Asset manager GAM suffered a slump in its business and further outflows of money. The company said it had already introduced measures to counter the drop.

GAM's net profit slipped 3 percent to 134.3 million Swiss francs last year, including 40 million francs in one-time revenue, the firm said in a statement on Thursday. 

Its operating business worsened, accentuating a trend seen in GAM's first-half results. Underlying profit dropped 39 percent on the year, as performance fees almost completely fell away.

Poor Performance, Outflows 

GAM's funds performed below average last year, leading the firm to take in just 3 million francs in performance fees, compared to 82.8 million francs in the prior period.

The poor asset management performance again led to outflows: clients pulled 10.7 billion francs from GAM last year. The firm said that risk aversion had risen over political and economic uncertainty.

Spending Cuts 

In its investment management arm, GAM now manages 68.2 billion francs in assets following recent acquisitions Taube Hodson Stonex and Cantab. GAM's private labeling unit won 4.3 billion francs in new money, tipping assets under management to 52.5 billion francs.

Chief Executive Alex Friedman slashed spending last year, cutting jobs in the process. Personnel expenses dropped 15 percent as a result, helping GAM to lower overall spending by 11 percent.

Initiatives Bearing Fruit

Friedman said that GAM is countering outflows and the lack of performance fees through strategic initiatives, which are slowly bearing fruit. The company said it remains focused controlling costs and improving efficiency.

«It is clear to us that sustainable long-term growth cannot be achieved through cost savings alone. We are fully focused on improving investment performance, continuing to offer differentiated products that meet our clients’ changing needs and bolstering our global distribution capability – all while maintaining strict cost control and improving operating efficiencies,» said Friedman.

Cutting the Cord from Julius Baer

GAM is also reinforcing its brand name: since it was spun out of Julius Baer in 2009, it has still used the Swiss private bank's branding for some funds. The agreement between the two firms has now ended.

The asset manager had also offered some Julius Baer funds in its offering under a Swiss & Global brand, which has now been simplified to «remove all confusion over our product branding, allowing us to invest in our single brand,» Friedman said.

Dividend, Share Buyback

Julius Baer will pay GAM 4.2 million francs, as well as forgo 9.6 million from a licensing agreement between the two.

Despite the poor year, GAM still wants to pay out a 0.65 franc per share dividend to shareholders – unchanged on the year. GAM's board has also proposed another share buyback program.