GAM's new boss is tapping a former associate from Blackrock as the troubled Swiss asset manager's operating chief.
The Zurich-based company is hiring Steve Rafferty as operating chief, effective immediately, it said in a statement on Tuesday. Rafferty was until May the operating chief of fixed income for U.S. giant Blackrock.
GAM's new CEO Peter Sanderson, also a long-time Blackrock executive, is seeking to revive the Swiss asset manager's fortunes after a whistleblowing scandal spiraled into a wider crisis. A pioneer in fund-of-hedge funds, GAM shut down a troubled bond fund at the center of the scandal. Since then, GAM scrapped its dividend amid a net loss and began slashing spending in a recovery bid.
Burying Bond Scandal
Four months ago, GAM made peace with Tim Haywood, the star fund manager it sacked in February. It lost 1.1 billion Swiss francs ($1.1 billion) in its debt fund arm in the third quarter, leading Sanderson to flag more cost cuts.
«Reducing complexity, as well as strengthening our core business and improving profitability, are fundamental to the future of GAM,» Sanderson said. Rafferty's track record in making such improvements would help GAM's turnaround efforts.
Suitors Circle GAM
GAM dove for cover when it was briefly linked with a short-selling scandal in August – a sign it remains spooked by the 19-month-long bond scandal. The company has suffered a series of high-profile exits, including that of top economist Larry Hatheway three months ago.
While Sanderson wants to get the asset manager back on track, it is an open industry secret that GAM hired Citigroup last year as its M&A advisor. Since then, Britain's Schroders, Swiss bank UBS, U.S. fund house Columbia Threadneedle, and most recently Italian insurer Generali have surfaced as potential suitors.
