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Gottex on course for profitability by end of 2015

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Global asset management group Gottex Fund Management Holdings is on target to achieve operational profit by the end of 2015, according to the company’s annual results statement for 2014.

Gotten says that synergies from the merger with EIM Group (EIM) are now expected to exceed USD20 million and to be fully implemented by June 2015. As a result the group is targeting to be operationally profitable by Q4 2015.

The later than planned completion of the merger was due to regulatory delays which held up implementation of substantial synergies. Together with lower average fee rates, this contributed to an adjusted operating loss of USD 12.3 million for 2014 compared to USD 3.7 million in 2013.

The company has however seen strong product performance during the first two months of 2015 with, in particular, multi-asset, Asia and diversified hedge fund solutions posting strong results. Good progress has also been achieved over the last six months in developing a Dynamic Alternative Risk Premia product seeking to provide investors cost efficient access to liquid hedge fund-like-returns.

Group client assets totalled USD 8.2 billion as at 31 December 2014 compared with combined client assets of USD 8.1 billion one year earlier. New assets raised since the start of the year 2015 amount to USD 400 million.

The firm is planning to launch the Gottex Yellow Mountain UCITS Fund, providing access to China A-Shares, plus Multi-Asset Growth and Alternative Risk Premia UCITS products in Q2 2015.

Joachim Gottschalk, Chief Executive Officer, says: “We are very pleased that we completed the merger between Gottex and EIM at the end of September 2014 and also with the progress we have achieved in terms of integrating people, processes and systems. We are repositioning the company to counter the challenging headwinds in the hedge fund of fund space, which is being affected by moderate average returns and fee pressures. We are very disappointed with the financial loss for the year to which the delay of the implementation of our synergies contributed, but with USD 20 million of identified synergies expected to be in place by Q2 2015, we are seeing a substantial reduction in the group’s cost base and are aiming to be operationally profitable by the end of 2015.”

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