Swiss asset manager GAM is to liquidate nine unconstrained/absolute return bond funds, following the suspension last month of the investment director who ran them.
GAM suspended trading in its unconstrained and absolute return bond funds at the start of August, after a high level of redemption requests.
In a letter posted on its website on Friday, GAM says nine funds will now be liquidated.
The funds are:
- GAM Absolute Return Bond
- GAM Absolute Return Bond Defender
- GAM Absolute Return Bond Plus
- GAM Star Absolute Return Bond
- GAM Star Absolute Return Bond Defender
- GAM Star Absolute Return Plus
- GAM Star Dynamic Global Bond
- GAM Absolute Return Bond Master Fund
- GAM Unconstrained Bond Fund
GAM investment director and business unit head for the unconstrained/absolute return bond strategy Tim Haywood was suspended in July after an internal investigation uncovered issues with his risk management procedures and record keeping.
GAM said the investigation did not raise concerns about Hayward’s honesty.
A separate letter to investors on the GAM website says the investigation found Hayward may not have carried out proper due diligence on some investments, had potentially breached the company’s policy around signatures, and used his personal email for work purposes.
It also says he breached the company’s gifts and entertainment policy by not asking for pre-approval.
In the letter regarding the liquidation of the funds, GAM sales and distribution group head Tim Rainsford says: “We believe that the liquidation approach will allow investors the opportunity to receive proceeds in a more timely manner and ensure equal treatment.”
The letter says: “It is expected that all fund shareholders would periodically receive their proportionate interest in cash as it becomes available throughout the liquidation process. GAM is working with each of the fund boards to maximise liquidity and value for investors.”