Swiss asset manager GAM is holding its extraordinary general meeting in two weeks under unfavorable conditions. First-half losses and a takeover battle will be the main topics on the agenda.

Swiss asset manager GAM suffered a loss of 71.2 million Swiss francs ($81.2 million) compared to 275.2 million Swiss francs in the first half of last year, according to results released Thursday.

The loss is mainly attributable to a net operating loss after tax of 23.9 million francs and non-core items of 47.3 million francs.

Write-Downs Brand Assets

Non-core items included an impairment charge of 43.2 million francs on old intangible brand assets originally incurred by Julius Baer's acquisition of GAM in 2005.

Assets under management (AuM) totaled 68 billion at the end of  June, of which 21.9 billion were in the Investment Management unit and 46.1 billion in Fund Management Services. At the end of last year, AuM stood at 75 billion.

Plugging the Liontrust Deal. Again.

«Our first half results demonstrate the challenges which GAM faces, which are among the reasons why the Board continues to recommend the Liontrust offer to GAM shareholders,» said CEO David Jacob.

He went on to say «The stable platform and investment that will be provided by the combined group, once the Liontrust offer is completed, gives our shareholders an opportunity to participate in future value creation.» 

Clients Pull Assets

The decline in AuM in Investment Management was due to net outflows of 2.2 billion Swiss francs, offset by positive market movements as well as foreign exchange movements of 0.9 billion Swiss francs.

Fund Management Services recorded net outflows of 6.9 billion Swiss francs, partially offset by positive market and foreign exchange movements of 1.2 billion Swiss francs.

Fierce Bidding War

In the run-up to the extraordinary general meeting on August 18, the bidding dispute over GAM continues.

Yesterday, GAM published a presentation on the planned shareholder meeting, as well as answered a list of questions from the investor alliance around the company NewGAMe to give shareholders time to consider the questions before the general meeting.