GAM Holding Hit By Slump in Performance Fees
03 August 2016 - 7:10PM
Dow Jones News
Swiss money manager GAM Holding said a slump in performance fees
helped knock profits by almost a half, a fresh sign that choppy
markets are making life difficult for investment managers.
GAM, which issued a profit warning in June, said performance
fees for the first half of the year were just 1.2 million Swiss
francs ($1.24 million), compared with 44.1 million francs a year
ago. That helped push underlying profit before tax down 46% to 55
million francs.
The results were "about as poor as expected," said RBC Capital
Markets analyst Peter Lenardos.
Shares fell by 10% in early trading.
The results have echoes of those from Man Group, the world's
biggest listed hedge fund firm and a bellwether for the industry,
last week. The group said profit from performance fees collapsed to
just $8 million from $172 million, dragging down profits.
GAM, which in June announced the acquisition of Cambridge,
England-based hedge fund Cantab Capital to expand into
computer-driven funds, said its main unit saw clients pull out a
net 5.6 billion francs during the six months. Almost half of that
came out of absolute return funds, which aim to profit in all
market conditions.
Assets under management fell 5% over the past six months to
113.5 billion francs.
"We cannot rely on a quick improvement in market conditions,"
said Chief Executive Alexander Friedman. "The turmoil we have been
seeing since the second half of 2015 is likely to continue
affecting clients' risk appetite, flows and assets."
Write to Laurence Fletcher at laurence.fletcher@wsj.com
(END) Dow Jones Newswires
August 03, 2016 04:55 ET (08:55 GMT)
Copyright (c) 2016 Dow Jones & Company, Inc.
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