GAM Backs Liontrust Offer Again as Losses, Outflows Mount

GAM Holding AG Chairman David Jacob reiterated the board’s support for a takeover offer by Liontrust Asset Management, as the troubled Swiss firm reported mounting losses and outflows.

(Bloomberg) — GAM Holding AG Chairman David Jacob reiterated the board’s support for a takeover offer by Liontrust Asset Management, as the troubled Swiss firm reported mounting losses and outflows.

Clients pulled a net 2.2 billion Swiss francs ($2.5 billion) at the investment management unit in the first half of 2023, the Zurich-based company said in a statement on Thursday. Total assets under management shrank to 68 billion Swiss francs from 75 billion Swiss francs at the end of December.

Net loss under IFRS in the six months through June was 71.2 million Swiss francs, adding to losses in the prior five consecutive years.  

Shareholders in GAM are set to vote on Aug. 18 on the takeover offer by London-based Liontrust, which is seeking to build a $66 billion global asset manager and end years of turmoil at the Swiss firm. Yet the deal has attracted opposition from a rival investor group led by French billionaire Xavier Niel amid mounting losses and outflows of client funds. 

“Our first half results demonstrate the challenges which GAM faces, which are among the reasons why the board continues to recommend the Liontrust offer to GAM shareholders,” Jacob said in the statement. “Our investment teams continue to excel, but the need for corporate stability is essential to give our clients confidence to allocate to our strategies.” 

The firm also posted net outflows of 6.9 billion Swiss francs at its fund management services, partially offset by net positive market and foreign exchange movements of 1.2 billion Swiss francs. GAM posted an underlying pretax loss of 22.5 million Swiss francs, compared to 15.4 million Swiss francs a year earlier.

GAM’s third-largest investor GEM has rejected Liontrust’s offer, Bloomberg News has reported. But GAM’s largest investor Silchester last month expressed support and said it would tender its shares representing about 17.3% of GAM’s share capital.

Liontrust’s offer is set to end on Aug. 4. Shareholders who have already tendered or intend to tender their shares to Liontrust will still be able to cast their vote at the meeting.

(Updates with losses in preceding years in third paragraph.)

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