Reports
GAM's Assets Under Management Slumps, Reiterates Dividend Cancellation

The Zurich-listed investment house reiterated a tough outlook today as it confirmed how assets under management have been hit hard following the suspension of a senior manager last year.
GAM Holding,
which has been hit by heavy client outflows amid the suspension
of a senior manager last year, today confirmed that for 2018,
assets under management have slumped to SFr56.1 billion ($56.0
billion) from SFr84.4 billion a year ago.
The full-year report issued today confirmed that GAM was slashing
costs and will not be paying a dividend for 2018. GAM also
reconfirmed its financial outlook
as stated in December last year, expecting this year’s
underlying profit result to be “materially below” that of 2018
because of the slide in AuM.
Investors have pulled billions from GAM’s Absolute Return Bond
fund range after the unit’s manager, Tim Haywood, was suspended
last year. The firm launched a probe in the summer into Haywood's
conduct after concerns about his activity were flagged by an
internal whistleblower. At the time of Haywood’s suspension in
late July, GAM said that it acted because “some of his risk
management procedures and his record keeping in certain
instances” fell short of requirements. One casualty of the affair
was Alex Friedman, its chief executive, who resigned.
There were also net outflows of SFr10.5 billion from non-ARBF
strategies run by GAM; softer markets and adverse forex markets
hit AuM to the tune of SFr6.8 billion, it said in a
statement.
GAM logged an underlying profit before taxes of SFr126.7 million
in 2018, down from SFr172.5 million in 2017. On an IFRS
accounting standard basis, the firm logged a net loss of SFR929.1
million in 2018, reflecting a goodwill impairment charge,
impairment charges related to Cantab investment management and
client contracts (IMCCs), and restructuring charges.