Underlying net profit at Zurich-headquartered GAM Holding recorded a 16 per cent fall over last year, according to the company's full-year results statement.

Switzerland-listed asset manager GAM Holding has reported underlying net profits of CHF177.2 million ($184.3 million) for 2014, down 16 per cent year-on-year.

GAM attributed the fall to the return of a normalised tax rate of 18 per cent, almost double the 9.8 per cent rate in 2013, when the group benefited from tax deductions from share-based payments. 

A drop in the group's performance fees helped weigh operating income down by 7 per cent to CHF623.5 million over the year but this was partly alleviated by cost reductions. In sync with operating income, operating expenses also declined 7 per cent to CHF406.8 million while the group's cost/income ratio remained steady at 65.2 per cent.

As the US dollar strengthened against the Swiss franc, assets managed by the investment management arm climbed 9 per cent to CHF76.1 billion, making up the bulk of the group's CHF123.2 billion asset total at the end of the year. This included a healthy contribution of CHF2.4 billion from net new money inflows, compared to 2013's CHF2.6 billion in net outflows. Meanwhile, private labelling assets grew 6 per cent to CHF47.1 billion.

Over 2014, basic earnings per share were CHF1.07, a 15 per cent dip from the previous year, which GAM linked to fewer outstanding shares through its ongoing share buy-backs.

For the mid-term, the group says it hopes to achieve an annualised growth in basic earnings per share of over 10 per cent and a cost/income ratio of 60 to 65 per cent over a business cycle, with a focus on net new money growth. Also on GAM's growth agenda is the expansion of its investment and distribution footprint, namely in the US and Asia.

The group also announced it would stop using the Swiss & Global Asset Management name and focus on its two predominant product brands, GAM and Julius Baer funds. 

“There is little doubt that in 2015 we will have to come to terms with elevated levels of market volatility. A striking reminder of this was provided earlier this year, when the Swiss National Bank abandoned the minimum Swiss franc exchange rate against the euro,” said the group's chief executive, Alexander Friedman, in the results statement.

“While the abrupt appreciation of the franc in January did not cause us any immediate losses and had no material impact on our investment strategies, it underscores the need to manage our cost structure optimally.

“However, we believe that for truly active investors like ourselves, increased volatility offers the opportunity to produce attractive alpha through conviction investing.”