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GAM loses CHF 21.5bn mandate

Hit to private labelling business comes after it suffered CHF 3.4bn of redemptions in Q4


Kristen McGachey

Gam has warned of a further hit to revenues following a longstanding client’s decision to move an CHF 21.5bn (€19.95bn) mandate elsewhere.

In an update on Tuesday, the Swiss manager said an unnamed client, which has been with the firm for 15 years, would be shifting the assets from its private labelling business to a rival provider as part of a “broader strategic relationship”.

The mandate, which will transfer in the second half of 2021, was responsible for CHF 5m worth of revenues per year.

Big blow

The loss of the multi-billion-pound mandate is the latest blow to Gam’s private labelling business, which has been hammered by redemptions in the last 12 months.

While Gam’s investment business returned to its first quarter of net inflows in the final three months of 2020, the private labelling business leaked CHF 3.4bn (£2.8bn), which it said was driven by one client.

Assets in the private labelling unit ended the year at CHF 86.1bn compared with CHF 86.5bn a year ago.

Last week Gam revealed it had swung to a CHF 15m loss in 2020, compared with a CHF 10.5m profit the year before thanks to a sizeable impairment charge linked to previous M&A deals.

Good pipeline

Despite losing out on the £18bn mandate, head of private labelling Martin Jufer said Gam remained committed to growing this area of the business, adding it had a “good pipeline of future opportunities”.

“We are proud to have helped the client build and grow a complex business over more than 15 years to service the needs of their clients,” Jufer said.

“I am pleased the client has said they will remain as a positive client reference even as they complete an internal strategic change. We will work with them to ensure a smooth transition and look forward to continuing to maintain a close business relationship.”

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