Fund Management
GAM Wins Clearance To Start Liquidating Suspended Funds

The firm shut certain funds after a senior manager was suspended and now it has won the green light to start liquidating them.
GAM Investments has has won clearance to start liquidating its
unconstrained/absolute return bond funds that have been closed to
inflows and redemptions after the suspension of a senior
manager.
"All fund investors will receive their proportionate interest in
cash from the liquidation process," the firm said in a statement
today. GAM Investments is part of Zurich-listed GAM Holding.
Each fund expects to be able to make the first payments in early
September, returning between 74 per cent and 87 per cent of the
Luxembourg and Irish-domiciled UCITS funds, and between 60 per
cent and 66 per cent of the assets in the Cayman master fund and
the associated Cayman and Australian feeder funds, it said.
The closure and liquidation move has been a blow to GAM. GAM has
suspended the unit head of its unconstrained/absolute return bond
strategy, Tim Haywood. GAM said it acted because “some of his
risk management procedures and his record keeping in certain
instances” fell short of requirements. The firm said that it had
not found that its clients had been hit by the actions, but it
was continuing to probe the matter. "The investigation has not
raised concerns about his [Haywood's] honesty," it said at the
time. As a result of Haywood's suspension, the funds were hit by
redemption requests, prompting it to impose a suspension on
dealings.
Explaining its approach to liquidation, GAM said it wanted to
maximise value for the fund investors throughout the liquidation
process, while ensuring "equal and fair treatment to all".
The company expects to make a further distribution for each fund
before the end of September, and continue distributions in the
coming months, dependent on market conditions, it said.
GAM also expects to offer alternative structures for investors
who want to remain invested with the ARBF team. A UCITS fund is
expected to be available for investors in the coming weeks, and
the company is setting up a new Cayman fund as well.
"The suspension and the subsequent decision to liquidate the ARBF
funds has been a difficult process, but necessary to ensure that
we deliver on our principles of acting in the best interests of
all fund investors and treating them equally and fairly. This
does not take away from the fundamental strength of GAM as a
diversified asset manager," group chief executive Alexander S
Friedman said.
"We have spent the past few years restructuring GAM into a more
efficient business with a less volatile earnings profile, while
continuing to build out high performing, specialist strategies
that are relevant for our clients. This has made GAM better
positioned to weather a challenging environment, and we believe
we will continue to attract clients to our platform and deliver
value to our investors in the years to come," he added.