GAM's share price has nosedived by 20% after it suspended its absolute return strategy boss Timothy Haywood, who oversees £8.5 billion, following an internal investigation into his risk management and record keeping this morning.
In a statement that coincided with a results update for the group, the Swiss asset manager said the investigation into Haywood has not raised concerns regarding his honesty.
GAM has not established any detrimental impact on client assets, but this remains under review.
Daniel Sheard, who had co-run the absolute return strategies, is now not involved in the day-to-day running of the fund and continues to run other fixed income portfolios.
GAM's share pric was down 20.51%, or CHF 2.35, at CHF 9.12 at 12:30pm.
GAM said absolute return remains a core part of its business and it will be recruiting additional portfolio managers in light of increased global demand for such products.
The total assets in the absolute return portfolios CHF 11 billion (£8.5 billion). Haywood was a named portfolio manager on CHF 2.9 billion in trade finance funds and CHF 63 million in other portfolios.
In August 2016, GAM singled out Haywood’s strategies as being under increased pressure, with outflows having a knock-on effect for the company’s fall in assets under management. At that time it had sat at CHF 19.2 billion.
Funds in focus
In terms of performance, across the five strategies Haywood was assigned to, he had a loss of 1.84% on a three-year basis against a 0.03% return by the average manager in the Alternative Ucits – Bond Strategies sector.