Swiss asset manager GAM is to restructure its absolute return bond funds, liquidating the majority of assets in the CHF7.3bn (€6.3bn) strategy in the wake of a wave of redemption requests.
The company said in a statement this morning that it expected to begin meeting withdrawal requests from “early September”.
GAM said it expected to realise between 74% and 87% of the assets in its Luxembourg- and Ireland-domiciled UCITS unconstrained and absolute return bond funds.
Between 60% and 66% of a Cayman Islands-based fund and its related Cayman and Australian feeder funds would be realised in early September, it added.
It expected to make another payment to investors later in September and further distributions “in the coming months” as less liquid assets were sold, GAM said.
“GAM’s priority is to maximise value for the fund investors throughout the liquidation process, while ensuring equal and fair treatment to all,” the company’s statement said.
“Because these funds have a mix of mainly liquid assets and some less liquid assets, GAM is focused on ensuring balance between value maximisation with speed of liquidation.”
For investors wishing to remain invested in the strategy, GAM said it would launch a new UCITS fund “in the coming weeks”, while a new Cayman Islands-based fund was also in the pipeline.
Investors have been queuing up to take their money out of the fund range after lead manager Tim Haywood was suspended on 31 July. Dealing in the funds was subsequently halted after a large number of investors attempted to pull out of the strategies.
An internal investigation had identified problems with Haywood’s risk management and record keeping. No other strategies or funds were affected, GAM said.
GAM chief executive Alexander Friedman said: “The suspension and the subsequent decision to liquidate the 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. This does not take away from the fundamental strength of GAM as a diversified asset manager.
“We have spent the past few years restructuring GAM into a more efficient business with a less volatile earnings profile, while continuing to build out high performing, specialist strategies that are relevant for our clients. This has made GAM better positioned to weather a challenging environment, and we believe we will continue to attract clients to our platform and deliver value to our investors in the years to come.”