The new CEO of GAM is cutting jobs after folding teams together, finews.asia has learned. He voiced confidence that the troubled asset manager can go it alone, as an American bargain hunter looms.
Swiss-based GAM will make an undisclosed number of investment jobs redundant as it folds fixed income teams together, according to a staff memo from CEO David Jacob seen by finews.asia on Tuesday.
«By consolidating some teams we will be better able to deliver scalable products to our clients worldwide. This will mean that a number of current investment roles will become redundant,» Jacob wrote in a memo, the contents of which were confirmed by a GAM spokesman. The number of jobs wasn't disclosed, and appears to be as yet unclear due in part to U.K. labor law.
Folding Fixed Income
Jacob was a regular board member of GAM until two weeks ago, when he was dispatched to run the Swiss asset manager after CEO Alex Friedman departed. Friedman had been faulted with mishandling the whistleblower crisis which culminated in the company's current fate, as well as paying too much for Cantab, a systematic trading house GAM bought in 2016.
GAM will fold its various fixed income businesses in New York, London and Zurich into four main areas: an emerging market bond platform; global credit; asset-backed and mortgage-backed securities; and a strategic bond offering.
Clients Worried
The firm will slim its equities business including quantitative and discretionary strategies by consolidating Europe into a single team, while maintaining non-European equities. «I have spoken to clients who, while worried by the negative press, are willing to give us time because they value our products and the good service they receive from GAM,» Jacob said.
«I have been hugely encouraged by the level of support we have as we seek to strengthen our business and differentiated product offering.» Jacob was CEO of a fixed income asset manager snapped up by Allianz two years ago, and previously with British asset manager Henderson and Swiss bank UBS before being parachuted in two weeks ago.
Bargain Hunter Loads Up
GAM's job cuts come as Mario Gabelli, a well-known American bargain hunter, loads up on the troubled asset manager's stock. A vehicle controlled by Gabelli recently breached the 3 percent threshold in GAM shares which triggers disclosure under Swiss securities law.
Jacob didn't address Gabelli in his letter to staff, saying only that he had spoken to a range of external stakeholders. «We have some loyal shareholders who want to see us return to health and to think long term about our business.»
