For the first time in a long time, Swiss fund of hedge funds firm GAM Holding had what can only be described as a good year.
The Zurich-based firm enjoyed strong growth in profits and its best inflows since the start of the financial crisis, it said yesterday. GAM's underlying profit for 2010 soared 35% to 202.2 million Swiss francs, although for practical purposes that figure was almost wiped out by writedowns and charges.
Still, the firm reported a net inflow of 8 billion Swiss francs, a more than 16-fold increase from 2009 and the best since the beginning of the financial crisis. Most of the new money, 5.9 billion francs worth, went into its GAM division, which houses the firm's hedge funds and funds of funds. Last year was the first time since 2007 that the unit had seen inflows, even though its funds of funds continued to bleed assets.
All told, GAM's assets under management rose 4.2% on the year, both on the inflows and strong performance.
"Market flows indicate that investors are tentatively recovering their interest in equities and hedge funds," CEO Johannes de Gier said. "However, sentiment remains fragile due to persisting macroeconomic uncertainty and it is therefore too early to say whether this encouraging trend will be sustained for the rest of 2011."
Despite its caution, GAM did announce a plan to buy back up to 20% of its outstanding shares over the next three years. The new buyback offer replaces one instituted last year, which saw GAM repurchase about 5% of its shares.