* Swings to 2018 net loss of 929 million Swiss francs
* Dismisses top money manager
* Shares fall more than 8 pct before paring losses (Adds comments from call, market reaction)
By Michael Shields
ZURICH, Feb 21 (Reuters) - Shares in GAM Holding AG extended their fall on Thursday as the Swiss asset manager said it faced another challenging year after swinging to a giant 2018 loss.
GAM had a torrid year after being forced to write down the value of its $217 million acquisition of British hedge fund Cantab and closing several funds after suspending top money manager Tim Haywood for alleged breaches of its rules.
It said on Thursday it had sacked Haywood for "gross misconduct. There was serious failure to achieve the standard of skill and care which were to be expected of someone in his position."
Haywood has not responded to requests for comment.
Assets under management (AuM) continued to fall, hitting 132.2 billion Swiss francs ($132.2 billion) at the end of the year from 139.1 billion at the end of November.
"GAM remains in a very difficult situation," Vontobel analyst Andreas Venditti said in a note, citing significant pressure on fees. "Coupled with lower starting AuM, we believe our (and consensus) revenue estimates are too optimistic."
GAM stock, which fell by three quarters last year, dropped more than 8 percent in early trading before paring losses to trade down 2.8 percent by 0900 GMT.
The steep decline has made GAM a potential takeover target, and Chief Executive David Jacob told a conference call that GAM's board was examining all strategic options.
The company had said in December it would cut 10 percent of its staff and ditch its dividend as it warned it would slide to a 2018 net loss, which said on Thursday was 929 million francs.
GAM reiterated that it expected underlying profits for the 2019 first half and full year to be materially below last year's levels, hit by the significantly lower investment management AuM and corresponding revenues.
It set aside targets for operating margin and earnings per share growth while it focuses on stabilising the business.
"The operating environment for the asset management industry continues to be challenging, given subdued economic growth, geopolitical tensions and trade disputes, with investors continuing to remain cautious and price sensitive," it said.
"Against that backdrop, and as a result of the issues encountered in the second half of 2018, 2019 will prove a challenging year. Along with normal flow dynamics, the daily flow position has improved in the first weeks of 2019 compared to December 2018, but institutional flows remain unpredictable."
GAM officials declined to give details on asset flows and margins in early 2019.
For 2019 and beyond, GAM aims to pay a dividend of at least half of underlying net profit. It expects to cut fixed personnel and general expenses by at least 40 million francs by the end of 2019 and is examining other potential savings.
$1 = 1.0004 Swiss francs Reporting by Michael Shields Editing by David Goodman