Fund Management

GAM Nears Final Chapter For Scandal-Hit Bond Fund

Tom Burroughes Group Editor 16 July 2019

GAM Nears Final Chapter For Scandal-Hit Bond Fund

GAM Holding confirmed that it is in the process of settling the sale of the Absolute Return Bond Funds.

Zurich-listed GAM Holding, which is battling to restore its fortunes after a mass exodus from a bond fund hit after the removal of its manager, is close to completing the end of that business, the firm confirmed yesterday.

There has been widespread media commentary over GAM's approaching wind-down of its Absolute Return Bond Fund, which at one point was managed by Tim Haywood. Last year, Haywood was suspended and later dismissed by the firm for misconduct.

"GAM can confirm that it is in the process of settling the sale of the remaining assets within its unconstrained/absolute return bond funds (ARBF), in line with the agreement announced on 17 April 2019," the firm said in a statement.

Reports have said that GAM is going to repay a premium to investors of 50 basis points on their holdings in the ARBF - worth more than $7 billion (source: Bloomberg, 15 July) .

As mentioned in the reports, the wind-down of the ARBF portfolios may result in the sale of GAM, which has seen its share price hammered by the Haywood affair. The saga highlights how rapidly a listed fund management business can be hit by the woes of a flagship fund or set of funds. Last year, former GAM Holding chief executive Alex Friedman, who had been a senior figure at UBS, resigned.

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