A group of investors, including French telecoms billionaire Xavier Niel, has bought a 7.5 per cent stake in Swiss asset manager GAM.
The group consists of: NewGAMe, a company controlled by Rock Investment; a subsidiary of Niel’s personal holding company NJJ Holding; and Bruellan, a wealth management group. It said it holds about 12 million shares in GAM.
The move marks the latest twist in GAM’s efforts to secure its future after twice delaying its annual earnings to pursue takeover talks.
The investor group said in a statement that it had invested in GAM because it saw “an opportunity to restore [its] reputation as a best-in-class asset management firm”.
GAM’s “shares are undervalued and offer significant upside to shareholders if the company can complete a successful turnaround”, Thursday’s statement said.
The Swiss asset manager is seeking a buyer, with its share price having plunged more than 95 per cent since 2018. It has held talks with Switzerland’s Zürcher Kantonalbank and UK boutique fund manager Liontrust.
Mr Niel, one of the richest men in France, is best known for launching low-cost telecoms operator Free Mobile and for his investments in technology and real estate. He is Eir’s biggest shareholder.
The investors’ move comes two days after the Swiss fund manager delayed its annual earnings for a second time to strike a takeover deal or firm up strategic options to secure its future as a stand-alone business.
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The company confirmed it was in “advanced discussions” regarding the strategic options, noting the possible combination with Liontrust.
New York-based Z Capital Group has also shown interest in buying GAM as part of plans to expand its asset management business.
GAM said its talks were expected to reach a “successful conclusion” before or on May 4th, when it will publish its delayed annual report.
The company comprises an investment management arm and a fund administration division that services third parties. It said on Monday that assets under management had dropped from SFr100 billion to SFr75 billion (€76 billion) last year, of which SFr8.6 billion were net customer outflows.
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The discussions follow a turbulent period for GAM, which is still suffering from a 2018 scandal over its holdings of illiquid debt. The group suspended former star fund manager Tim Haywood in 2018 with little explanation, leading investors in the Absolute Return Bond funds, which Haywood managed, to sell out.
It later transpired that Haywood had bought bonds from companies related to Lex Greensill’s now-collapsed supply chain finance business Greensill Capital, which counted former UK prime minister David Cameron as an adviser. Haywood’s funds were ultimately liquidated.
Chief executive Alexander Friedman later stepped down, Haywood was fired, and GAM was fined £9.1 millon in 2021 by the UK’s Financial Conduct Authority. – The Financial Times
