Gam expects to report a net loss of CHF 275m (£237m) for the first half of 2022, a staggering rise from the CHF 2.7m loss it incurred during the same six-month period last year.
The Swiss asset manager revealed that it will record an underlying loss before tax of roughly CHF 15m (£12.9m) for H1 2022, a sharp swing from the CHF 0.8m (£0.7m) profit before tax it reported during the same period last year.
Total assets under management plunged to CHF 83.2bn (£71.8bn) on 30 June 2022, down nearly 20% from the CHF 99.8bn (£86.1bn) on 31 December 2021 and a fall of 14% from CHF 94.8bn (£81.8bn) at the end of Q1.
Gam attributed 80% of the H1 AUM drop to negative market movement of CHF 12.4bn (£10.7bn) and foreign exchange of CHF 0.7m (£0.6m).
Added to this were net outflows of CHF 1.1bn (£0.9bn) in its investment management division and CHF 2.5bn (£2.2bn) in its fund management services arm.
Gam, therefore, expects to report a “non-cash impairment charge of approximately CHF 264m (£228m)”, which would result in a net loss of CHF 275m for the first half of 2022.
It is not clear what impact this might have on the asset manager’s long-term profit targets, which were adjusted earlier this year off the back of falling assets, with Gam expecting to record pre-tax profit of at least CHF 50m (£43m) by full year 2024.
Peter Sanderson (pictured), CEO of Gam Investments said: “During the first half of 2022 we have seen extraordinary economic and geopolitical conditions having a significant impact on markets.
“As a result of this volatility, clients have been exercising greater caution. Despite this, we are encouraged to see improving resilience in our flows with clients allocating to a number of our high conviction active strategies designed to help them navigate this challenging environment.”