announced in 2015. Now, the plan has been extended to include the closure of one of the firm’s two Zurich offices and one of its four London offices. It is unknown whether constituent staff will be reduced also, but the firm said front-office operations would be streamlined. The firm will also be outsourcing its full middle and back office activities to State Street, with State Street providing fund accounting and middle office services for their entire product range from the end of 2016 onwards. Overall, it is hoped the cost cutting drive will deliver savings of around five million Swiss francs this year, and annual savings of 20 million Swiss francs from next year. Group chief executive officer Alexander Friedman said the firm cannot rely on a “quick improvement” in market conditions to right itself. “The turmoil we have seen since the second half of 2015 is likely to continue affecting clients’ risk appetite, flows and assets,” he said. Despite the firm’s troubles, GAM has acquired UK boutiques Taube Hodson Stonex and Cantab Capital since the start of the year. ©2016 funds europe

Sponsored Profiles

SPONSORED FEATURE: Investing for income

May 17, 2017

Portfolio Manager Thomas Kruse examines the findings from Pioneer Investments’ survey on income investing and outlines ways of achieving a target income.

SPONSORED ARTICLE: A radical solution to KYC concerns

May 17, 2017

The 1MDB affair shows that lax know-your-customer and due-diligence procedures are a major risk, says Paolo Brignardello, head of product management and marketing, Fundsquare. New solutions are...

SPONSORED FEATURE: AIFMD - What does Brexit mean?

Apr 18, 2017

An open discussion between funds industry experts and initiated by SGG Luxembourg took place in London to examine  the implications of Brexit for UK fund managers marketing to the EU.

SPONSORED FEATURE: Luxembourg fund reporting – CRS vs FATCA

Apr 18, 2017

Luxembourg funds need clear procedures for CRS compliance, writes Andrew Knight, Partner at M Partners, a member of the Maitland network of law firms.

Executive Interviews

INTERVIEW: Finding managers that can (and do)

Apr 18, 2017

Fabrice Kremer, a fund selector at Banque de Luxembourg Investments, has berated fundamental managers for failing to beat indices, but he remains committed to active funds. He speaks to Nick...

JERSEY INTERVIEW: ‘A steady sort of place’

Mar 21, 2017

The chief executive of Jersey Finance is keen to portray the island as a stable, trustworthy jurisdiction. He talks to George Mitton.

Roundtables

MARKETING & BRANDING ROUNDTABLE: It’s about aspiration

May 17, 2017

With such an intangible product, it can be hard for asset managers to communicate what they do. Having personality and connecting with customer aspirations may be the key, our branding roundtable hears.

ROUNDTABLE: The issue is perception

Mar 21, 2017

Our panel discuss tax transparency, the elegance of private placement and why Jersey could do more to promote itself. Chaired by Tom Cowsill in Saint Helier.