Swiss-based asset manager GAM’s underlying profits before tax fell by 39% last year compared to 2015, due to plummeting performance fees.
Earnings from performance fees stood at 3 million Swiss francs (€2.8 million) in 2016 – a huge drop from 82.8 million Swiss francs the year before.
The firm also saw net outflows of 10.7 billion Swiss francs due to “heightened risk aversion among investors amid political and economic uncertainty”.
GAM’s diluted underlying earnings per share dropped from 0.98 Swiss francs to 0.60 Swiss francs, driven by the decline in underlying net profit.
The board of directors proposed a share buyback after a share buyback programme last year to an extent mitigated the decline in earnings per share.
“Our 2016 earnings were disappointing on two fronts: we recorded net outflows for the year and realised very low performance fees,” said Alexander S. Friedman, group CEO of GAM.
Johannes A. de Gier is to retire from GAM’s board. The board proposed to re-elect Hugh Scott-Barrett and make him chairman.
GAM has also terminated its agreement to use Julius Baer trademarks to market investment funds.
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