UPDATE 3-GAM assets rise in Q1 on low-margin inflows

* GAM AuM rises to 119 bln Sfr

* Company says had inflows into single hedge funds

* Says outflows in fund of funds business continued

* Shares up 1.6 pct

(Adds analyst comment, shares)
ZURICH, April 13 (BestGrowthStock) – Swiss asset manager GAM Holding
(GAMH.VX: ) said assets rose 5 percent in the first quarter as
performance gains and money flows into mainly low-margin
products outweighed client withdrawals from funds of hedge
funds.

GAM Holding said inflows into its Swiss and Global (S&G)
unit were mainly in commodities and fixed-income products, with
smaller inflows in higher-margin equity products.

In the GAM unit, whose products command higher margins than
at S&G, single manager, mainly fixed-income hedge funds had
inflows. Outflows continued from managed portfolios and funds of
hedge funds, though these slowed relative to 2009.

“Q1 seems to continue H2’s positive momentum. While it’s not
yet a big leap forward, positive business continuation supports
our buy case,” said Kepler Capital Markets analyst Mathias
Bueeler.

GAM shares rose 1.6 percent to 13.70 Swiss francs by 0726
GMT, outperforming a 0.2 percent decline in the Swiss all-share
index (.SSHI: ).

“Inflows in the single manager hedge funds are encouraging,”
said GAM Holding spokesman Thomas Schneckenburger.

“The continued outflows from managed portfolios and funds of
hedge funds from third-party private clients were expected, and
came at a slower rate than in 2009.”

Analysts said earlier this year that profit margins at GAM
could face continued pressure from withdrawals, mainly from
funds of funds, by clients at former owners Julius Baer
(BAER.VX: ) and UBS (UBSN.VX: ), and declining inflows from those
banks.[ID:nLI311680]

Assets under management (AuM) climbed to 119.1 billion Swiss
francs ($112.4 billion) from 113.6 billion francs at the end of
2009, with performance-related gains in equity and fixed-income
funds also adding to the increase.

The total excludes the double count of 12.9 billion francs
of funds distributed by S&G, a “white label” unit that
distributes third-party products, but managed by Augustus Asset
Managers, part of the GAM unit.

Augustus manages GAM’s fixed-income hedge funds, which have
lower margins than other single hedge funds. The Augustus funds
had the largest single hedge fund inflows, which had the effect
of increasing overall margins at S&G but depressing them at GAM.
Fees earned by the GAM fund of hedge funds unit have slumped
since 2008, when assets shrank by about 40 billion francs as
values tumbled and clients fled to safer, lower-margin cash and
government bonds. Assets are currently at around a third of
their peak level.

The company, which split from Swiss private bank Julius Baer
(BAER.VX: ) in October, is made up of former Baer hedge fund of
funds unit GAM Holding, and S&G.

Margins are higher at the GAM unit, which now also offers
single hedge funds and a managed portfolio platform.

Investment Basics

($1=1.060 Swiss Franc)
(Reporting by Martin de Sa’Pinto; editing by Will Waterman and
Karen Foster)

UPDATE 3-GAM assets rise in Q1 on low-margin inflows