Swiss asset manager GAM suspended one of its top portfolio managers today following an internal probe into his handling of a bond strategy worth £8.5bn.
Tim Haywood, investment director business unit head for the unconstrained/absolute return bond strategy (“ARBF”), has been suspended following an internal investigation. The issues relate to some of his risk management procedures and his record keeping in certain instances. The investigation has not raised concerns regarding his honesty. Regulators are being kept informed of the matter.
GAM said it has not established any material client detriment to date as a result of the issues investigated, although this remains under review.
The company’s shares plunged by more than one fifth on the news.
Jack Flaherty and Alex McKnight, investment directors, have assumed joint responsibility for the ARBF and other associated portfolios. Flaherty has been one of the co-managers of the ARBF strategy for more than six years, while McKnight has been a member of the ARBF team for the past 11 years. Daniel Sheard, a co-manager of the ARBF strategy, is not involved in the day-to-day management of the ARBF portfolios, but continues to manage other fixed income portfolios.
GAM is committed to maintaining the strength of the team and is recruiting additional portfolio managers in light of the strong client interest in this product globally.
Group CEO Alexander S. Friedman said in a statement: “We take our responsibilities and controls very seriously. Having conducted the investigation with external counsel, we now intend to follow our usual internal processes and will take any further action that may be appropriate.
“GAM is a leader in the absolute return bond category, and has been for many years. We are fully committed to remaining so. We have a strong and broad team in place, with real depth of talent and a long and successful track record. I am confident that the team will continue to deliver value for our clients.”