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: Alternative thinking

Mar 16, 2017

Portfolio Manager Davide Cataldo discusses the results of the Pioneer Investments’ survey on liquid alternatives and how investors can be encouraged to increase their allocation.

SPONSORED FEATURE: Interest rate risk hedging: Swapping to other options

Mar 16, 2017

Heightened margin requirements for cleared and uncleared OTC derivatives pose a challenge for legitimate hedging activities and are driving financial institutions to explore alternative hedging...

SPONSORED FEATURE: Why blockchain could be the fund industry’s next Ford Model T

Mar 16, 2017

Blockchain aims to radically change the way investors can access funds, says Olivier Portenseigne, Managing Director and Chief Commercial Officer of Fundsquare.

SPONSORED FEATURE: Open architecture: In need of protection

Mar 16, 2017

Greater efficiency must be embraced to ensure regulatory changes do not destroy choice for fund buyers, says Bernard Tancré of Clearstream.

Executive Interviews

CEO INTERVIEW: Munro gains three-year track record

Mar 16, 2017

Aviva Investors’ annual results this month were the third set since Euan Munro took over as CEO. Nick Fitzpatrick speaks to him about the ‘Aims’ fund at the heart of the firm’s outcome strategy.

DISTRIBUTION INTERVIEW: Tales of the unexpected

Mar 16, 2017

Laurence Terryn, a fund selector at Candriam, tells David Stevenson how the twists and turns of the past year’s macro environment flavoured her approach to fund selection.

Roundtables

ASSET SERVICING ROUNDTABLE: Under pressure

Mar 07, 2017

Funds Europe speaks to leading Luxembourg industry figures about the growing regulatory demands on asset servicers and how to remain profitable in spite of major investments in technology.

SEC LENDING ROUNDTABLE: Both a borrower and a lender be

Jan 11, 2017

Industry heavyweights, including agent lenders, discuss issues affecting the securities lending sector such as regulation and the types of collateral being used.