For more than a decade, Tim Haywood and a fellow GAM fund manager were a dream team. finews.com investigates how a high-stakes rupture between the two sparked chaos at the Swiss asset manager.
The suspension of GAM's Tim Haywood eight weeks ago put an end to a 12-year partnership with the fund star’s co-manager.
Haywood (pictured below) and his long-time partner couldn’t have been more different: Haywood was the go-getter and public face of the absolute return line of bond funds. His partner, who joined two years later, was the conservative and cautionary voice, preferring to stay in the background.
Despite often taking opposing views, the two formed the backbone of the heavyweight absolute return bond arm, or ARBF. They were so closely linked with the line for so long that a GAM executive referred to them as «the mother and father» of the business.
Rich Personal Rewards
The ARBF funds reaped rich rewards for GAM as well as for the two: the products made for more than one-quarter of GAM’s 44.1 million Swiss francs ($45.9 million) in performance fees last year. The firm has long pursued a performance-based pay model: fund managers earn cut of the returns they generate.
As recently as March, Haywood and his longtime partner were listed – and pictured – as the management team for many of GAM’s flagship unconstrained bond funds. By mid-year, Haywood was out, ostensibly for breaking rules such as using his personal email for work.
What of his partner, who had worked alongside Haywood since 2006, first for Julius Baer, then briefly for Augustus following a management buyout, and finally for GAM?
Co-Worker Blew Whistle
The Swiss asset manager has been silent, except for a brief mention on the same day the company suddenly suspended Haywood nearly two months ago. Then, GAM said the co-manager doesn't have a hand in the daily running of the ARBF portfolios, and would manage other fixed income products for the company.
As Haywood sits out the results of an internal disciplinary procedure, several sources told finews.asia that the little-known former co-manager set into motion the scandal: Haywood's co-manager blew the whistle after the two long-time partners fell out.
In a statement following finews.asia's story, GAM confirmed that an internal whistleblower had first raised concerns. Haywood and his former co-manager declined to comment to finews.asia.
U.K. Power Securities
According to several sources, Haywood's relationship to the co-manager soured over investments in unlisted securities of GFG Alliance, a company controlled by British-Indian billionaire Sanjeev Gupta.
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