GAM’S ASSETS FALL 20PC AFTER STAR MANAGER’S SUSPENSION

Firm has lost more than half its market value this year

GAM Holding AG’s assets tumbled by a fifth in its main investment management business as star manager Tim Haywood’s suspension sent investors fleeing across funds, underscoring the challenges for the Swiss money manager as it struggles to sta- bilise the firm.

The third-quarter numbers provide the first comprehensive account of the fallout at GAM, which yesterday reiterated that it was exploring options to maximise shareholder value.

Assets in investment management fell 21 per cent from the end of June to 66.8 billion Swiss francs (RM278.81 billion). The company has lost more than half its market value this year, prompting it to review spending and investment.

“The consequences of the suspension of an ARBF investment director marked a clear setback for GAM,” said chief executive officer Alex Friedman. “We are taking immediate measures to support GAM’s profitability.”

The asset manager, spun off from Julius Baer Ltd in 2009, is fighting to retain clients and contain the damage from the suspension of bond manager Haywood over allegations of lapses in risk management and record keeping.

The company had held informal talks with potential buyers for all or part of the business as it explored options to stabilise the firm, said sources.

Haywood’s suspension couldn’t have come at a worse time for the money manager, which is already being buffeted by headwinds in the asset management industry. Volatile returns and an investor flight to low-fee products have squeezed profits, forcing many money managers to consolidate.

GAM said outflows slowed this month, though it warned that the “more challenging market conditions” since the second quarter would continue through the end of the year.