GAM Holding plans M&A after rise in assets
GAM Holding has said it is on the acquisition path after Chf8bn of net inflows fuelled a 4% rise in assets during its first full year of independence.
The Zurich-based asset manager ran Chf117.8bn at the end of last year, and grew net profits by 35% over the year to Chf202.2m.
Johannes de Gier, chief executive, said: “Our first full year of independence was marked by solid results. This underscores the growth potential offered by our business model.
“The search for suitable acquisition targets remains on our strategic agenda, but we will not consider anything less than a compelling transaction. Any acquisition has to be strategically convincing and financially accretive for our shareholders.”
He said investors were “tentatively recovering their interest in equities and hedge funds, however, sentiment remains fragile due to persisting macroeconomic uncertainty and it is therefore too early to say whether this encouraging trend will be sustained for the rest of 2011.”
Asset growth of 5% at the alternative management unit GAM broadly reflected GAM Holding’s own.
GAM received net inflows of Chf5.9bn, more than reversing the Chf4.2bn net redemptions in 2009, to run Chf53.6bn at the end of last year.
The unit was largely responsible for a steep rise in performance fee income at GAM Holding, up from Chf17.5m in 2009 to Chf89.5m last year.
GAM’s decision to launch a parallel onshore range of its offshore hedge funds paid off as they, as well as fixed income, emerging markets, Asian and US absolute return mandates GAM runs for Swiss & Global Asset Management, were singled out for their popularity among investors.
The group said launching the onshore GAM Star funds “highlights GAM’s ability to capitalise on the ongoing shift in private client demand away from the historically dominant offshore structures towards investments that are regulated, liquid and offer a more favourable tax treatment.
“This will enable it to continue to benefit from the trend towards onshore investing in 2011 and thereafter.”
The group also revealed the client base for GAM’s funds of hedge funds is set to become mainly institutional, and not chiefly the traditional private clientele.
Swiss & Global took in Chf9.7bn of net new money to boost assets by 10% to Chf80.4bn. Inflows came largely into GAM-managed fixed income funds S&G distributes, and into S&G’s own physical precious metals fund range.
GAM Holding is proposing a dividend of Chf0.50 per share paid from contributed capital reserves to exempt it from 35% Swiss withholding tax and income tax for Swiss tax payers.
It also plans to repurchase and cancel up to 20% of its shares after renewing its buy-back programme for three years.