PRESS RELEASE
Ad hoc announcement pursuant to Art. 53 listing rules:
Financial Highlights
- Group assets under management (AuM) were CHF 100 billion as at
31 December 2021 (compared withCHF 122 billion as at31 December 2020 ) - Investment Management saw net client outflows of
CHF 4.4 billion , with Fund Management Services (formerly private labelling) recording net client outflows ofCHF 20.5 billion primarily due to one large client departure previously announced - Continued strong investment performance from equities and strong recovery in fixed income; 68% and 60% of investment management AuM outperformed their benchmark over three and five years, respectively
- Cost discipline continues to deliver to plan; achieved cost saving target of
CHF 15.5 million - Underlying loss before tax of CHF 9.6 million (compared with underlying loss of CHF 14.9 million in FY 2020)
- IFRS net loss of CHF 23.3 million (compared with a net loss of CHF 388.4 million in FY 2020)
- Financial targets for 2024 revised to reflect current levels of AuM
Strategic progress
- One technology platform now in operation across all equity portfolios and most fixed income portfolios enabling a scalable future
- Distribution strategy successfully diversifying client interest across asset classes, with net positive client flows into equities for five consecutive quarters
- Refocused distribution footprint to align with evolving client demand
- Continuing to attract and retain talent; stable and high calibre bench of investment and client facing professionals
- Aligning to client demand with product innovation and focus on sustainability
- New leadership for Fund Management Services in Luxembourg
- Increased focus on Wealth Management with appointment of new leadership
- All historic regulatory matters now resolved
- Returned 100% of client investment in the supply chain finance fund
Peter
2021 Group results
Net fee and commission income decreased by 2.5% to
Underlying personnel expenses decreased by 5.0% to
Underlying general expenses totalled
The underlying operating margin stood at negative 3.2%, compared with negative 4.7% in FY 2020. The improvement was driven mainly by operating leverage as expenses decreased by 4%, outweighing the reduction in income of 2%. This compares to an IFRS operating margin of negative 9.6%. The difference between the underlying and the IFRS operating margin mainly relates to higher IFRS expenses of
The underlying loss before taxes was
The underlying effective tax rate for 2021 was 21.9% compared with 0.0% in 2020. The increase in the effective tax rate was primarily driven by a tax credit from an increase in deferred tax assets based on higher future
Diluted underlying earnings per share were negative
The IFRS net loss after tax was
Business Update
Investment Management – Assets, flows and investment performance
Assets under management movements (CHF bn)
Capability | Opening AuM | Net flows 2021 | Funds in Liquidation | Market/FX 2021 | Closing AuM |
Fixed income | 17.1 | (2.3) | (0.8) | 0.1 | 14.1 |
Multi asset | 7.5 | (0.4) | - | 0.6 | 7.7 |
Equity | 6.9 | 0.3 | - | 0.8 | 8.0 |
Systematic | 2.9 | (1.7) | - | - | 1.2 |
Alternatives | 0.7 | (0.3) | - | - | 0.4 |
Absolute return | 0.8 | - | (0.3) | - | 0.5 |
Total | 35.9 | (4.4) | (1.1)2 | 1.5 | 31.9 |
AuM totalled
Net flows by capability
In fixed income, net outflows totalled
Multi asset strategies experienced net outflows of
In equity, GAM saw net inflows of
In systematic, net outflows of
In alternatives, GAM saw net outflows of
Absolute return was overall net flat in respect of client flows, while
Investment performance
Over the three-year period to
Fund Management Services
Assets and flows
Assets under management movements (CHF bn)
Fund domicile | Opening AuM | Net flows 2021 | Market/FX 2021 | Closing AuM |
Rest of | 51.2 | 2.6 | (0.2) | 53.6 |
34.9 | (23.1) | 2.6 | 14.4 | |
Total | 86.1 | (20.5) | 2.4 | 68.0 |
Assets under management were
Wealth Management
In 2021, we announced an increased focus on Wealth Management under new leadership.
We currently report the assets within our Investment Management business, but as at
Strategy Update
Growth
- Strong investment performance, good client momentum and increased diversification
- Strong recovery in fixed income investment performance and continued strong performance in equities, with many strategies in the top quartile across time periods
- Net positive inflows into equities in each quarter in 2021
- More diversified pipeline across investment capabilities, reducing concentration risk
- Ongoing positive conversations with longstanding and potential new clients
- Deeper understanding of our clients’ needs and objectives and ability to offer investment capabilities and solutions that meet their investment goals: an example is our recently announced strategic partnership with
Liberty Street Advisors to provide clients with access to late stage, privately-owned high-growth innovation companies - Enhanced digitisation in client engagement
- Distribution footprint refocused to align with evolving client demand
- Strengthened presence in
Asia , a strategic growth market for GAM, with new hires and the opening of ourSingapore office - Reinforced institutional team with new hires in the
USA andSwitzerland , along with a new Global Head of Consultant Relations
- Strengthened presence in
- Strong progress with our sustainability strategy
- New Global Head of Sustainable and
Impact Investment and new hires in our sustainability team - Successful launch of sustainable local emerging bond and sustainable climate bond strategies and development underway on a range of sustainable thematic equity funds
- Improved sustainable investment framework with the introduction of a proprietary ESG dashboard
- Proprietary ESG, climate and impact assessment framework to be rolled out in 2022
- Introduced a sustainability exclusion policy
- Listed as signatory to the
UK Stewardship Code, certified as CarbonNeutral® company for operational emissions, joined the Net Zero Asset Managers initiative, committing to supporting investing aligned with the goal of net zero by 2050 or sooner
- New Global Head of Sustainable and
- Appointed new Global Head of Fund Management Services and CEO of Luxembourg
- Focused on revenue growth using the full suite of GAM capabilities in response to client demand for an enhanced offering
- Increased focus on Wealth Management to drive growth from our existing base of private clients
Transparency
- GAM ranked best Swiss-listed financial services provider in Inrate’s Corporate Governance zRating for the third consecutive year
- Launch of ESG client reports for more than two-thirds of GAM funds
- Continued to strengthen our policies and disclosure
- Published first ever standalone Sustainability Report, enhanced Stewardship Report and first disclosure on our management of climate risk using the TCFD (
Taskforce on Climate-related Financial Disclosure ) framework
- Published first ever standalone Sustainability Report, enhanced Stewardship Report and first disclosure on our management of climate risk using the TCFD (
- Reached settlement with
UK Financial Conduct Authority inDecember 2021 , bringing the investigation into theAbsolute Return Bond Fund matter to a close - Closed the supply chain finance fund, marking the end of GAM’s legacy business relationship with
Greensill - Returned over 100% of value of the GAM Greensill Supply Chain Finance fund to clients
- Returned over 100% of value of the GAM Greensill Supply Chain Finance fund to clients
Excellence
- Delivered cost reduction target
CHF 15.5 million of savings in fixed personnel and general expenses- Since 2018, reduced total expenses from
CHF 373.5 million toCHF 234.5 million , down 37% - Continuing to drive efficiency gains to assist meeting our revised financial targets
- Investment in new operating platform completed
- One technology platform now in operation across all equity portfolios, most fixed income portfolios and delivering excellence across ‘One GAM’. Wealth Management now supported by a new client administration platform, agile technology successfully rolled out across the firm to facilitate a hybrid way of working, enhanced collaboration with a flexible approach to doing business and reduced office space
- Implementation of Workday, our new Finance and HR operating platform, completed with legacy systems decommissioned
- Implementation of operational changes
- Strengthened high performing global equity team
- Realignment of systematic capabilities to focus on GAM Systemic Alternative Risk Premia and GAM Systematic Core Macro
- Closure of some long-short strategies to align with client demand
- Further simplification of firm’s legal structure
- Continued to merge legal entities to create a simplified branch structure
- Continued to merge legal entities to create a simplified branch structure
Liquidity and capital management
Liquidity
Cash and cash equivalents at the end of 2021 amounted to
Adjusted tangible equity at the end of 2021 was
Dividend
Recognising GAM’s underlying loss in 2021, the Board of Directors proposes to shareholders that, in line with our long-term dividend policy, no dividend will be paid for the financial year 2021. The Board of Directors continues to target a minimum dividend pay-out of 50% of underlying net profit to shareholders.
Compensation
The compensation framework for our Group Management Board (GMB) members drives their remuneration through clear goals aligned to our shareholders’ expectations. Although the Board recognises the significant continuing progress against those goals and the Group’s strategic priorities, based on the Group’s financial performance for 2021 there will be no variable compensation for a third successive year proposed for granting to the GMB. This decision was made in full recognition of the GMB’s unwavering commitment, but the financial underperformance continues to make it appropriate that neither annual bonus nor long-term incentive (LTIP) awards are made.
Outlook
We have revisited our financial targets and given current assets under management, we now target an underlying pre-tax profit of at least
GAM is well positioned to help clients navigate the new paradigm that is emerging from the pandemic. We expect the market environment to remain volatile, but client demand for actively managed alternative, sustainable and high-conviction strategies and solutions, to be strong. GAM is focused on growth and delivering excellence for clients.
The presentation for analysts and investors on the results of
Upcoming events:
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For further information please contact:
Global Head of Communications and Investor Relations
T +44 20 7917 2241
Investor Relations Media Relations Media Relations
Jessica Grassi Kathryn Jacques Ute Dehn Christen
T +41 58 426 31 37 T +44 20 7393 8699 T +41 58 426 31 36
Visit us: www.gam.com
Follow us: Twitter and LinkedIn
About GAM
GAM is a leading independent, pure-play asset manager. The company provides active investment solutions and products for institutions, financial intermediaries and private investors through three businesses: Investment Management, Fund Management Services and Wealth Management. GAM employed 605 FTEs in 14 countries with investment centres in
Disclaimer regarding our financial result
To ensure reader-friendliness, we are commenting on underlying Group KPIs and on the most relevant IFRS figures.
Disclaimer regarding forward-looking statements
This press release by
These forward-looking statements are subject to risks, uncertainties, assumptions and other factors that could cause the Company’s actual results of operations, financial condition, liquidity, performance, prospects or opportunities, as well as those of the markets it serves or intends to serve, to differ materially from those expressed in, or suggested by, these forward-looking statements. Important factors that could cause those differences include, but are not limited to: changing business or other market conditions, legislative, fiscal and regulatory developments, general economic conditions, and the Company’s ability to respond to trends in the financial services industry. Additional factors could cause actual results, performance or achievements to differ materially. The Company expressly disclaims any obligation or undertaking to release any update of, or revisions to, any forward-looking statements in this press release and any change in the Company’s expectations or any change in events, conditions or circumstances on which these forward-looking statements are based, except as required by applicable law or regulation.
1 For further information, see note 6 of the consolidated financial statements in the FY 2021 Annual Report.
2 Funds in liquidation include
3 The peer group comparison is based on ‘industry-standard’ Morningstar Direct Sector Classification. The share class references in Morningstar have been set to capture the oldest institutional accumulation share class for each and every fund in a given peer group.
Attachment
- 2022 02 17 Ad hoc FY21_Media Release_EN
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