British fund management company Liontrust wanted to purchase and stabilize crisis-ridden Swiss competitor GAM. Following the failed takeover bid, Liontrust itself is now struggling on several fronts.

At the end of the month, Liontrust Asset Management is to suffer further disgrace: the stocks of the publicly listed investment company will be ejected from the FTSE 250 Index on the London Stock Exchange. This is to happen after they lost more than half of their value over the year.

A Failed Deal

This will end a truly awful year for the former high flyer among the British fund providers. In Switzerland, the company, under CEO John Ions, attempted to take over its crisis-ridden competitor GAM. His forward strategy, which would have seen Liontrust grow faster thanks to the GAM assets and inherit the Swiss company’s global distribution network, was not successful, however.

Instead, an investor alliance, led by the Western Swiss companies NewGAMe and Bruellan, succeeded in acquiring a majority in the investment company. Since then, the new owners have started restructuring GAM.

Billions in Outflows

In one article, the British newspaper «Financial Times» (behind paywall) takes a critical look at the Ions era at Liontrust. Since he was appointed CEO in 2010, he has launched a wave of acquisitions and bought seven companies within twelve years. These efforts have brought mixed results, however, according to the report.

And because of the defeat with GAM, the CEO has now entered the toughest phase of his tenure, as the paper quoted observers saying.

Things are not looking great from a client perspective either. As finews.ch also reported, investors withdrew an equivalent of 1.7 billion Swiss francs in assets during the third quarter alone. Over the first nine months, the total outflows amounted to 8.75 billion Swiss francs. However, Liontrust is sticking to its portfolio, including U.K. shares, which are currently quite unpopular in the market.

Departures from the Board of Directors

Also according to the report, there was a dispute on the Liontrust board of directors last spring, which led to two board members stepping down last September. The report also states that there is still a risk that reputable fund managers will turn their backs on the asset manager.

This would be the worst thing that could happen to an investment company. But still, we are not quite there yet.