GAM Holding's big share price fall is attracting bargain-hunters who think the stock can only go higher from here.

Embattled investment house GAM Holding, which has suffered heavy outflows and the resignation of its chief executive after the suspension of a senior manager, is attracting bargain-hunters for its shares, a report said.

Shares in GAM, which is listed in Zurich and which does business in a number of countries, have plunged from SFr16.21 at the start of this year to close yesterday at SFr6.0 per share - down by more than 60 per cent.

But according to a Bloomberg report, one of the most influential US bargain hunters is interested in GAM, thinking that the share price can only start to go higher.

Mario Gabelli, the billionaire head of Gamco Investors known for his frequent TV interviews and stock-picking talent, has acquired a stake of around 3 per cent in GAM, according to a filing cited by the newswire. That stake means he is the seventh-biggest shareholder.

The report added that GAM is consolidating some fixed income and equity teams and cutting jobs. The changes were announced by interim CEO David Jacob in an internal memo obtained by the news service. Cuts affect up to 20 investment professionals. GAM reportedly declined to comment on that figure.

Earlier in November CEO Alexander Friedman announced he was stepping down. Investors have pulled billions out of its Absolute Return Bond fund range after the unit’s manager, Tim Haywood, was suspended. GAM launched an investigation in the summer into Haywood's conduct after concerns about his activity were flagged by an internal whistleblower. At the time of Haywood’s suspension in late July, GAM said that it acted because “some of his risk management procedures and his record keeping in certain instances” fell short of requirements. GAM had not found that its clients had been hit by the actions, but it was continuing to probe the matter.

As well as showing how corporate governance and related issues can dramatically affect inflows and outflows, the story also highlights the vulnerability of listed asset managers to heavy portfolio liquidations.

The departure of Friedman was a setback to what had been until then a stellar career. He took on the GAM job four years ago after leaving UBS. At that Swiss bank, Friedman, a US citizen, was global chief investment officer of UBS Wealth Management and Wealth Management Americas. Before that, he was the chief financial officer of the Bill & Melinda Gates Foundation, a senior advisor to Lazard, and a member of the supervisory board of private equity firm Actis. He was a White House fellow in the Clinton administration and an assistant to the US Secretary of Defense. He is a board member of several non-profit organisations and a member of the Council on Foreign Relations.