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GAM fund managers publicly back Liontrust takeover

GAM’s senior fund managers have publicly backed the proposed sale of the Swiss group to UK rival Liontrust, an uncommon intervention designed to shore up assist for a deal that has come underneath hearth from shareholders together with French billionaire Xavier Niel.

In an open letter to GAM’s board on Tuesday, fund managers on the Swiss firm stated that there was a “cultural alignment between GAM and Liontrust” and that London-listed Liontrust had an “spectacular technique for learn how to develop the enlarged firm”.

The portfolio managers added the proposed sale to “a extremely regarded peer with a heritage in fund administration, a robust file of acquisitions and integrations and constantly robust profitability is in the perfect pursuits of GAM shoppers”.

As soon as a high-flying asset supervisor, GAM spent months trying to find a purchaser after struggling to totally recuperate from a 2018 scandal over its holdings of riskier non-public debt. After twice delaying the discharge of its outcomes to purchase extra time to strike a deal, it lastly agreed a £96mn sale to Liontrust this month.

Nonetheless, the sale has confronted opposition on a number of fronts, together with from Swiss entrepreneur Marco Garzetti who final week revealed plans to speculate SFr65mn in GAM in an try and protect the Swiss group’s independence.

Niel has additionally led a consortium of traders who’ve taken a stake in GAM, arguing that the shares are “undervalued” and supply “vital upside”.

Mergers between asset managers have typically stumbled over the problem of integrating companies whose chief asset is ceaselessly their individuals, making the intervention by GAM’s fund managers a big one.

Final week, Garzetti stated that he and his colleagues at Taure Make investments have been ready to make “a long-term dedication” to GAM, “basically flip the corporate round and make a recent begin”.

Nonetheless, GAM rejected Taure’s proposal, stating that it “materially undervalued the agency”. The board stated Taure’s supply would worth every GAM share at roughly SFr0.26, whereas Liontrust’s was greater than 2.6 instances increased.

The authors of the letter to GAM’s board embody third-party teams, Atlanticomnium and Fermat Capital, that assist handle cash for GAM.

The Niel-led group stated that a number of the circumstances connected to the Liontrust supply have been “unfair”. Liontrust is searching for to amass GAM’s funding enterprise however unload its fund providers arm.