GAM Holding, the Zurich-listed firm catering to clients such as high net worth individuals, has reported a fall in pre-tax profit of 10 per cent to SFr113.1 million ($124.3 million), as cost reductions did not fully offset a year-on-year decline in performance fees.

GAM Holding, the Zurich-listed firm catering to clients such as high net worth individuals, has reported a  fall in pre-tax profit of 10 per cent to SFr113.1 million ($124.3 million) from a year ago, as cost reductions did not fully offset a year-on-year decline in performance fees

However, profit for the six months to 30 June was up 6 per cent from the end of 2013, as cost cuts exceeded revenue fluctuations.

The firm said in its half-yearly statement that underlying net profit for the first half of 2014 was SFr93.1 million, down 5 per cent from the second half of 2013 and 17 per cent from the first half.

Group operating income totalled SFr307.4 million, down 2 per cent from the second half of 2013.

IFRS net profit was SFr90.8 million, of which SFr89.8 million was attributable to GAM Holding AG shareholders.

The group’s cost/income ratio improved from 65.8 per cent to 63.2 per cent compared to the second half of 2013.

In its investment management arm, assets under management rose 5 per cent from year-end 2013 to SFr73.4 billion, thanks to net new money inflows and positive market performance.

Net new money inflows were SFr1.3 billion, driven by improving flow momentum across the product range.

Redemptions from the physical gold ETF continued, but started to stabilise over the first half of 2014, in line with the development of the gold price.

GAM’s “Private Labelling” arm - the area providing outsourcing solutions to third parties and contributing around 6 per cent of its revenues - ended the quarter with assets under management of SFr46.2 billion, up from SFr44.6 billion at year-end 2013, driven by positive market performance of SFr1.8 billion.

Tangible equity stood at SFr501.3 million, compared to SFr551.4 million at year-end 2013. This decrease was also driven by the dividend payment for 2013 and the share buy-backs in the first half of 2014, partly offset by the net profit generated during this period.

“Our efforts to create a leading independent asset management group are paying off. Growth in our core investment management business, with broadly diversified net new money inflows, robust profitability and a solid balance sheet combine to create a healthy and strongly positioned group,” chief executive David Solo.