GAM has suspended Tim Haywood, investment director business unit head for the unconstrained/absolute return bond strategy (ARBF), 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. The relevant regulators are being kept informed of the matter.
GAM has not established any material client detriment to date as a result of the issues investigated, although this remains under review.
Jack Flaherty and Alex McKnight, investment directors, have assumed joint responsibility for the ARBF and other associated portfolios. Jack Flaherty has been one of the co-managers of the ARBF strategy for more than six years, while Alex McKnight has been a key 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. Jack Flaherty and Alex McKnight remain supported by 18 other experienced investment professionals, who will continue to manage ARBF portfolios in accordance with the same investment philosophy that has been in place since the strategy’s inception in 2004.
Group CEO Alexander S. Friedman said: “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.”
The total assets in the ARBF portfolios as at 30 June 2018 were CHF11.0bn, with an average management fee margin of 61.9 basis points. Approximately CHF6.2bn of these assets are eligible for performance fees.
In addition to these portfolios, Tim Haywood is a named manager of CHF 2.9bn in trade finance funds (average management fee margin 11.0 basis points) and of CHF 653 million in other fixed income portfolios (average management fee margin 36.6 basis points).