Liontrust Asset Management is in discussions to acquire Gam Investments, the Swiss asset manager with a discretionary fund management arm in the UK.
In a statement to the stock exchange today (April 18), the board of Liontrust confirmed it has made an approach to the board of the Swiss asset manager.
The story was first reported by Sky News.
In the statement, Liontrust said its intention is to combine Gam’s investment management business with the same business of its own.
“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,” the board added.
In January this year Gam delayed its results presentation by two months after issuing a profit warning in 2022, with the Financial Times reporting that the asset manager was attempting to buy time in order to find a buyer.
Gam appointed UBS bankers at the end of last year to work on securing a sale, according to the FT.
The company saw a post-tax loss of Sfr310mn (£273mn) last year, higher than the loss of Sfr23.3mn (£20.5mn) in 2021.
Negative market movements and foreign exchange swings accounted for 80 per cent of the fall in assets, the group said, as well as SFr1.1bn (£940mn) in net outflows in the investment management division.
The company has seen its share price crash 96 per cent in the last five years after one of its star fund managers was caught up in the Greensill scandal, where a supply chain business advised by former prime minister David Cameron collapsed.
Tim Haywood, who ran Gam’s Absolute Return Bond funds, was suspended in July 2018, eventually being fired. The company’s chief executive officer Alexander Friedman stepped down and the Financial Conduct Authority fined Gam £9.1mn in 2021.
Liontrust’s share price is also down this year, dropping nearly 22 per cent in the last 12 months, including a fall of 2 per cent in trading today.
The merger would create a discretionary fund manager with assets under management of £100bn, with Gam’s most recent trading update in October last year showing group assets under management of CHF74.6bn (£66.9bn) and Liontrust reported assets under management and advice of £33.8bn in January this year.
sally.hickey@ft.com