GMHLY Gam Holding Ag (PK)

Swiss money manager GAM Holding AG said it plans to create shares to pay for deals, as it posted higher-than-forecast profits.

The Zurich-based firm, which a year ago set out a plan to boost sales and focus on higher-margin products, said it plans to seek authorization to create up to 32.7 million shares, equal to one-fifth of its share capital, to "further enhance GAM's strategic flexibility—for instance in taking advantage of future opportunities for acquisitions."

The move has echoes of hedge fund firm Man Group's announcement last week that it would retain $480 million to look for deals, rather than buy back shares, after the recent market selloff.

GAM said pretax profit for 2015 was 197.8 million Swiss francs ($198.1 million), down 9% from a year earlier but around 7% above analysts' expectations. Profits were supported by higher-than-forecast performance fees of 82.8 million Swiss francs, up 26% from a year earlier, and a 1% drop in expenses.

GAM shares, which are down around 9% since the start of the year as the stock market selloff has hit the valuation of asset management companies, were up 6.3% at 15.25 Swiss francs in morning trading.

"We believe these results show solid progression and will await judgment on M&A until more details are known," said RBC Capital Markets analyst Peter Lenarados.

Alexander Friedman, who was appointed chief executive 18 months ago to help drive sales of the firm's funds, said market turbulence this year would provide investment opportunities for its funds but added "we will not be immune to negative market trends."

Assets under management in GAM's main unit fell 5% to 72.3 billion Swiss francs, as market and currency moves more than offset 300 million Swiss francs of client inflows. The firm's net management fees and commissions dropped 5% to 517.8 million Swiss francs.

Write to Laurence Fletcher at laurence.fletcher@wsj.com

(END) Dow Jones Newswires

March 01, 2016 06:25 ET (11:25 GMT)

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