Wednesday, April 20, 2016
GAM Holding AG: Interim management statement for the three-month period to 31 March 2016
- Group assets under management of CHF 114.7 billion, down 4% from 31 December 2015
- Investment management:
- Net outflows of CHF 3.1 billion as persistent market turbulence led to risk aversion among investors
- Assets under management of CHF 67.3 billion, down 7% from 31 December 2015, driven by net outflows and the negative impact from a weakening of the US dollar and the British pound
- Private labelling:
- Net inflows of CHF 1.1 billion
- Assets under management of CHF 47.4 billion, up 1% from 31 December 2015, driven by net inflows, but partly offset by the negative impact from market and foreign exchange movements
Group CEO Alexander S. Friedman said: “The start to 2016 in financial markets has been highly turbulent, leading to risk aversion among investors and affecting industry-wide flows. This created a challenging backdrop for a number of our investment strategies. We remain highly focused on delivering investment performance.
Despite disappointing flows in the first quarter, the execution of our strategy is well on track. We are in the midst of completing the extensive transition of our business model, adding innovative products suitable to address our clients’ investment needs and working to enhance GAM’s external recognition, while managing our costs in a highly disciplined fashion.”
Investment management recorded net outflows of CHF 3.1 billion in the quarter as the turbulent market environment that started in the second half of 2015 continued. Assets under management fell to CHF 67.3 billion from CHF 72.3 billion as at 31 December 2015. Apart from net outflows, foreign exchange movements reflecting the weakening of the US dollar and the British pound against the Swiss franc and adverse market conditions negatively impacted asset levels by CHF 1.4 billion and CHF 0.5 billion, respectively.
In absolute return, GAM Star Keynes Quantitative Strategy, GAM Star European Alpha and GAM Star Financials Alpha were among the biggest contributors of net inflows in the quarter. Redemptions were concentrated in the unconstrained/absolute return bond strategy.
In fixed income, the JB Local Emerging bond fund was among those with the biggest net inflows in the quarter, reversing the trend after net outflows in 2015, while specialist strategies such as GAM Star MBS Total Return and GAM Star Cat Bond continued to attract net inflows. The JB ABS fund was among those with the greatest outflows, largely reflecting redemptions by one client.
In equity, the GAM Star Continental European Equity fund continued to attract solid net inflows in the quarter. The GAM Star China Equity, JB Japan and GAM Star Technology funds, on the other hand, posted net outflows amid a turbulent market environment.
Within alternatives, the JB Physical Gold fund led the products with the highest inflows, while traditional funds of hedge funds experienced redemptions, in line with industry trends.
In multi asset products, resilient net inflows in the risk rated model portfolios for UK independent financial advisers were not sufficient to offset the outflows from some institutional mandates.
Assets under management in private labelling, which provides fund solutions for third parties, rose to CHF 47.4 billion from CHF 46.7 billion as at 31 December 2015. Net inflows of CHF 1.1 billion were partly offset by a CHF 0.4 billion negative impact from market and foreign exchange movements.
The implementation of the new operating model, as communicated in 2015, is progressing as planned. The largest back office migration step within the project, involving the transfer of the entire GAM Star range to State Street Fund Services (Ireland) Ltd, was successfully completed in March.
GAM’s multi asset team under the leadership of Larry Hatheway launched two new target return strategies in March to complement existing offerings in the areas of relative return and risk rated solutions. As previously communicated, GAM plans a number of new fund launches in the next few months, including products in trade finance, real estate debt and the event driven space.
In the first quarter of 2016 the Group bought back a total of 527,800 of its own shares at a cost of CHF 7.6 million for cancellation under the current share buy-back programme.
Turbulent market conditions are likely to continue to weigh on client sentiment and flows in the near term. In addition, performance fees in the first half of 2016 are expected to be lower than the levels reported in the previous year.
With the execution of its strategic initiatives well under way and its commitment to cost discipline, GAM remains confident about delivering on its targets over the business cycle.
|27 April 2016||Annual General Meeting|
|29 April 2016||Ex-dividend date|
|2 May 2016||Dividend record date|
|3 May 2016||Dividend payment date|
|3 August 2016||Half-year results 2016|
|20 October 2016||Interim management statement Q3 2016|
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GAM is one of the world’s leading independent, pure-play asset managers. The company provides active investment solutions and products for institutions, financial intermediaries and private investors under two brands: GAM and Julius Baer Funds. The core investment business is complemented by private labelling services, which include management company and other support services to third-party asset managers. GAM employs over 1,000 people in 11 countries with investment centres in London, Zurich, Hong Kong, New York, Milan and Lugano. The investment managers are supported by an extensive global distribution network.
Headquartered in Zurich, GAM is listed on the SIX Swiss Exchange and is a component of the Swiss Market Index Mid (SMIM) with the symbol ‘GAM’. The Group has assets under management of CHF 114.7 billion (USD 119.8 billion) as at 31 March 2016.
This press release by GAM Holding AG (‘the Company’) includes forward-looking statements that reflect the Company’s intentions, beliefs or current expectations and projections about the Company’s future results of operations, financial condition, liquidity, performance, prospects, strategies, opportunities and the industry in which it operates. Forward-looking statements involve all matters that are not historical facts. The Company has tried to identify those forward-looking statements by using words such as ‘may’, ‘will’, ‘would’, ‘should’, ‘expect’, ‘intend’, ‘estimate’, ‘anticipate’, ‘project’, ‘believe’, ‘seek’, ‘plan’, ‘predict’, ‘continue’ and similar expressions. Such statements are made on the basis of assumptions and expectations which, although the Company believes them to be reasonable at this time, may prove to be erroneous.
These forward-looking statements are subject to risks, uncertainties, assumptions and other factors that could cause the Company’s actual results of operations, financial condition, liquidity, performance, prospects or opportunities, as well as those of the markets it serves or intends to serve, to differ materially from those expressed in, or suggested by, these forward-looking statements. Important factors that could cause those differences include, but are not limited to: changing business or other market conditions, legislative, fiscal and regulatory developments, general economic conditions, and the Company’s ability to respond to trends in the financial services industry. Additional factors could cause actual results, performance or achievements to differ materially. The Company expressly disclaims any obligation or undertaking to release any update of, or revisions to, any forward-looking statements in this press release and any change in the Company’s expectations or any change in events, conditions or circumstances on which these forward-looking statements are based, except as required by applicable law or regulation.