Beleaguered Swiss money manager GAM has posted IFRS net loss of CHF3.5m ($3.56m) for the year ended 31 December 2019, versus a loss of CHF916.8m in the prior year.
The group’s underlying pre-tax profit slumped to CHF10.5m from CHF126.7m over the period.
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Last month, the firm had issued a profit warning, saying that its 2019 underlying results will be materially lower than the previous year.
At the end of December 2019, assets under management (AuM) in investment management reached CHF48.4bn.
This was a fall of 14% from CHF56.1bn a year ago. The decline was the result of CHF11.1bn in net outflows.
AuM in the group’s private labelling unit increased 11% to CHF84.3bn from
CHF76.1bn. The growth was said to be due to net inflows of CHF1.1bn.
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By GlobalDataThe firm, which has been reeling after the Tim Haywood scandal and going downhill ever since also announced a strategy overhaul.
Its new strategy focuses on three pillars – efficiency, transparency, and growth.
GAM has decided to do away with bonuses for its group management board and dividend for 2019.
Besides, CEO Peter Sanderson has requested to forego a fixed cash award he was expected to receive this year.
The firm aims more than CHF80m in total savings through the new strategy.
GAM group CEO said: “The strategy we are outlining today will build long-term shareholder value by complementing this strong investment performance with a more efficient ‘One GAM’ approach, taking full advantage of technology to deliver for our clients.
“We will become more transparent and have set clear targets against which we will be measured. There are clear avenues to growth by building on our core strengths in client service and differentiated products.”
GAM’s problems began following an internal probe that revealed breaches in the risk management and record-keeping processes of star fund manager Tim Haywood.
Haywood was eventually sacked, while the absolute return bond fund (ABRF) range managed by him was liquidated.
