GAM, which oversees CHF 68.2bn in client assets and has offices in 12 countries, including the UK, has failed to live up to its potential, RBR Capital Advisors told shareholders.
According to RBR’s website, the firm is “willing to invest in turnaround situations,” a label it believes applies to the Swiss fund house.
“The current GAM management plan is just not working,” said private equity specialist Kasia Robinski.
“We don’t believe that long drawn out, unspecified cost cutting plans can work and GAM with its declining profits and dwindling cash reserves does not have the luxury of time to dabble at this.”
In June, before the EU Referendum rocked markets, GAM issued a profit warning, notifying investors that is half year profits were expected to dwindle by 50%.
Its share price sank 18% the day after the warning was issued.
It was at this point that RBR seized on the opportunity to steadily increase its stake in GAM.
The investor now owns 4.4% of the fund group, giving it significant clout in boardroom negotiations.
“It’s obvious to us that it [GAM] is a business that has lost its way, a business in serious trouble,” said Robinski.
As a first port of call, RBR has called for the dismissal of GAM CEO, Alexander Friedman.
The majoriity shareholder is also keen to reshuffle GAM’s board of directors, adding its own CEO to the panel and installing Robinski as chairwoman, and voting to remove current board members Diego du Monceau and Ezra Field, as well as current chairman of the board of directors Hugh Scott-Barrett.
