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GAM suspends trading in €6.3bn bond funds following probe

Trading screenZurich-based asset manager GAM has halted trading in its unconstrained and absolute return bond funds following a steep rise in redemption requests after one of its London-based fund managers was suspended earlier this week.

Clients started pulling their money out of nine funds, valued at 7.3 billion Swiss francs (€6.3 billion), on Tuesday following the suspension of Tim Haywood after an internal investigation revealed shortcomings in record keeping and risk management procedures .

In a statement released today, the company said: “Although the funds have the necessary liquidity to serve these requests, such actions would lead to a disproportional shift in their portfolio composition, which could compromise the interests of remaining investors.”

“GAM is committed to ensuring equal treatment of all investors and protection of their interests. The company is actively engaging with clients and is focused on resolving the situation as quickly as possible for investors.”

The firm added that no other part of its business is affected and that it will not charge any management fees on the effected funds “while they remain suspended or if they go into liquidation”.

Group chief executive Alexander Friedman said: "We are fully committed to safeguarding the interests of our clients.”

GAM had total assets under management of 163.8 billion Swiss francs (€142 billion) as of June 30, 2018.

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