A busy and challenging first quarter saw group asset under management at Gam fall to CHF 94.8bn (£76.9bn) at the end of March, down 5.2% from the CHF 100bn recorded at the start of the year.
It comes after the Swiss asset manager reported a CHF 22bn drop in AUM over the course of 2021, which forced the firm to adjust its financial targets in February.
The firm ended 2021 with a £9.1m fine from the Financial Conduct Authority after the long-running saga with its former star bond manager Tim Haywood finally drew to a close. But any hopes of a less tumultuous 2022 were likely swept away after fixed income strategies, which hold the lion’s share of the firm’s investment management AUM, fell firmly out of favour with investors in light of rising inflation and the war in Ukraine.
Net client outflows of CHF 270m during the first quarter, compounded by net negative market and foreign exchange movements, saw investment management AUM drop to CHF 30bn from CHF 31.9bn as of 31 December 2021. AUM in the investment management business was CHF 35.5bn at the end of the first quarter of 2021, representing a year-on-year drop of 18%.
Gam’s fixed income strategies recorded net outflows of CHF 396m, with the Gam Star Credit Opportunities and Local Emerging Bond funds the biggest bleeders.
Alternative funds saw the biggest net inflows (CHF 67m), followed by multi asset (CHF 44m) and equities (CHF 28m).
The first quarter of the year also saw Gam announce it is to lose the bulk of a CHF 11.5bn fund management services mandate. An unnamed client will move CHF 10.5bn of the mandate in-house from Q2 2023. The fund management services business closed the first quarter with AUM of CHF 64.8bn, down from CHF 68bn at the end of 2021.
Despite the tough environment, group CEO Peter Sanderson (pictured) described Q1 as “encouraging”.
“I am pleased that, despite pressure on the level of assets under management in the current market environment, our investment management business continues to improve with net inflows across a range of strategies and reduced outflows from our larger fixed income strategies.”
Ukraine worries weigh on Quilter results
Separately, Quilter reported a 4% drop in assets under management and administration to £107.2bn at the end of the first quarter, down from £111bn on 31 December 2021.
The company said: “Strong early net flow momentum in the quarter was impacted by market uncertainty following the outbreak of conflict in Ukraine in late February.”
On a year-on-year basis, however, AUMA was up 6% from the £101bn reported in Q1 2021.
Quilter splits its business into two key segments: affluent and high net worth. AUMA in the affluent segment was £79.7bn at the end of Q1, down from £83.1bn during the same quarter last year. The high net worth segment also saw AUMA drop to £27.5bn from £28.7bn a year ago.
Net inflows ticked up slightly in Q1 2022 to £1.05bn, compared with £1.04bn a year earlier.
Paul Feeney, chief executive of Quilter, said: “Net inflows in the first two months of the year were comfortably ahead of the comparable period in 2021 but the invasion of Ukraine in late February dampened investor sentiment for most of March.
“Our resilient overall performance throughout this period has underlined both the strength of our advice-based model and demonstrated the potential of our transformed business.
“We have built a business for the long-term and remain confident in our potential and ability to drive growth and deliver efficiency. Markets may remain challenging, but we are focussed on execution and are well positioned to take advantage of the opportunities ahead.”
