Cantab Capital Partners has already cost GAM Holding a whole lot of money. The asset manager bought the quantitative hedge fund for an upfront $217 million in 2016, plus future performance payouts based on management fee revenue, just in time for one of Cantab’s occasional disastrous years. This led to a $59 million impairment charge, which did come with the silver lining of having to pay substantially less in those future payouts, which GAM took into account in its financial statements. This did not sit well with the Swiss SIX stock exchange, which decided that GAM had not suffered enough vis-à-vis Cantab, and needs to pretend that the deal was not a disaster in its books. And GAM is quite frankly too busy dealing with other, more pressing fires to continue to argue.
The Swiss asset manager will pay a SFr500,000 ($515,164) penalty and recognise a financial liability of SFr35m in its full-year accounts…. The fine is a further blow for GAM, which this month issued its third profit warning in less than two years as it struggles to move on from a high-profile scandal involving a former star portfolio manager….
The fund house said it would be required to include the financial liability at fair value, which it estimates as about SFr35m at the end of 2019, and to restate any affected historical comparative amounts in its next consolidated financial statements which are due to be published in February…. GAM had objected to the sanction in December, arguing that it and its auditors believed that the fees did not need to be recognised as a liability until they were definitively determined.