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The badets of the Swiss badet manager GAM collapsed in the third quarter of 2018, to about 146 billion francs, as announced the company Tuesday. Investors have withdrawn even more money than expected by badysts. "The consequences of the suspension (…) have been a clear setback for GAM," said CEO Alexander Friedman. But now, he wants to get society back on track. He failed to convince investors of this announcement. On the stock market, the stock has fallen to the lowest level since 2009.
By the end of July, GAM had unloaded a flagship fund manager from domestic policy violations. The company provides evidence that, in some cases, the man may have violated the rules regarding the acceptance of gifts and entertainment, as well as the obligations of signing. Many professional investors escaped from the funds, which led GAM to liquidate the investment vehicle. On the reduction of badets under management in the third quarter, 7.7 billion additional francs were charged to this resolution, which represents 8.1 billion other investors withdrawn.
However, during the current month, cash outflows have slowed, said chief financial officer Richard McNamara, in conversation with the Reuters news agency. "We still recorded net outflows in the first three weeks of October, but the trend has improved significantly in the third quarter." Subsequent development also depends on the returns that GAM funds would achieve relative to the competition. In order to maintain its profitability, GAM wants to increase its savings efforts and reduce its investments. "Like any finance company, we have a whole range of levers to reduce costs while reducing costs," Friedman said. Long-term goals, which include an operating margin of 35 to 40%, continue to apply.
The price of GAM shares, which has already halved since the beginning of the year, has yet collapsed by a fifth. "Some market players are concerned that not only customers have lost confidence in GAM, but also that fund managers can leave the company," said a trader. "It could accelerate the downward spiral."
Despite the vote of censorship, investors Friedman wants to stick to his position. "I am 100% committed to doing my best in my role," said the American. It was covered by a newspaper article stating that GAM was looking for a potential buyer. The company's management was determined to seek every possible means to maximize shareholder value, he said.
(Reuters)
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