GAM, Jupiter Post Big Profits In First Half

Aug 24 2010 | 12:25pm ET

A pair of European hedge fund firms announced strong first halves this week, with both enjoying increases in assets under management.

GAM Holding said its net profit for the first six months of the jumped 36% from a year-earlier and assets under management were up 3%—thanks to inflows of 5.6 billion Swiss francs. The turnaround was most noticeably in GAM’s troubled fund of hedge funds unit, where losses evaporated and investors added capital for the first time in two years.

Still, the firm said it remained concerned, as “private investors remain generally risk-averse and, in particular, continue to favor other asset classes over equities and hedge fund strategies,” according to CEO Johannes de Gier.

The outlook is not all doom-and-gloom: GAM was confident enough in its probable earnings for this year and next to announce at 10% share buyback program and to suggest it may be on the prowl for acquisitions.

“Given our strong capital position, it does not impede the group’s growth prospects,” de Gier said of the share buyback, which could amount to 240 million Swiss francs.

GAM isn’t the only one celebrating a big first half. Jupiter Fund Management, which went public in June, said it turned a £9.7 million profit during the period, compared to a £4.7 million loss for the first six months of last year.

“Against a challenging backdrop of falling equity markets and continued volatility, Jupiter has had a strong first half of the year,” CEO Edward Bonham Carter said. “Whilst markets are likely to remain volatile, we believe the group is well-placed for continued growth.”

Jupiter’s assets under management rose 1.6% to £19.8 billion in the first half. The firm said it would not pay a dividend until the end of the year.

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