GAM has decided to liquidate suspended unconstrained and absolute return bond funds with £5.6bn in AUM, on the back of high levels of redemption requests following the suspension of manager Tim Haywood.
Haywood, who is the business unit head for GAM's CHF 11bn (£8.5bn) AUM unconstrained/absolute return bond strategy (ARBF), was suspended on 31 July following an internal investigation into issues relating to his risk management procedures and record keeping, although the asset manager stressed there were not concerns regarding his honesty.
GAM then suspended trading in unconstrained and absolute return bond funds (ARBF) with £5.6bn in AUM last week as a result of the high level of redemption requests following Haywood's suspension.
The group has now written to investors to say the respective fund boards of directors have decided to place the suspended funds into liquidation, subject to any applicable regulatory and fund shareholder approvals and any relevant fund rules.
The funds affected 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 said it believes liquidation "will allow investors the opportunity to receive proceeds in a more timely manner and ensure equal treatment".
"It is expected that all fund shareholders would periodically receive their proportionate interest in cash as it becomes available throughout the liquidation process. GAM is working with each of the fund boards to maximise liquidity and value for investors," the group added.
It is also working on establishing alternative structures for fund shareholders who want to remain invested with the ARBF team.
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