GAM: Asset manager’s losses spiral after Liontrust deal collapse

Swiss asset manager GAM has reported heavy losses in its annual results, after a tumultous year that saw its potential takeover by Liontrust crash and burn.

Investors pulled billions from the embattled asset manager throughout the year, leading to lower revenues from fees for a company that was already in poor shape to begin with.

Last year, British asset manager Liontrust proposed buying GAM, but after months of pushback from investor group Newgame, shareholders in the company rejected the deal by two to one.

This left GAM in a state of crisis, as management had repeatedly said it did not see a way forward for the company without an acquisition.

However, the investor group that had pushed back against the Liontrust shareholders moved to take control of the board, and ultimately ended up seizing it, along with the CEO role, in September.

Today, the asset manager reported a loss of 82.1m Swiss francs (£72m) in 2023, down from 290m (£254.1m) in 2022.

“The loss was driven mainly by lower revenues reflecting lower assets under management,” the group said, as investors pulled out 4.7bn Swiss francs (£4.1bn) throughout the year.

This has led investment management assets to sank to just 19.3bn Swiss francs (£16.9bn), compared to 23.2bn (£20.3bn) at the end of 2022.

In October, GAM finalised a deal with Rock Investments, who owns Newgame, for it to provide 100m (£87.6m) Swiss francs in financial support, as well as Rock now controlling a 30 per cent stake in GAM.

Elmar Zumbuehl, the new CEO of GAM, said after a very challenging 2023, “we have made good strategic progress”.

He noted the 100m Swiss francs would provide “enhanced long-term stability for the business and support for the implementation of our growth strategy”.

“It also demonstrates our anchor shareholder’s unwavering long-term commitment to GAM,” he added.

“In 2024, we will continue to focus on our clients, innovation and maintaining our strong investment performance. I would like to thank our clients for their continued support and recognise the ongoing commitment of our anchor shareholder and my GAM colleagues.”