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GAM is looking to return to normal after a bond fund scandal knocked billions off its market capitalization. CEO and future Chairman David Jacob tells finews.com how.

David Jacob, what was the toughest task you faced in your nine months as CEO of GAM?

There are a variety of candidates. I was painfully aware we had put our clients in a tough spot, and we had to get them out. Also, the fact that we are a publicly listed company meant that several different stakeholder groups constantly had their eyes on us, including the press.

What are you proud of?

Proud is maybe the wrong word here. You can’t say you’re proud of the fact that you had to take one year to pay your clients money back. But given that we had no choice in how to handle it from the get-go, our main focus was on how to treat all of our clients fairly and we believe we have achieved that.

«Nips and tucks, but product line in right shape»

We immediately stopped charging management fees on the impacted funds, were transparent in our projections of payback intervals and achieved almost all of those milestones in a timely manner. These actions allowed us to preserve value for our clients with an average pay-back of 100 percent.

 You’ve sold a precious-metals and money-market business. Anything else earmarked for sale?

There’s nips and tucks, but I think the product line-up is roughly in the right shape. There aren’t any big material changes we’re currently thinking about.

How many fund managers or employees are leaving with the sale to Zuercher Kantonalbank?

As a result of the sale of the exchange-traded funds, a handful of roles will go by the end of this year.

GAM’s specific recent problems aside, do mid- or small-sized asset managers like you have a future?

There have been plenty of doomsayers for medium-sized asset managers since the mid-1990s; yet, over 20 years later, there’s still plenty of them around. And we believe with our truly distinctive investments we have a unique offering to help our clients achieve their financial objectives.

GAM is more vulnerable after the absolute return bond fund scandal.

We’re in a challenging position from a profitability point of view. I am confident that with putting ARBF behind us, we have every chance to succeed going forward.

So you're likely to stay independent?

As you have seen in the last couple of months, we're certainly focused on doing all the right things to run the business and return to growth.

«Our duty to consider all possible alternatives»

On the other hand, it is the board's duty to consider and evaluate all possible alternatives, keeping in mind the best solution for all stakeholders.

Are you prepping GAM for a sale – perhaps a trade deal, or a private equity disposal?

None of the actions we're taking now are to make this a more saleable business. They are designed to further stabilise the business to be successful again in the future. We will continue to reduce complexity, making our platform more efficient. This will release further cost savings in 2020 and 2021.

You were fighting redemptions as well as inflows coming to a standstill in the first half. What are you seeing now?

We recorded our first positive net fund flows in 12 months in June, and an even stronger month in July.

«No indication of legal threats against GAM»

It looks like clients have started allocating funds into our products again after we announced in April that the ARBF liquidation will be completed soon and that clients will get their money back. It feels like normalization.