UPDATE 2-GAM AuM rise but hedge funds still see outflows

* GAM says saw positive net new money since June

* Says assets rose to 113 bln Sfr from 105 bln Sfr

* Says inflows mainly to new fixed income range

* Alt. assets see outflows, new money in inst'l alts

* Shares up 4.5 pct (Adds details from statement, analyst comment, shares)

ZURICH, Nov 17 (Reuters) - Asset manager GAM Holding AG GAMH.VX said assets under management rebounded between June and October, although inflows were mainly into low margin products with alternative products still under pressure. GAM, which began trading as a separate company in October after splitting from Swiss bank Julius Baer (BAER.VX), said the main driver of the rise in assets was its new fixed income range in the Swiss and Global Asset Management unit.

"Clients continue to invest primarily into the range of attractive fixed income and commodity products, while not yet re-committing to equities," the group said in an interim statement on Tuesday.

Investors looked beyond the modest outflows from high-margin alternative products, such as funds of hedge funds, and focused on the overall inflows and a strong cash balance as a sign the company has turned the corner, sending shares up 4.5 percent to 12.88 Sfr at 0856 GMT.

"We continue to like the undervaluation story, given the amount of net cash of almost around 1 billion Swiss francs ($992.1 million) and business momentum that could gain more traction," said Kepler Capital Markets analyst Mathias Bueeler in a research note.

Assets rose to 113 billion Swiss francs from 105 billion Swiss francs at the end of June, excluding the U.S. unit Artio Global Investors (ART.N) which was listed on the New York Stock Exchange at the end of September.

GAM Holding said the Artio sale resulted in net proceeds of $621 million, while the 28 percent stake it retained in Artio had also risen in value, resulting in an overall gain of around 850 million Swiss francs.

The company said in that business development had been in line with expectations and that, given its strong capital position, it did not envisage refinancing a 150 million Swiss franc bond which expires in March 2010.

Assets in the GAM unit climbed to 52 billion francs from 49 billion francs after falling precipitously during the financial crisis. In the second half of 2008 alone outflows from GAM hit 24.5 billion francs, and were particularly pronounced in the funds of hedge funds segment. [ID:nLO376425]

These assets include about 10 billion francs from UK-based fixed income specialist Augustus Asset Managers Ltd, which GAM bought in April and which accounted for all the inflows.

Swiss and Global Asset Management, the "white label" unit which distributes third-party products, saw assets rise to 71 billion francs, including 10 billion francs of Augustus assets managed by GAM but distributed by Swiss and Global.

Swiss and Global is a low margin unit, with the company estimating margins will be 23-25 basis points of assets under management. ($1=1.009 Swiss Franc) (Reporting by Martin de Sa'Pinto; Editing by Mike Nesbit)