Takeover-Targeted GAM Says Impairment Hits Q1 Result

Editorial Staff

22 June 2023

, said an impairment to its brand affected its financial results in the three months to end of March this year.

The firm said it logged an underlying pre-tax loss in Q1 2023, at SFr11.2 million ($12.24 million) compared with an underlying pre-tax loss of SFr10.6 million a year earlier. On an IFRS basis, the net after-tax loss in Q1 was SFr63.2 million from SFr7.8 million.

The rise in the IFRS net loss after tax was caused by a SFr48.6 million non-cash impairment charge in respect of the “brand intangible.” The impairment reflected the drop in the company's share price from 31 December to the end of March, according to the statement yesterday.

As previously reported on 4 May, GAM’s total assets under management were SFr71.7 billion as at 31 March 2023, down from SFr75.0 billion at 31 December 2022.

In response to the recent request by a shareholder – Rock Investment SAS – GAM is planning to hold an extraordinary general meeting on 25 August 2023. Rock has asked GAM to consider firing its board and making other changes. Rock Investment SAS (part of the investor group comprising Newgame SA and Bruellan SA) holds 5.11 per cent of GAM shares.

GAM 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 hit by the selloff in global markets during 2022. In January 2023, 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.

The takeover proposal comes at a time when the asset management sector, pressured by continued compliance costs, volatile markets and changing investment models, is looking at ways of building economies of scale and shedding costs.