GAM’s assets tumble, as Systematic unit suffers renewed outflows amid business shake-up

Falling values

Switzerland-headquartered global asset manager GAM, home to Cambridge-based quantitative hedge fund unit GAM Systematic, saw its assets under management drop to CHF35.5 billion in Q1, down from CHF35.9 billion at the start of 2021, as its embattled systematic business also shed assets during the three-month period.

GAM Systematic – which earlier managed a range of quantitative hedge fund and long-only investment strategies that span equities, debt and multi-asset classes – recorded net outflows totalling CHF400 million, though FX and other market movements added CHF300 million, the group said in a statement on Wednesday morning.

That brought systematic assets to CHF2.8 billion – down from CHF2.9 billion at the start of the year – having plummeted from CHF4.4 billion over the course of 2020.

The first quarter fall was mainly driven by client asset allocation decisions in GAM Systematic Core Macro and GAM Systematic Multi Strategy funds, GAM noted.

GAM’s systematic investment unit – which it acquired in 2016 as Cantab Capital Partners for USD217 million, later rebranding it as GAM Systematic – is currently undergoing a far-reaching shake-up.

This involves migrating its GAM Systematic Alternative Risk Premia and GAM Systematic Core Macro funds onto the new cloud-based GAM SimCorp platform; closing its smaller systematic investment strategies; and cutting certain roles across operations, technology, and infrastructure in Cambridge.

GAM Systematic president Ewan Kirk, co-founder and former CIO of Cantab Capital, who helped oversee its integration into the GAM Systematic quantitative investment platform, is exiting the firm and will take up a board position at BAE Systems in June.

The unit will continue to be led by Anthony Lawler, a former Man Group portfolio manager who was previously head of portfolio management at GAM’s Alternative Investments Solutions (AIS) group.

Among other things, the realignment is aimed at strengthening the systematic business’s focus on sustainability, which includes the addition of a sustainable version of Core Macro. Last year, investors withdrew some CHF900 million from the GAM Systematic Core Macro and GAM Systematic Alternative Risk Premia strategies.

Overall, the Zurich-based firm’s total AUM was hit by net client outflows of CHF989 million during the first quarter, but it also saw positive market and FX movements of CHF1.4 billion in the same three-month period.

Wednesday’s update said all equity portfolios have now been transferred to the front-office GAM SimCorp platform, with all investment portfolios scheduled to be on the platform by the year-end.

Peter Sanderson, Group CEO, said: “I am pleased with the continued progress of our strategy and, although we saw outflows in investment management, we are seeing encouraging client activity on the back of strong investment performance. We are delivering well on our highly scalable, efficient operating platform which enables us to leverage the growth opportunities offered by our market-leading strategies.”