Swiss asset manager GAM steps up cost savings under new CEOReuters | Updated: 20-02-2020 12:53 IST | Created: 20-02-2020 12:53 IST
GAM Holding's new Chief Executive Peter Sanderson said on Thursday the Swiss asset manager aims to step up cost-cutting measures and touch an operating margin of 30% in two years. A strategy update unveiled by Sanderson targeted cost savings of 40 million Swiss francs ($40.7 million), compared with the 2019 exit run rate of 40 million francs, but did not cite specific measures on how to achieve this.
The company declined to comment on how many jobs might get slashed. GAM had said last month it expected to break even for 2019 as performance fees improved, although it saw a sharp outflow of assets in the aftermath of a row with its former star fund manager.
The Swiss company called a truce with manager Tim Haywood last year after months of wrangling over his sacking, drawing a line under a saga that hammered its stocks. The embattled asset manager, which employed around 850 people in 14 countries as of September, said it aims for underlying pre-tax profit of 100 million francs under its new strategy.
Last year, GAM posted underlying profit before taxes, excluding non-recurring and acquisition-related items, of 10.5 million Swiss francs, down from 126.7 million francs in 2018. This was driven mostly by a drop in assets under management (AuM) to 48.4 billion francs at the end of 2019, from 56.1 billion francs in the prior year.
The drop in AuM was "primarily driven by net outflows of 11.1 billion francs across capabilities" and the sale of precious metal funds, only partially offset by net positive market and foreign exchange movements of 5.3 billion francs, the company said on Thursday. GAM proposed omitting a dividend and said its group management board would get no bonuses for 2019.
($1 = 0.9839 Swiss francs)
(This story has not been edited by Devdiscourse staff and is auto-generated from a syndicated feed.)
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