GAM shares have by slumped by 9% this morning after the Swiss-based asset manager issued a profit warning.
The fund house said that profits would be hit by a CHF59 million (£44.7 million) writedown relating to Cantab Partners, the systematic investment manager that it acquired in October 2016. GAM said Cantab has delivered lower assets under management and revenues than expected, blaming muted demand for higher volatility investments.
After the impairment charge, GAM said it expects to report a CHF25 million (£18.9 million) profit in the first half of 2018, down from CHF67.7 million (£51.3 million) in the same period last year.
GAM 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.’