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Money Management

GAM’s assets drop 2% in quarter, 35.7% for year on outflows

Assets under management for GAM Holding's investment management unit fell 2% to 55.1 billion Swiss francs ($55.3 billion) in the three months ended March. 31, driven by net outflows that were partially offset by positive market and foreign-exchange movements.

For the 12 months ended March 31, AUM fell 35.7%.

A financial update Wednesday said group assets under management, which include the firm's investment management and private labeling businesses, improved 3.9% for the quarter and fell 15.3% for the year, to 137.4 billion francs.

Net outflows for investment management for the quarter totaled 4 billion francs, compared with net outflows of 4.6 billion francs in the previous quarter and 2.5 billion francs in net inflows in the year-earlier quarter.

In July, the firm received redemption requests from investors for its ARBF strategies and had decided to liquidate the relevant strategies, after it suspended Tim Haywood, investment director and business unit head for the unconstrained/absolute-return bond strategy. Mr. Haywood was terminated for gross misconduct. The absolute-return bond fund strategies had 11 billion francs in net outflows in the second half of last year.

GAM said in its update Wednesday that it has agreed to sell the "material remaining" of its absolute-return bond fund assets "at a valuation at which they were purchased." ARBF liquidation is expected to be completed by before July 15, GAM said.

Absolute-return strategies excluding ARBF totaled 1.6 billion francs, with 300 million francs in net outflows for the quarter.

Fixed-income assets were 29.4 billion francs, with 800 million in net outflows for the quarter; equity AUM totaled 7.5 billion francs, following 2.3 billion francs in net outflows for the quarter.

Multiasset strategies totaled 8 billion francs, with 200 million francs in net outflows; alternatives assets totaled 4.1 billion francs, with 300 million francs in net outflows for the quarter. Systematic strategies totaled 4.5 billion francs as of March. 31, with 100 million francs in net inflows.

"While the investment performance over a three- and five-year period has improved, first-quarter net flows continued to be impacted by ARBF-related matters," said David Jacob, group CEO, in a news release accompanying the update. "Having now sold all but the final group of material assets and with an agreement in place which leads to the sale of them as well, we look forward to putting this difficult period behind us. Our priority during the liquidation process has been to maximize liquidity and value for clients, while ensuring fair treatment for all."