In an email to staff, Jacob warned redundancies are to be expected as the beleaguered asset manager consolidates parts of the business to “deliver scalable products to our clients worldwide” after a series of setbacks.
Under the changes, the company’s fixed income businesses in New York, London and Zurich will be integrated into four main areas: emerging market bonds, global credit, asset-backed securities and mortgage-backed securities and strategic bonds.
Meanwhile, it is consolidating its European equities expertise into a single team, while maintaining its existing equities capability in technology, emerging markets, UK equity income, global value, Swiss, Asian, Japanese and non-directional equity.
Jacob said consolidation will mean “a number of current investment roles will become redundant”.
He added: “People who may be affected by this decision have been informed and the dialogue with them is continuing. I am fully aware that this is difficult for the organisation, and particularly so for colleagues who are directly impacted by these changes, but we have to ensure that we have an efficient business with a clear and compelling investment proposition for our clients.”
Jacob stepped into the CEO role just two weeks ago after Alexander Freidman quit amid mounting pressure over his handling of the whistleblower crisis, which saw absolute return bond fund manager Tim Haywood suspended for conduct issues related to his due diligence and record keeping.
Haywood’s absolute return bond fund (ARBF) range was subsequently liquidated, accounting for almost 40% of the group’s total net outflows in Q3 of CHF3.2bn (£2.51bn). Gam’s AUM has shrunk 20% since Haywood’s suspension.
Friedman also had to shoulder responsibility for Gam’s systematic quant business Cantab, which it purchased in October 2016, that has failed to deliver expected profits for the business. In July, the fund house warned profits for H1 2018 were set to be CHF25m, compared with CHF67.7m for the same period the previous year, due to lower assets under management and cashflows at Cantab.
Other fund management groups have been reported to be circling Gam’s quant business as a result.
Jacob said: “I have spoken to clients who, while worried by the negative press, are willing to give us time because they value our products and the good service they receive from Gam.”
He added: “Looking ahead, the group management board and the board will continue to discuss additional measures to balance growth and profitability.”