Swiss money manager GAM Holding has posted underlying pre-tax profit of CHF55m for the first half of 2016, a slump of 46% compared with the year ago period.
The IFRS net profit of CHF 53.3m, all attributable to the shareholders of the company, was 34% lower versus the first half of 2015.
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Net fee and commission income fell 23% to CHF232.8m mainly as a result of significantly lower performance fees, the company said in its earnings statement.
Net management fees and commissions declined 10% to CHF231.6m, while performance fees fell to CHF1.2m, from CHF44.1m for the same period of 2015.
Net other income, which includes net interest income, the impact of foreign exchange movements, gains and losses on seed capital investments and hedging as well as fund-related fees and service charges, increased by CHF0.9m to CHF2.7m.
The company has assets under management (AuM) of CHF48bn at the end of June 2016, an increase of 3% from 31 December 2015, driven by net inflows and a net positive impact from market and foreign exchange movements.
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Assets under management in investment management as at 30 June 2016 fell to CHF65.5bn from CHF72.3bn as at 31 December 2015. The unit posted net outflows of CHF5.6bn during the first half of 2016.
In absolute return, net outflows totalled CHF2.6bn, driven primarily by redemptions from the unconstrained/absolute return bond strategy following a period of underperformance in 2014, despite strong performance since the beginning of 2016.
In fixed income, net outflows amounted to CHF0.2bn, as redemptions from developed market strategies such as the European JB ABS Fund were largely offset by robust demand elsewhere.
Total net outflows from alternative capabilities amounted to CHF0.2bn. Multi asset class solutions posted net outflows of CHF1bn for the period.
Assets under management in private labelling, which provides fund solutions for third parties, rose to CHF48bn as at 30 June 2016 from CHF46.7bn at the end of 2015.
GAM Holding CEO Alexander Friedman said: “We are confident that our company will effectively navigate this challenging market environment. We are committed to our financial targets of increasing diluted underlying earnings per share in excess of 10% on an annualised basis and achieving an operating margin of 35–40% over the five to eight-year business cycle. Our policy of progressive, predictable and sustainable dividends also remains unchanged.”
