GAM’s top fund manager has publicly backed a proposed sale of the Swiss group to British rival Liontrust, an unusual intervention to back a deal that has been stymied by shareholders including French billionaire Xavier Niel. slammed deal.
In an open letter to GAM’s board on Tuesday, the Swiss firm’s fund manager said there was “a cultural alignment between GAM and Liontrust” and that London-listed Liontrust had “discipline on how to grow the enlarged company.” Impressive strategy”.
The portfolio manager added the proposed sale to “well-respected peers with a fund management heritage, strong acquisition and integration track record and continued strong profitability, which is in the best interest of GAM’s clients”.
GAM, once an ambitious asset manager, has spent months looking for a buyer after struggling to fully recover from a scandal in 2018 for holding riskier private debt. It finally agreed this month to sell to Liontrust for £96m after delaying the release of results twice to buy more time to reach an agreement.
However, the sale has faced opposition from several quarters, including from Swiss entrepreneur Marco Garzetti, who last week revealed plans to invest SFr65m in GAM to keep the Swiss group independent.
Niel also leads a syndicate of investors who own GAM shares, arguing that the shares are “undervalued” and offer “significant upside.”
Mergers among asset managers sometimes present challenges in integrating businesses whose main asset is often their employees, making the intervention of GAM fund managers significant.
Last week, Garzetti said he and his colleagues at Taure Invest were ready to make a “long-term commitment” to GAM, “basically turning the company around and starting over.”
However, GAM rejected Taure’s proposal, saying it “significantly undervalues the company”. Taure’s bid valued each GAM share at about 0.26 Swiss francs, while Liontrust’s bid was more than 2.6 times higher, the board said.
The authors of the letter to GAM’s board include Atlanticomnium and Fermat Capital, third-party groups that help GAM manage its funds.
The panel, led by Niel, said some of the strings attached to Liontrust’s proposal were “unfair”. Liontrust is looking to buy GAM’s investment business but sell its fund services division.