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GAM First-Half Profit Climbs as Charge on Artio Stake Drops

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Aug. 14 (Bloomberg) -- GAM Holding AG, the asset manager that split from Julius Baer Group Ltd. almost three years ago, said first-half profit climbed after booking a lower charge on its stake in Artio Global Investors Inc.

Net income rose to 35.9 million Swiss francs ($36.9 million) from 2.4 million francs a year earlier, Zurich-based GAM Holding said today in a statement. Stripping out the Artio revaluation and other one-time items, profit dropped 30 percent to 70.2 million francs.

GAM Holding wrote down the value of its 28 percent holding in New York-based Artio by 22.5 million francs, less than a quarter of the year-earlier cut. The firm attracted net new money of 900 million francs, reversing a net outflow of more than 4 billion francs in the preceding six months. Assets under management climbed 4 percent to 111.1 billion francs during the first half.

“They’re managing the business pretty effectively in a very difficult market and the inflows were better than expected,” said Peter Lenardos, a London-based analyst at RBC Capital Markets, who has an outperform rating on the stock.

GAM Holding rose as much as 2.7 percent and was up 1.8 percent to 11.35 francs at 9:57 a.m. in Zurich trading, valuing the company at more than 2.1 billion francs. The stock has climbed 11 percent this year.

Uncertainty

“We have the ability to capture client flows even in an environment where demand is thin and focused on specific, narrow areas,” Johannes De Gier, chairman and chief executive officer of GAM Holding, said in the statement. “Unless market conditions were to improve dramatically, we expect uncertainty to persist and to continue to impact client behavior.”

De Gier said the company will prioritize cost management after its ratio of expenses to income worsened to 69 percent from 61.6 percent a year ago.

GAM Holding, which is buying back as much as 20 percent of its shares by 2014, said this year’s dividend will be consistent with prior years.

To contact the reporter on this story: Giles Broom in Geneva at gbroom@bloomberg.net

To contact the editor responsible for this story: Frank Connelly at fconnelly@bloomberg.net

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