Chief executive departs troubled GAM Holdings
Alexander Friedman will be replaced by board member David Jacob temporarily
GAM Holdings’s chief executive has left the firm after a turbulent three months during which the Swiss money manager’s share price plummeted and investors yanked billions from its funds following the suspension of a star fund manager.
Alexander Friedman will be replaced by board member David Jacob on a temporary basis while the search for a new boss takes place.
Shares rose more than 6% in early trade Tuesday before quickly giving up most of those gains after GAM said Mr. Friedman would step down immediately. GAM shares are down 61% this year.
The initial challenge for Mr. Jacobs will be to stabilize a company continuing to suffer investor withdrawals and stock price erosion since it announced the suspension in July of bond manager Tim Haywood as part of an investigation into his con- duct. Investors have pulled more than 20% of assets from its funds since the suspension.
GAM is exploring options to maximize shareholder value, including the sale of all or part of its business. Shares rose in October following reports that the company has held early stage talks with potential buyers. GAM Chairman Hugh ScottBarrett said the company faced important decisions as it looked to recover from the turmoil.
“Alex and the board of directors jointly agreed that new leadership will better enable us to take the action necessary to support profitability and drive forward the group’s strategy,” he said.
GAM said in an earlier letter to investors that it took action after Mr. Haywood breached the firm’s gifts and entertainment policy. He may also have failed to carry out due diligence on investments and used his personal email for work purposes.