GAM makes ESG push to bolster growth plans

GAM makes ESG push to bolster growth plans

GAM is looking to capitalise on the popularity of environmental, social and governance investing in a bid to support its growth plans.

In an update published today (October 21), the Swiss asset manager said it was focused on enhancing its ESG standards and capabilities across its investment strategies after seeing “strong momentum” in these initiatives.

As part of the push, GAM will launch products within its sustainable range and will shortly hire a global head of sustainable and impact investment to lead its proposition.

It comes as the troubled fund house reported its group assets under management had gone up slightly in the three months to September, from £100.7bn to £101.6bn, despite seeing £2bn of net outflows from its investment management arm.

The outflows were offset by £340m of net inflows into its private labelling arm and £2.5bn of positive market movements across the group.

Performance figures showed many strategies had recovered well from the March crashes, with 69 per cent of its GAM’s assets under management outperforming their respective benchmarks over five years.

Peter Sanderson, group chief executive, said: “The investment performance of our strategies continues to deliver for clients and we are seeing high levels of positive client interaction with a strong focus on growth opportunities. 

“Our strategy remains on track, and we have in place strong leadership across the firm to deliver on the opportunity for GAM to grow.”

GAM reboots

The fund house is in the midst of a shake up, having announced earlier this year a strategy overhaul to make GAM “fit for the future”.

Aspects of its growth plans include increasing its distribution. Sales chief Tim Rainsford left the company in July, his role divided in two and taken up by Jeremy Roberts, previously of BlackRock and Jill Barber, formerly Jupiter’s institutional distribution chief.

In today’s results, GAM reported its growth strategy was progressing well, with high levels of client interaction and a strong pipeline of growth opportunities.

The efficiency part of the overhaul, announced in February but accelerated amid the coronavirus crisis, was on track to deliver at least £55m of cost reductions this year, GAM said.

It is in the process of implementing SimCorp, a fully integrated “front to back solution” which it said would generate efficiencies and is on track for completion next year.

GAM added today that further simplification of the business, with opportunities for additional gains over the next two years, was in place.

In the first half of 2020, GAM saw its profits tumble almost 200 per cent.

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.