Ten months after a scandal surrounding star fund manager Tim Haywood surfaced, battered asset manager GAM buried the fund by returning funds to investors.
GAM wrapped up the sale of its absolute return bond fund, it said in a statement. The Swiss-based asset manager will repay investors between 99.7 percent and 101.5 percent of their money held in the bond fund, until last year a flagship product.
The move seeks to draw a line under a nearly two-year-long scandal over the fund following the fallout of its two co-managers. One of them turned whistleblower, as finews.com reported exclusively, which ignited a wider crisis at GAM, a pioneer in fund-of-hedge-funds founded by Gilbert de Botton in 1983.
Seeking Stabilization
The scandal has lopped nearly two-thirds off GAM's market capitalization as an emergency manager seeks to rescue the company. Measures include massive job cuts and scrapping shareholder payouts after a full-year loss. CEO Alex Friedman and other top executives left last year as the crisis mushroomed.
«We are fully focused on further stabilizing the business for future growth, executing our restructuring program and delivering value for our clients and shareholders,» David Jacob, the emergency manager, said in a statement.
«With our distinctive set of investment strategies and a global distribution network, we believe we are well placed to help our clients find attractive returns.»
Fund Quietly Revived
Clients of GAM, which quietly revived the absolute return fixed income product recently in another form, will receive their money back from the original fund by month-end. Both Tim Haywood (pictured below) and his co-manager at the absolute return bond fund who blew the whistle have been let go by GAM.
A big chunk of the fund's assets – outstanding power purchase receivables notes which sparked a fallout between the two fund managers of the portfolio, was bought back by GFG Alliance, which is controlled by British billionaire Sanjeev Gupta. GAM fund managers Jack Flaherty and Alex McKnight were tasked with the unwinding; McKnight will now manage the new bond fund.
