In an update published today (August 4), the Swiss asset manager announced an underlying pre-tax loss of £1.68m for the six months to June — 195 per cent less than the positive £1.76m recorded for H1 last year.
The troubled fund house was primarily hurt by £7.1bn of net outflows as investors pulled their cash from GAM funds, while £6.5bn of negative market movements also chipped away its assets under management.
Assets in its investment management arm dropped by a quarter (26 per cent) since the start of the year, slipping to £30bn as at June 30 this year, which in turn has seen its net fee and commission income tumble from £144m in 2019 to £104m this year.
GAM attempts to bounce back
GAM has made a number of company shake ups recently as it attempted to move on from a troubled past few years.
In February the fund house announced it would look to save £63m in a strategy overhaul as its profits continued to tumble. But by April, the coronavirus crisis had triggered the asset manager to cut its staff numbers by 16 per cent and review its pay structure in an attempt to accelerate the efficiency goals outlined in the overhaul.
It has since issued a profit warning after facing a £348m impairment charge from when it was taken over more than 15 years ago, driven by the impact of Covid-19 on the group’s assets.
Just last month, GAM announced Tim Rainsford, who was sales chief and a board member since 2017, was to “take up a new opportunity” and leave the company.
In today’s update GAM said the accelerated efficiency programme was “progressing well” and was on track to deliver at least £55m of total cost savings in the full year of 2020.
It also flagged its new leadership structure — after Mr Rainsford's role was split in two — would “facilitate enhanced focus on specific client segments”.
GAM is in the process of implementing SimCorp, a fully integrated “front to back solution” which it said would generate efficiencies, and is on track to complete this for next year.
Peter Sanderson, group chief executive, said: “Our operations have remained resilient and productivity has remained high in a Covid-19 remote working environment, and we are making good progress with our strategy.
“The accelerated efficiency programme underpinned by the implementation of the new SimCorp platform is on track and, together with the new leadership in distribution, these are important steps in mobilising GAM for growth for the benefit of our shareholders.”
Troubled past
GAM has hit the headlines in recent years after the suspension of one of its key fund managers led to a sustained period of outflows and saw the fund house’s assets under management dwindle.
In 2018 GAM liquidated a range of nine bond funds run by Tim Haywood after he was suspended amid concerns about due diligence and record keeping on the funds.
By October that year, the company's Aum had dropped by more than 10 per cent and it had seen £4bn of outflows from its fund range.
imogen.tew@ft.com
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