The Swiss fund house cleared another hurdle for its acquisition by Liontrust by selling its fund management services unit.
Swiss investment house GAM reached a definitive agreement to sell its loss-making fund management services for third-party funds (FMS) in Luxembourg and Switzerland to Carne Group, according to an emailed statement Thursday.
GAM's board believes the transactions are in the best interests of all GAM's stakeholders and an important part of implementing the board's strategic review.
Sale Nets 15 Million
According to the statement, the preliminary purchase price reflects the reduced assets under management (AuM) and loss-making nature of the FMS businesses, of 2.25 million Swiss francs ($2.51 million) for the Luxembourg business and 500,000 francs for the Swiss business.
In addition, 12.1 million francs of regulatory capital will be released and retained by GAM, resulting in an overall positive financial contribution to GAM of approximately 15 million francs.
Declining Managed Assets
After deducting customer losses, assets under management amounted to 36.4 billion Swiss francs as of May 31. Ongoing revenue amounts to approximately 10.25 million Swiss francs per year, taking into account reported customer losses.
The transactions are expected to close in the fourth quarter.
Acquisition Pre-Conditions
The announcement of the sale is an essential step towards fulfilling a condition of Liontrust Asset Management's exchange offer for all publicly held shares of GAM.
The GAM Board of Directors unanimously recommends Liontrust's offer to shareholders, as also reported by finews.com.
