Assets Hold Steady At GAM Holding; Currency Impact Offsets Investment Gains

Tom Burroughes

22 October 2013

, the Swiss-listed investment group, said total assets under management held steady at the end of September compared to 30 June at SFr116.6 billion (around $129 billion), as the 5 per cent fall in the dollar against the firm’s Swiss franc reporting currency offset a large rise in third-quarter market performance.

Total net new money inflows were “very modest”, reflecting varying developments across different product segments, the firm said in a statement today.

Outflows mainly took place in emerging market debt and lower-margin products - such as the physical gold ETFs and certain Swiss institutional assets - while many higher-margin areas continued to attract strong net inflows. This had a positive impact on the overall asset mix, improving annualised return on assets, GAM Holding said.

Net new money results include a “sizeable allocation” from a public pension fund in the US to GAM's alternative investments solutions arm, it said.

Inflows into GAM's single manager products, particularly in the alternative spectrum, continued to be “robust”. After an initial recovery in the first half, client demand for the Julius Baer-branded equity funds picked up notably in the third quarter, leading to an increase in net new money inflows, it said.

The “tapering” of quantitative easing” – or money printing – by the US Federal Reserve has encouraged investors to pull money from products such as gold fund, emerging market portfolios and some traditional fixed income areas, GAM Holding said.

“GAM's unconstrained/absolute return fixed income strategies, on the other hand, saw continued net inflows. Redemptions from wholesale intermediaries in continental Europe (where these strategies are distributed under the Julius Baer brand) were more than offset by sustained and strong inflows from global institutional clients, it said.

In the firm’s “private labelling” business, which is the area providing outsourcing solutions to third parties and contributes around 6 per cent of GAM Holding’s revenues – it ended the quarter with assets under management of SFr44.5 billion. Asset levels were flat from 30 June as positive market performance was offset by currency movements and net new money outflows.

The firm added that with the integration of a number of teams at GAM and Swiss & Global Asset Management, its functional organisation has now been largely implemented.