Swiss asset manager GAM has set out plans to pay back investors up to 87 per cent of assets invested in funds it is liquidating following the suspension of its fund managers.
The decision to liquidate nine unconstrained/absolute return bond funds followed the suspension of fund manager Tim Haywood and a high level of redemption requests from investors.
In a statement today, GAM says all investors will receive their proportionate interest in cash from the liquidation process with first payments expected in early September.
The payments will return 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.
Furthermore, the company says it expects to make a further distribution for each fund before the end of September, and then continue distributions in the coming months, dependent on market conditions.
GAM says that by liquidating funds, it is seeking to “maximise value for the fund investors, while ensuring equal and fair treatment to all”.
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GAM group chief executive Alexander Friedman says: “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.”
Haywood faced internal investigation into his risk management procedures and record keeping.
While the investigation process has not raised concerns about Haywood’s honesty, it found he might have failed to carry out proper due diligence on some investments and to comply with company’s policies regarding signatures and the use of personal email.
GAM also expects to offer alternative structures for investors who want to remain invested with the ARBF team. GAM expects UCITS fund to be available for investors in the coming weeks, and says that it is setting up a new Cayman fund as well.