View all newsletters
Receive our newsletter - data, insights and analysis delivered to you
  1. News
December 13, 2018

GAM to axe 10% of jobs after it forecasts full-year loss

Swiss asset manager GAM has announced plans to slash around 10% of jobs next year as part of a restructuring programme. The GAM job cuts are expected to reap at least CHF40m in savings by the end of next year.

GAM is predicting a net loss of around CHF925m this year, due to impairment charges at the group and Cantab investment management. Last year, the firm posted a net profit of CHF123.2m.

Just last month, GAM rejected Schroders’ acquisition offer of its Systematic division which manages the Cantab quantitative hedge fund. Profits have suffered after news in July that it is writing-off Cantab Capital, the UK hedge fund manager it bought two years ago.

Senior jobs axed

GAM said it plans to trim the size of its group management board (GMB). Instead of nine members, the GMB will now have seven members.

This will lead to the departure of GAM Investment Solutions group head and chief economist Larry Hatheway and group head of corporate development Tim Dana from GMB by this year-end. The duo will continue to be part of GAM’s senior management team.

GAM also plans a suspension of its 2018 dividend and said that its 2019 earnings will be “materially below” compared to this year.

The latest move follows the suspension of GAM’s investment director Tim Haywood due to revelations of breaches in his risk management and record keeping processes.

The suspension eventually led to the liquidation of the firm’s unconstrained/absolute return bond funds range that was managed by Haywood.

Soon after, GAM CEO Alexander Friedman stepped down from his post.

GAM group CEO David Jacob said: “With today’s announcement we are seeking to give our shareholders and our clients the clearest assessment of our financial situation.

“We are taking decisive action to rebase costs and support profitability, whilst maintaining our focus on client service and control functions. We are determined to do everything it takes to rebuild the trust of our stakeholders.”

Topics in this article: ,
NEWSLETTER Sign up Tick the boxes of the newsletters you would like to receive. A weekly roundup of the latest news and analysis, sent every Wednesday. The industry's most comprehensive news and information delivered every month.
I consent to GlobalData UK Limited collecting my details provided via this form in accordance with the Privacy Policy
SUBSCRIBED

THANK YOU

Thank you for subscribing to Private Banker International