GAM’s senior fund managers have publicly backed the proposed sale of the Swiss group to UK rival Liontrust, an uncommon intervention designed to shore up assist for a deal that has come beneath fireplace from shareholders together with French billionaire Xavier Niel.
In an open letter to GAM’s board on Tuesday, fund managers on the Swiss firm mentioned that there was a “cultural alignment between GAM and Liontrust” and that London-listed Liontrust had an “spectacular technique for tips on how to develop the enlarged firm”.
The portfolio managers added the proposed sale to “a extremely regarded peer with a heritage in fund administration, a powerful file of acquisitions and integrations and persistently robust profitability is in the very best pursuits of GAM purchasers”.
As soon as a high-flying asset supervisor, GAM spent months trying to find a purchaser after struggling to totally get better from a 2018 scandal over its holdings of riskier non-public debt. After twice delaying the discharge of its outcomes to purchase extra time to strike a deal, it lastly agreed a £96mn sale to Liontrust this month.
Nevertheless, the sale has confronted opposition on a number of fronts, together with from Swiss entrepreneur Marco Garzetti who final week revealed plans to speculate SFr65mn in GAM in an try and protect the Swiss group’s independence.
Niel has additionally led a consortium of buyers who’ve taken a stake in GAM, arguing that the shares are “undervalued” and provide “important upside”.
Mergers between asset managers have generally stumbled over the problem of integrating companies whose chief asset is continuously their folks, making the intervention by GAM’s fund managers a big one.
Final week, Garzetti mentioned that he and his colleagues at Taure Make investments have been ready to make “a long-term dedication” to GAM, “essentially flip the corporate round and make a contemporary begin”.
Nevertheless, GAM rejected Taure’s proposal, stating that it “materially undervalued the agency”. The board mentioned Taure’s provide would worth every GAM share at roughly SFr0.26, whereas Liontrust’s was greater than 2.6 instances increased.
The authors of the letter to GAM’s board embrace third-party teams, Atlanticomnium and Fermat Capital, that assist handle cash for GAM.
The Niel-led group mentioned that among the situations connected to the Liontrust provide have been “unfair”. Liontrust is searching for to amass GAM’s funding enterprise however dump its fund providers arm.