Swiss fund giant GAM hit a 20-year low on Thursday after a £750 million writedown and bleak profit forecasts forced it to scrap its prized dividend.
The company, which is moving away from its original model as a confederation of individual boutique fund managers, also plans to slash around 90 jobs from its 900-strong workforce.
The dividend suspension will disappoint top shareholders, who include the biggest investor Silchester Partners, led by Brit tycoon Stephen Butt. The shares fell 30% to a two-decade low.
GAM has been hit by the downturn in stock markets and the recent liquidation of the Swfr7.3 billion (£5.8 billion) jumbo bond fund, Absolute Return Bond Fund.
Its UK-based manager, Tim Haywood, was suspended in July over allegations of poor risk management.
Chief executive David Jacob, who came in last month to stem the crisis, has taken a massive Swfr925 million goodwill impairment onto the books.
This is mainly linked to lower assets under management but also the badly timed takeover of UK hedge fund Cantab Capital.
Profits are expected to be Swfr47.5 million lower at Swfr125 million this year and next year will be even worse, it said. Performance fees crashed to Swfr3 million from Swfr44.1 million last year.
