Swiss asset manager GAM suffered a substantial loss in the first half, but sees a silver lining on the horizon.
GAM in June had predicted a first-half loss in the region of 400 million Swiss francs. The Zurich-based fund manager on Tuesday said the loss amounted to 390.1 million francs ($425.1 million). The main reason for the loss are goodwill dating back to the takeovers first by UBS in 1999 and then by Julius Baer in 2005.
The company had a pretax loss of 2 million francs, which compares with a pretax profit of 2.1 million in the same period of 2019.
Assets Are Recovering
GAM managed to stabilize the funds it is managing. Assets under management amounted to 119.4 billion francs at the end of June 2020. The volume had declined from 132.7 billion at the end of 2019 to 112.1 at the end of the first quarter.
The investment management business had assets of 35.5 billion at the end of the reporting period, while private labeling was overlooking 83.9 billion. The performance of GAM funds has improved, the firm said.
Technology Transfer
The changeover of its technology is ongoing and most equity funds will be moved to the Simcorp system in the third quarter, while most of the fixed-income funds will be migrated in the fourth quarter. The remainder is due for the move in the first half of 2021.
The fund manager is expecting months of volatility and investors that tread carefully. The company is keeping to its plan to save at least 65 million francs by year-end.
