Only the brave

23 October 2018 By Neil Unmack Follow @unmack1

Funds are flowing out of the Swiss group that suspended a money manager over compliance issues. Its stock has nearly halved in value since the scandal broke but the case for a takeover is far from compelling. The risk of haemorrhaging more assets will deter potential acquirers.

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Swiss money manager GAM said on Oct. 23 it had 146.1 billion Swiss francs ($146.5 billion) of assets under management at the end of September, down from 163.8 billion Swiss francs at the end of June.

The outflows follow the group’s decision to suspend a key money manager and freeze the absolute return bond fund (ARBF) that he managed.

Assets in the group’s investment management division, which include the ARBF fund, fell to 66.8 billion Swiss francs by the end of September, down from 84.4 billion Swiss francs at the end of the June.

GAM shares fell around 15 percent to 6.2 Swiss francs by 0730 GMT on Oct. 23.

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