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GAM hit by outflows and stronger Swiss franc

Arrow down1GAM Holding, an asset management company based in Switzerland, has seen a slight drop in assets under management due to outflows and the strengthening of

the Swiss franc against the dollar and euro.

GAM, which provides investment management to Julius Baer funds distributed by Swiss & Global Asset Management, says in its interim management statement today that at the quarter ending March 31 assets had declined to CHF 69.6 billion (€57.2 billion) compared to CHF 69.8 billion at the end of 2013.

Net new money flows recovered in March, says the group. Flows to the company’s largest fixed income strategies – absolute return/unconstrained and local emerging market debt – were negative over the quarter, recovering in March, and the group says performance in these strategies has “markedly improved”.

GAM says its has seen institutional demand for absolute return/unconstrained bonds and has had mandate wins for its risk premia solution.

Low-margin money market funds and its physical gold ETF continued to experience market-driven net new money outflows across the reporting period. They were successfully counteracted by robust demand for the company’s higher-margin equity products, GAM says.

As it had hoped for, GAM saw combined multi-asset class solutions achieve net new money inflows from Swiss institutions and from its discretionary fund management services for independent financial advisers, outpacing outflows from the historic private client channels.

Assets increased by CHF 1.1 billion over the end of 2013 in the group’s private labeling business, which provides outsourcing solutions to third parties and contributes around 6% of revenues. The units has CHF 45.7 billion of assets under management.

Net inflows were recorded mainly in Luxembourg-domiciled and offshore funds, while funds domiciled in Switzerland experienced net outflows.

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