Reports
GAM H1 Profit Down By A Third Year-On-Year
The Swiss asset management firm said market uncertainty is likely to continue to affect flows.
Zurich-headquartered GAM reported an IFRS net profit of SFr53.3 million ($55 million) for the first half of 2016, down 34 per cent from a year earlier, following a slump in performance fees.
Underlying pre-tax profit was 46 per cent lower year-on-year at SFr55 million, as performance fees plunged to SFr1.2 million from SFr44.1 million in the first half of 2015.
Market volatility pushed investors to withdraw funds during the period and GAM's investment management business suffered net outflows of SFr5.6 billion. This, coupled with the negative impact of a weaker British pound and US dollar, drove assets under management down by 9 per cent from the end of 2015 to SFr65.5 billion at the end of June.
Assets under management for GAM as a whole fell 5 per cent from the end of last year to SFr113.5 billion. The company noted that politics will remain a key source of risk for markets, with a second presidential election in Austria and Italy's referendum on constitutional reform in October, the US elections in early November and the UK's negotiations to leave the European Union “all having the potential to unsettle investors”.
“Despite disappointing earnings in the first half of this year, we are investing in the future and managing the business for the long run. The product launches and acquisitions we announced so far this year are a testament to our commitment to position GAM for future growth,” said group chief executive Alexander Friedman in the results statement.
“However, we cannot rely on a quick improvement in market conditions. The turmoil we have been seeing since the second half of 2015 is likely to continue affecting clients' risk appetite, flows and assets. Our utmost attention over the coming months will be directed to our clients, investment performance, tight cost control and the integration of new capabilities.”
In June, the Switzerland-listed firm acquired Cantab Capital Partners, a UK multi-strategy systematic manager that oversees $4 billion in assets for institutional clients worldwide.
