January 17, 2020 / 10:03 AM / a month ago

UPDATE 1-Asset manager GAM Holding sees 2019 break-even after outflows

(Adds market reaction)

ZURICH, Jan 17 (Reuters) - Swiss asset manager GAM Holding expects to break even for 2019 as performance fees improved, though it saw a sharp outflow of assets in the aftermath of a row with its former star fund manager.

GAM called a truce with former star manager Tim Haywood last year after months of wrangling over his sacking, drawing a line under a saga that hammered its stock.

Its shares, which fell more than a quarter in 2019, advanced more than 6% as its estimated 2019 results beat expectations.

GAM expects to report underlying 2019 profit before taxes, excluding non-recurring and acquisition-related items, of around 10 million Swiss francs ($10.4 million), down from 126.7 million for 2018, it said on Friday.

This was driven mostly by a drop in assets under management (AuM) and related revenues in investment management to an estimated 48 billion at the end of 2019 from 56.1 billion francs at the end of 2018.

AuM at its private labelling business were set to be 84 billion, from 76.1 billion a year earlier.

GAM expects to break even in 2019 according to IFRS accounting standards including one-off and acquisition-related items. It had an IFRS net loss of 929.1 million in 2018 after taking an 883 million franc goodwill impairment charge.

Full results are due on Feb. 20.

GAM shares were up 6.3% by 0920 GMT.

Vontobel analyst Andreas Venditti called the 2019 profit numbers slightly better than expected due to improved performance fees and cost controls.

Zuercher Kantonalbank analyst Michael Kunz, however, highlighted AuM in investment management that just missed his estimate.

“As the performance contribution should have been clearly positive given the capital markets of the past year, this figure shows that GAM must have continued to have had considerable outflows,” he said in a note to clients.

GAM may have been able to prevent sliding into the red for 2019, but there was no sign of a turnaround in assets under management, he added.

$1 = 0.9654 Swiss francs Reporting by Michael Shields; editing by Emelia Sithole-Matarise

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