Total assets under management at Swiss investment house GAM fell by CHF 16.7bn in the first six months of 2022, its interim results revealed, down from CHF 68bn to CHF 56.1bn.
This depressed result comes just two weeks after it warned profits had suffered under volatile market conditions.
Indeed, the company attributed almost 80% of its AUM reduction to the negative market movements and poor foreign exchange, which drove CHF 3.7bn of the CHF 4.8bn downturn.
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GAM confirmed that the reduction in AUM had led to it paying a non-cash impairment charge of CHF 263.6m related to the intangible brand value, with a remaining value CHF 9.4m.
Net outflows from the investment management portion of the business accounted for CHF 1.1bn, while the fund management services side saw net outflows of CHF 2.5bn, although analysts explained the latter was the "final tranche of a large client moving to another provider which was announced in January 2021".
The firm had previously reported that it expected underlying losses before tax of approximately CHF 275m but the reality surpassed this, with a net loss of CHF 275.2m. In H1 2021, the net loss was just CHF 2.7m.
In response to client engagement, GAM has altered its investment capability reporting, reducing its current six capabilities to four. Systematic and absolute return have been incorporated under the alternatives banner, adding CHF 1.5bn to its total AUM, while some fixed income and equity strategies have been shifted to multi-asset.
GAM has also seen a reduction in headcount, with full time equivalents falling by 58 to 594, reducing expenses by 20% to CHF 62m.
Peter Sanderson (pictured), GAM CEO, said: "GAM's business performance was resilient in the face of the extraordinary economic and geopolitical conditions during the first half of 2022. Despite clients being cautious in the face of market volatility, we are encouraged to see them allocating to a number of our diverse, high conviction active strategies.
"We continue to take action to reduce our costs given the decrease in our revenues. We are confident that our approach to active management is well placed to assist our clients in the current market environment".
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While outflows persisted, 73% of its investment management assets outperformed their benchmark over three years, compared to 68% as of December 2021, according to the firm.
GAM has been in the headlines recently for other reasons, particularly regarding the FCA's ruling on its dealings with Greensill and how one of its managers funded the investment.
Former portfolio manager Tim Haywood was accused of investing client money into complex products arranged by Greensill and that he worked behind the scenes on negotiations with its founder after they offered him a 12.5% stake in the finance firm in 2016.
Following a lengthy probe into his dealings with the company, the FCA fined GAM $12m in April for failing to manage the conflict of interests with Greensill and concluded that Haywood had breached the firm's gifts policy by accepting an invitation to fly to Sardinia on its private jet.
