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July 31, 2019

Zürcher Kantonalbank to buy GAM precious metals funds business

Zürcher Kantonalbank (ZKB) has agreed to purchase the precious metals ETFs and money market operations of GAM in a deal worth CHF14m.

Under the agreement, ZKB will buy four Swiss precious metals funds from GAM. These funds oversee CHF1.8bn in assets.

The deal also includes the transfer of GAM’s Luxembourg-domiciled money market funds with around CHF400m in assets.

ZKB will serve as the investment manager for the acquired funds and also manage their marketing following deal closure in the third quarter of this year.

The investment objectives of the funds will be retained.

ZKB head of Swisscanto Invest, Iwan Deplazes, called the transaction a “good strategic fit”.

Deplazes noted: “Following the transaction, we will have a market share of over 60% in the Swiss precious metals ETF business.

“The transaction will already positively impact Zürcher Kantonalbank’s results in its first year.”

The deal will not involve staff transfer. Besides, GAM will remain the fund management company through its private labelling arm.

GAM CEO David Jacob said: “Investors already invested in these funds can continue to expect a highly professional management of these products in the future.”

Jacob will soon depart as GAM’s CEO, to be replaced by Peter Sanderson, formally of BlackRock. Sanderson will be tasked with turning around the asset manager’s fortunes, which have not recovered following revelations of breaches in the risk management and record-keeping processes of its fund manager Tim Haywood who was eventually sacked.

Yesterday, GAM reported significant losses for the first half of 2019. The group’s underlying net loss for the half-year ended 30 June 2019 was CHF1.1m, compared to a profit of CHF71.7m in the first half of 2018.

 

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