Gottex Fund Management returned to operational cash flow profitability in the second half of 2012, according to the company’s annual results for the year ended 31 December 2012.
Financial performance was in-line with expectations with gross revenues of USD47.9m (2011: USD58.6m) and substantially reduced overall operational cost (excluding Penjing acquisition-related charges) of USD43.7m (2011: USD48.2m). This resulted in an operating loss of USD4.1m (2011: USD0.7m profit); a diluted EPS loss of USD0.28 (2011: USD0.09) was generated due to the impact of certain impairment charges.
Gottex’s flagship market neutral plus product, which has outperformed its index by 14.5 per cent cumulatively over the last four years since the start of the financial crisis, as well as the alternative credit strategy, generated incentive fees during 2012.
Completed acquisition of Hong Kong-based Penjing Asset Management in August 2012 and recently announced agreement to acquire a majority in UK-based Frontier Investment Management.
Gottex currently has cash and liquid financial investments of USD34.6m.
The company has continued to see positive product performance during the first two months of 2013 with the majority of its core market neutral, multi-asset, alternative credit, US equity and Asian products up between two per cent and eight per cent.
Joachim Gottschalk (pictured), chairman and chief executive officer, says: “In a challenging year, which included a major market correction during the second quarter, our products showed strong performance. Despite client flows remaining slow in the industry, we see increasing interest from investors who have a large allocation to longer term bonds, in shifting their exposure towards absolute return products. In such an environment investors, in particular those without the necessary infrastructure and resources, are looking for support and advice in implementing alternative solutions. This trend will boost our industry. In terms of our strategic initiatives, good progress has been made in Asia, as well as with our multi asset endowment style investment products and we expect these two business units to continue their growth in 2013.
“I am pleased that Gottex returned to cash operational profitability during the second half, with a strong and debt-free balance sheet maintained. As can be seen from our recent Frontier announcement, we will continue considering non-organic opportunities while maintaining control of our cost base. The long-term strategy of the company is to become a diversified multi asset manager, with a strong core in hedge fund solutions, consulting and multi-asset investing.”