Assets under management at GAM dropped by more than 10 per cent in three months after the firm liquidated the funds run by Tim Haywood.
In a trading statement released covering the three months to the end of September, GAM said assets in its investment management division fell from £65.2bn to £51.6bn while its total assets, which include its outsourcing business, dropped from £126bn to £112bn.
Of this drop, £8.3bn was directly attributable to the funds previously managed by Mr Heywood but GAM also saw £4bn in outflows from its other strategies which it attributed to "challenging market conditions".
Mr Haywood, who managed the absolute return bond fund (ARBF), was suspended by GAM after accusations of inadequate due diligence on some of the absolute return bond fund investments he made.
GAM decided to liquidate those funds after initially closing them to redemptions.
Alexander Friedman, GAM's chief executive, said: "The consequences of the suspension of an ARBF investment director marked a clear setback for GAM. We are taking immediate and near-term measures to support GAM's profitability.
"We have a stable and diversified business that we continue to build upon and we remain fully focused on delivering the investment returns expected by our clients."
GAM's shares, which are listed on the Swiss stock exchange, have fallen in price by more than 16 per cent this morning.
david.thorpe@ft.com
