Julius Baer and GAM have terminated an eight year long brand licence agreement.
The deal was originally established after the separation of GAM Holding asset management business from Julius Baer in 2009, where GAM was allowed to continue running Julius Baer-branded investment funds in return for a revenue-based licence fee.
The agreement ended on 1 March, with a transition period of six months and was announced yesterday as GAM released its latest annual results.
At the end of 2016, GAM had approximately US$24bn in Julius Baer-branded funds, which it sold through intermediaries. With the termination of the agreement the Julius Baer brand is now in exclusive use for the Julius Baer group.
The termination of the agreement has positively impacted GAM’s 2016 financial results, benefitting net other income under IFRS and net management fees and commissions, respectively, according to company reports.
GAM group chief executive Alexander Friedman, said: “Over the past two years we have been simplifying our brand architecture and redesigning and strengthening our master brand – GAM.
‘Reduce brand complexity’
“The agreement with Julius Baer marks the final step in our strategic initiative to reduce brand complexity. This now removes all confusion over our product branding, allowing us to invest in our single brand, and also positively impacts the Group’s earnings.”
The termination agreement includes a one-time payment by Julius Baer of US$4.1m and the waiver of approximately US$9.49m in licence fees otherwise payable by GAM for the period from the beginning of the fourth quarter 2015 to the end of 2016, according to reports.
GAM will now provide active investment solutions and products for institutions, financial intermediaries and private investors under the one GAM brand. GAM employs about 1,000 people in 12 countries with investment centres in London, Cambridge, Zurich, Hong Kong, New York, Milan and Lugano.
Headquartered in Zurich, GAM is listed on the SIX Swiss Exchange and is a component of the Swiss Market Index Mid (SMIM) with the symbol ‘GAM’. The Group has assets under management US$122.9bn as at 30 September 2016.