Investments 

GAM completes sale of assets in stricken bond funds

GAM completes sale of assets in stricken bond funds

GAM has completed the sales of the assets it held in the absolute return bond funds it had closed due to a wave of outflows.

The range of nine bond funds was suspended on August 2018 following the suspension of fund manager Tim Haywood, with GAM concerned about the level of due diligence and record keeping on the funds. 

Mr Haywood subsequently left his employment at GAM.

There was particular concern about the funds' exposure to illiquid assets and the level of due diligence performed on those bonds prior to the investments being made. 

GAM initially froze redemptions on the £7.3bn fund range, meaning investors were unable to access their cash.  

But the decision was subsequently taken to close the funds, sell the assets and return the cash to investors. 

This morning (July 16) GAM confirmed it has completed the sale of all of the bonds in the funds, raising 100.5 per cent of the value of the assets at the time the funds were closed. 

More than 100 percent of the value can be achieved if the value of the underlying assets has risen since the sale process began. 

Some GAM clients have received cash in recent months as assets were sold off, and the company expects to make the final payments to clients by the end of July. 

David Jacob, group chief executive of GAM said: "We are very pleased that we will be making the final payment to our ARBF investors over the coming weeks.

"We would like to thank all our clients for their continued patience during the liquidation process.

"We are fully focused on further stabilising the business for future growth, executing our restructuring programme and delivering value for our clients and shareholders.

"With our distinctive set of investment strategies and a global distribution network, we believe we are well placed to help our clients find attractive returns."

The funds liquidated are GAM Absolute Return Bond, GAM Absolute Return Bond Defender, GAM Absolute Return Bond Plus, GAM Star Absolute Return Bond, GAM Star Absolute Return Bond Defender, GAM Star Absolute Return Plus, GAM Star Dynamic Global Bond, GAM Absolute Return Bond Master Fund, GAM Unconstrained Bond Fund.

GAM shares fell sharply and the company chief executive left the firm in the immediate aftermath of the funds being closed. 

The shares have fallen from £9.05 to £3.58 in the year to today.

david.thorpe@ft.com