Liontrust is planning to take over GAM Holding, a business that has been through a difficult period. GAM reported its earnings, costs and assets data today.

GAM Holding, the Switzerland-based firm in the throes of a potential takeover, today reported a net after-tax loss of SFr71.2 million ($80 million) for the six months to end-June, narrowing from a loss of SFr275.2 million a year earlier.

The H1 2023 loss was mainly caused by the underlying net loss after tax of SFr23.9 million and non-core items of SFr47.3 million. Non-core items include the impairment of a legacy brand intangible of SFr43.2 million which was originally created by the acquisition of GAM by Julius Baer in 2005.

On an underlying basis, GAM said its pre-tax loss was SFr22.5 million, deepening from SFr15.4 million. This was mainly caused by lower net fee and commission income, partially offset by lower personnel and lower general expenses. 

Total assets under management stood at SFr21.9 billion on 30 June, down from SFr23.2 billion at the start of this year, and affected by SFr2.2 billion of net outflows in the H1 period.

The firm said net management fees and commissions in H1 were SFr68.0 million, falling from SFr90.9 million due to lower average assets under management.

Underlying net performance fees, which totalled SFr3.3 million, increased from SFr2.6 million in the first half of 2022. Underlying personnel costs fell 21 per cent to SFr49.0 million in the first half of 2023. Fixed personnel costs fell 14 per cent as headcount contracted. There were 519 full-time employees at 30 June 2023.

As announced in May this year, Liontrust Asset Management agreed to pay for the deal by issuing 9.4 million new ordinary shares. It expects that GAM shareholders will own about 12.6 per cent of the enlarged firm once the deal is wrapped up. In July, Silchester International, owning more than 17 per cent of GAM’s shares, said it supports Liontrust’s takeover, bringing the deal closer to fruition.

The move has not been straightforward. Rock Investment SAS (part of the investor group comprising Newgame SA and Bruellan SA) asked earlier this year for GAM to consider firing its board and make other changes ahead of the proposed takeover.

GAM has been battling to recover since Tim Haywood, who managed the ARBF business, was suspended in 2018 amid claims of misconduct (he was subsequently dismissed). Clients pulled money out of the firm. GAM was also hit by the selloff in global markets during 2022.