As it was seeking to take over troubled Swiss Asset Manager GAM, UK-based Liontrust bled the equivalent of nearly two billion dollars of assets under management.

In the months during the acrimonious takeover battle between Liontrust and an investor group led by Newgame, Liontrust experienced outflows of 1.6 billion British pounds ($1.96 billion) in the three months ending September 30, according to a trading update filed with the London Stock Exchange released today.

At the same time, assets under management fell 6.3 percent to 27.7 billion pounds at the end of the quarter, slipping further to 27.5 billion as of October 12.

The Takeover Battle

A Liontrust takeover of GAM was its only option for survival, according to Liontrust CEO John Ions. In an interview with finews.com, he said Liontrust made an offer that was «more than fair.»

An investor group consisting of Geneva-based Newgame and Swiss asset manager Bruellan and the involvement of French telecoms billionaire Xavier Niel had other ideas. In their view, GAM was undervalued, and they sought to turn the company around. On September 1, the Swiss Takeover Board ruled a partial offer by Newgame and Bruellan for up to 28 million GAM shares is compatible with Swiss takeover rules.

In the end, Liontrust's efforts in its 96 million pound takeover bid fell short as it failed to secure 66.6 percent of support from GAM shareholders, garnering just over 33 percent.

A Blow to Strategic Plans

Liontrust's strategic objective is to expand the range of its funds by asset classes and investment styles with broader geographical distribution. Incorporating GAM into its business fit that strategy, but that wasn't to be.

«The proposed acquisition of GAM would have accelerated our strategic objectives,» Ions said in the statement. Still, «without GAM, they do not change, and our belief in them has only strengthened.»

The lessons learned from the process with GAM will help shape the operating model of Liontrust and «will lead to restructuring and efficiencies in some areas of the business,» he said.

New GAM Board Approved

Last month, GAM shareholders unanimously appointed a new board of directors while narrowly rejecting two agenda items proposed by Rock to introduce conditional capital into GAM's Articles of Incorporation for a capital increase, as finews.com reported. 

With all the twists and turns in the story, there was a final one to come. The proposed candidate to replace CEO Peter Sanderson, Randel Freeman, withdrew due to unforeseen family circumstances. Instead, GAM veteran and chief risk officer Elmar Zumbuehl was nominated as CEO. He also is a member of the group executive committee.