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GAM, Liontrust Confirm Merger Talks

Tom Burroughes Group Editor London 19 April 2023

GAM, Liontrust Confirm Merger Talks

The Switzerland-listed firm said it is in talks with Liontrust, among others. Liontrust also stated that talks were going ahead. Liontrust also issued a trading statement on its financial year results today.

UK-listed Liontrust Asset Management yesterday confirmed that it has made a bid for GAM Holding, the investment firm which in January warned that it expected to book a loss for 2022. 

There has been media speculation (Sky News, 18 April, others) that Liontrust Asset Management is considering buying GAM. 

Shares in GAM, which are listed on the SIX exchange, surged 15.7 per cent to SFr0.69 per share. Its shares have collapsed over the past five years, down more than 95 per cent.

In its statement yesterday, Liontrust said: "Liontrust confirms it has made an approach to the board of GAM. There can be no certainty that this will lead to a formal offer in respect of the proposed acquisition, nor as to the timing or terms of any such offer and there can be no assurance that, even if agreement is reached, any such proposed acquisition would be completed." 

Zurich-listed GAM confirmed that it "is in discussions with UK asset manager Liontrust Asset Management Plc among others."

“As we communicated in our announcement on 25th January 2023, the board is working tirelessly on options to ensure that the firm is strategically positioned in the best interests of all stakeholders. A further announcement will be made should any of these options reach a successful conclusion," it said in an emailed statement to the media.

GAM, due to hold its AGM on 25 May, has been battling to recover its fortunes since Tim Haywood, who managed the ARBF business, was suspended in 2018 amid claims of misconduct (he was subsequently dismissed). Clients pulled money out of the firm. GAM has also seen its fortunes affected by the selloff in global markets during 2022.

In January, GAM said it expected to report an underlying pre-tax loss of about SFr42.8 million ($46.5 million) in 2022, widening from a loss of SFr9.6 million a year earlier.

Trading statement
In a trading update today, Liontrust said its adjusted pre-tax profit will be “ahead of market expectations” for the financial year and not less than £86 million ($106.94 million). It logged net outflows of £4.8 billion for the 12 months to the end of March, 2023. Total assets under management and advice (AuMA) stood at £31.4 billion at 31 March, falling 3.6 per cent over the period.

A year ago, Liontrust bought UK-based  Majedie Asset Management, finally paying £41 million.

The investment team who joined from Majedie generated performance fees of £12 million, out of a total of at least £17 million for Liontrust as a whole, according to John Ions, Lionstrust’s CEO, in a statement. 

"It has been a challenging year for Liontrust in terms of net outflows and mixed performance for our funds. But this has to be set against a backdrop of the industry in aggregate suffering UK retail net outflows in 10 out of the 12 months last year, according to the Investment Association ("IA"). Despite these headwinds, Liontrust has delivered impressive financial performance,” Ions said.

Liontrust issues full-year figures on 21 June.

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