GAM Suspends Investment Director Tim Haywood

Firm says issues relate to risk management procedures, record keeping.

Swiss asset management firm GAM has suspended one of its top portfolio managers after an internal investigation raised issues of his risk management procedures and record keeping.

The company said it suspended London-based Tim Haywood, the business unit head for its absolute return bond fund, over the issues; however, it also said the investigation hadn’t raised concerns over Haywood’s honesty, nor had it established any material client detriment as a result of the issues. However, it added that the latter is still under review.

GAM didn’t specify the risk management or record keeping issues involved, nor did it say what initiated the investigation. It also didn’t say how long Haywood would be suspended.

In Haywood’s absence, investment directors Jack Flaherty and Alex McKnight have assumed joint responsibility for the absolute return bond fund and other associated portfolios. Flaherty has been one of the co-managers of the fund for more than six years, while Alex McKnight has been a senior member of the team for the past 11 years, according to GAM.

The total assets in the absolute return bond portfolios as of the end of June were CHF11 billion ($11.1 billion). Haywood is also a named manager of CHF2.9 billion in trade finance funds, and of CHF653 million in other fixed-income portfolios.

“Having conducted the investigation with external counsel, we now intend to follow our usual internal processes and will take any further action that may be appropriate,” Group CEO Alexander Friedman said in a release.

The news of Haywood’s suspension sent the company’s shares down as much as 20% and overshadowed its recent announcement that it has been granted registration as a discretionary investment management and investment advisory and agency business by the Financial Services Agency in Japan.

 The approval permits GAM to directly engage with institutions in Japan, such as pension funds, for the purpose of managing their assets through a discretionary investment management plan. The company has had an office in Tokyo since 1997, and already holds a securities license that permits direct marketing of its funds in Japan.

Last year, the firm lured Shizu Kishimoto away from Schroder Investment Management Japan to lead its sales and oversee business operations in the country.

 “Being granted this license by the regulator is an important milestone for us,” Kishimoto said in a release. “We look forward to engaging directly with institutions, including pension funds.”

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