GAM turned savings and the strengthening of its distribution network into an improved result 2017 – revenues and assets under management have risen. And CEO Alex Friedman sees room for further improvement.
GAM, the asset manager based in Zurich and London, seems to have turned the tide: profit may have declined 8 percent to 123.2 million Swiss francs in 2017, but the result in 2016 was boosted by a one-time tax credit, the company said in a statement on Thursday.
It therefore makes more sense to judge the results of last year by the development of pretax profit, which was 44 percent higher than in 2016 and totaled 172.5 million francs, according to GAM. Net management fees and commissions rose 7 percent to 503.6 million francs, while performance fees were up by more than ten times to 44.1 million francs.
The board proposes to leave the dividend unchanged at 0.65 franc per share.
Money Inflows
After years of losing money, the asset manager last year attracted new money: in investment management, the company had net inflows of 8.6 billion francs. Assets under management rose 16.2 billion francs to 84.4 billion. In private labelling, net inflows measured up to 15.7 billion and assets under management increased 21.8 billion to 74.3 billion by the end of the year.
«We are pleased with the financial results achieved in 2017, but recognize there is still a lot to do to deliver on the full potential of GAM,» said Alexander S. Friedman, CEO of GAM, in the statement.
Volatility and Challenges Ahead
In its outlook for 2018, the company said that markets had become more «volatile and challenging». Still, GAM reiterated its target of increasing diluted underlying earnings per share in excess of 10 percent on an annualized basis and achieving an operating margin of 35 to 40 percent over a five to eight year business cycle.
