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.
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