A computerized trading unit snapped up by GAM two years ago reportedly faces heavy losses. The downbeat news adds to the asset manager's wider fight.
Cantab is down 31.4 percent this year, according to «Financial News» (behind paywall), which cites hedge fund data from investment bank HSBC.
The systematic trading unit's flagship fund fell by more than 6 percent last month alone, the trade publication reported. A spokeswoman for GAM declined to comment.
A Puzzle Piece
GAM bought the business for $217 million two years ago, but the troubled asset manager was forced to take a $59 million hit against its first-half results after expectations for the deal failed to materialize.
The unit, co-run by GAM executive Anthony Lawler and ex-Cantab CEO Adam Glinsman. Cantab is a puzzle piece in the bigger picture at GAM, where a fund manager falling-out in July has mushroomed into a crisis of existence.
Talent Scramble
The Swiss firm is believed to be scrambling to keep talent from fleeing as it attempts a recovery. GAM reportedly fielded – and rebuffed – inquiries from rival asset manager Schroders for Cantab. GAM banked on the systematic trading unit as a pillar of growth when the company slashed spending and looked for new ways to make money.
The unit's problems come against the wider hedge fund industry struggle for returns in fixed income and commodities this year, according to «Financial News». So-called momentum investments are foundering, as value stocks climb amid rising U.S. interest rates and the retreat from generous monetary policy.
