Under new ownership and leadership, GAM is undertaking a turnaround. The newly appointed bosses urgently need to stop asset outflows, which continued in the third quarter.

In its interim report for the third quarter, the crisis-ridden Swiss fund firm GAM announced the first steps in its turnaround on Thursday.

Following the withdrawal of the bid by British asset manager Liontrust at the end of last August, an alliance of investors led by French billionaire Xavier Niel has taken over the reins and replaced the board of directors and parts of the management team.

Financing Secured

The NewGAMe consortium will control nearly 30 percent of GAM's shares after the completion of the partial takeover offer, according to a statement on Thursday. Meanwhile, the fund firm has signed an agreement for a 100 million Swiss francs ($111.2 million) financing line with Allianz, intended to secure the company's long-term financial stability. GAM recently faced a liquidity shortage.

Managed Assets Dwindle

Assets under management fell from 68 billion francs at the end of June to 64.9 billion francs at the end of September. As it turns out, clients withdrew even more funds in investment management. This is even though around 82 percent of assets managed in GAM funds have outperformed their benchmarks over the past three years.

The third-party fund business Fund Management Services, which is being sold to competitor Carne, suffered withdrawals of around 700 million francs.

Under New Management

The new management team must buck this trend if GAM is to survive. The Executive Board now consists of CEO Elmar Zumbuehl, Rossen Djounov as global head of sales, Martin Jufer as chief operating officer (COO) and head of Switzerland, David Kemp as head of legal and compliance and head of the UK office, Richard McNamara as chief financial officer (CFO) and, most recently, Albert Saporta as global head of investments & products.

The Executive Board will focus on implementing GAM's core strategy and seeking new opportunities, including distribution partnerships, wealth management, and specialized investment strategies such as alternative investments.