In the meantime, even fund houses that haven’t invested in GAM have an opinion about its future, while its official bidders are increasingly under pressure as finews.asia found out.

One of the curiosities of GAM's latest chapter is that none of the currently relevant topics will be on the agenda at this Thursday's shareholder meeting.

Neither the takeover bid of the British fund company Liontrust will be officially discussed nor will criticism coming from investor groups around the French billionaire Xavier Niel and the Swiss entrepreneur Marco Garzetti.

Crisis of Confidence

The once proud Zurich-based fund house is still worth 96 million francs on the stock exchange and is trading at two-thirds of its intrinsic value. Most investors have probably already written off the position in their portfolios.

Despite – or perhaps because of – its low valuation, the fund house is now at the center of a tug-of-war, as if it were a jewel of the Swiss asset management industry. It is true that numerous GAM funds have recently outperformed the market. But since 2018, the company has been mired in a crisis of confidence from which it has never emerged, despite tough cuts. Meanwhile, players who are yet to become shareholders, want to have a say in the asset manager's future.

Turnaround Plans

This is the case with Garzetti's company, Taure Invest, which joined the bidding war last week and aims to acquire 68 percent of GAM and prevent the Zurich-based company from falling into foreign hands. The group intends to convince existing GAM shareholders of its turnaround plan in the coming days, as a representative reiterated to finews.com.

At the end of April, a group of investors including companies NewGAMe and Bruellan backed by billionaire Niel opposed a GAM takeover.

The parties announced their intention to exceed the threshold of 10 percent of GAM votes. They are also betting on a turnaround and explicitly oppose the planned sell-off of the fund services business.

Open to All

The group has already prevailed on Liontrust's takeover bid to be formally reviewed by the takeover board of the Swiss stock exchange SIX.

But NewGAMe and Bruellan have yet to make an official bid; the share purchase envisaged by Garzetti would value the firm at 26 centimes per share, according to GAM's board of directors. The British bid, which will pay around 107 million Swiss francs for GAM's fund range and global distribution, looks more than two and a half times higher.

This reinforces the impression that the bidding dispute has become open to all. «If I am to look at the offers of the other parties at all, they have to be better than those of Liontrust,» one financial professional, said summing up the situation.

Unwavering Negotiation

In contrast, GAM's board of directors comments on practically every twitch; at the same time, however, it is preparing the sale as if the critics simply did not exist. For example, finews.com recently reported that the fund company is in talks with the Irish provider Carne. The latter is apparently interested in GAM's fund management services in Zurich and Luxembourg. This is precisely the business that Liontrust does not want to buy and for which NewGAMe and Garzetti are on the barricades.

But for GAM's board members, it is clear that after years of trying, a turnaround under their own steam is no longer an option. They support the bid of the British, who, according to their own information, already have around 20 percent of the shareholder votes behind them.

Cashflow Issues

Vontobel analyst Andreas Venditti is also very skeptical. Despite the mergers that have taken place, GAM still has a fairly broad product range and global distribution, he points out. «If a standalone solution is sought for the company, drastic cuts would have to be made here again - with an uncertain outcome.» Because it is not clear whether customers would appreciate an even more drastic reduction in the product range and distribution.

He also points out that GAM's financial situation has deteriorated significantly in recent months. The loss of liquidity is particularly worrying: according to Liontrust's calculations, the fund house will run out of money in the course of next year. «In the meantime, it's hard to see how GAM can implement radical measures to return to a reasonable profit without external help,» Venditti said.

Worst Performer

Liontrust's official offer is expected to be presented to shareholders around June 9. The offer period will then run from June 26 to July 21. At Liontrust, the general meeting at which shareholders are to give the green light is scheduled for July 7. As is known, Liontrust will «pay» the purchase price in its own shares, which is why a capital increase will be necessary. The acquisition is then expected to be completed in the fourth quarter of this year.

This sounds like a fixed timetable, and in an interview with finews.asia, Liontrust CEO John Ions recently appeared quite relaxed. But Liontrust cannot stand by as GAM is open to everyone. «Liontrust is now probably also under some pressure to go ahead with the takeover: the stock is one of the worst performers among listed European asset managers in the last twelve months,» he said.

With assistance from Fredy Greuter