GAM Holding AG provides an update on first-half 2018 results

GAM Holding AG / GAM Holding AG provides an update on first-half 2018 results . Processed and transmitted by Nasdaq Corporate Solutions. The issuer is solely responsible for the content of this announcement.

13 July 2018

GAM Holding AG provides an update on first-half 2018 results

GAM Holding AG today provided an update on its first-half 2018 results, in accordance with the obligations under the listing rules of the SIX Swiss Exchange (article 53) in relation to the Group's IFRS results.

GAM expects to report an underlying profit before taxes, which excludes non-recurring and acquisition-related items, of approximately CHF 91 million (including approximately CHF 2 million of performance fees) for the first half of 2018, compared with CHF 75.4 million (including CHF 19.3 million of performance fees) in the first half of 2017.

The Group expects to incur a non-cash impairment charge of approximately CHF 59 million, net of taxes, on the intangible assets (investment management and client contracts) related to the original funds of Cantab Capital Partners acquired in October 2016, as a result of lower assets under management and cash flows compared with those forecast at the time of the Cantab acquisition. Despite this impairment, GAM continues to see broader growth of the GAM Systematic Cantab platform driven by new product launches.

GAM also expects a related reduction in the Cantab deferred consideration liability, which represents the part of the purchase price that was deferred over multiple years, of approximately CHF 30 million in the first half of 2018. Taken together with previously recognised adjustments, the reduction in the deferred consideration liability since the 2016 acquisition is expected to amount to approximately CHF 57 million.

After taking these non-recurring and acquisition-related items into account, the Group expects to report an IFRS net profit for the first half of 2018 of approximately CHF 25 million, compared with CHF 67.7 million in the first half of 2017.

Group CEO Alexander S. Friedman said: "We continue to see GAM Systematic Cantab as a key driver of future growth for our company. While the developments in assets under management since the acquisition have been below expectation, they have been in line with industry trends as investors have turned more averse toward high volatility hedge funds. Cantab's industry-leading, scalable technology platform has been critical to enabling the launch of several new lower-volatility systematic products that are receiving increasing interest from clients and are integral to diversifying GAM's business into capabilities with strong future growth potential."