The Swiss asset manager's clients pulled more than $1 billion in the first quarter, driven mainly by clients wanting out of credit and emerging bonds. GAM said it is on track spending cuts and streamlining measures.  

Zurich-based GAM's assets fell to 35.5 billion Swiss francs ($38.8 billion) at the end of March, from 35.9 billion francs at year-end, it said in a statement on Wednesday. The result was marred by 989 million francs in withdrawals in its investment management unit.

More than half fell in fixed income funds, where clients wanted out of credit and emerging market bond funds. CEO Peter Sanderson said «although we saw outflows in investment management, we are seeing encouraging client activity on the back of strong investment performance.» The ex-Blackrock executive had stanched GAM's bleeding last year, which was loss-making.

Greensill Ties

GAM surfaced last month after Credit Suisse pulled the plug on a $10.1 billion line of funds with Greensill.  Still recovering from its own entanglement with the U.K. supply chain financier, GAM followed suit on a 725 million franc fund it had still maintained with Greensill. 

The asset manager reportedly only moved to sever ties to Sanjeev Gupta, a controversial major client of Greensill, last year. On Wednesday, it said had had reimbursed investors for 70 percent of assets, which are investment-grade oligors. The remainder will be returned as the underlying notes mature over the course of 2021, GAM said.

Spending Cuts

GAM said it is on track to cut its spending by 15 million francs this year. A cloud-based platform provided by Simcorp is the cornerstone of streamlining measures. The asset manager said it had moved all its equity portfolios onto the platform and will have completed the remainder of its investment portfolios by year-end.

In the first quarter, a systematic trading unit based on the 2017 acquisition of Cantab, recently folded more closely into GAM, lost 400 million francs, while equity funds posted 200 million francs in inflows on the back of buoyant stock markets. A private fund-labeling unit, which generates less margin than GAM's flagship fund unit, won 500 million francs.