George Soros builds 3% stake in troubled GAM

The stake, reported through a filing to the Swiss stock exchange on Friday, was bought by SFM UK Management LLP, a subsidiary of Soros Fund Management.

Soros is not the first investor to snap up a significant stake in GAM, with Mario Gabelli's New York-listed firm Gamco building up a similar-sized position towards the end of 2018.

Friday's rally in the stock to CHF4.70, a level not seen since early December, stemmed losses since early 2018 that have totalled three-quarters of the Zurich-listed firm's market capitalisation.

Its troubles stemmed from the suspension of bond fund manager Tim Haywood in July following an internal investigation into issues relating to risk management procedures and record keeping.

The episode claimed the scalp of chief executive Alexander Friedman, who quit in November, while other managers, including Asian equity manager Michael Lai who had been with the firm for over 20 years, have also left the company.

Elsewhere, GAM has seen significant outflows, reported two profit warnings and come under fire in recent months from influential proxy adviser Institutional Shareholder Services over its remuneration policies.

Its dramatic fall from grace has seen its five largest shareholders, which together own over a third of the business, lose a total of CHF835 billion.

This article was first published by Investment Week, a sister title of International Investment. 

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