Bond issuer wined and dined ousted Gam manager Tim Haywood

Manager was deemed in breach of gifts and entertainment policy

Sacked Gam manager Tim Haywood purchased vast quantities of illiquid securities for his multi-billion-pound absolute return bond range around the time he was being wined and dined by the issuer, an Australian financier.

Lex Greensill, who owned a supply chain finance business, flew Haywood on his private jet on several occasions for business and leisure and treated him to lavish meals, as well as a classical concert at Buckingham Palace, according to a report by the Financial Times.

Gam had previously flagged Haywood may have been in breach of the company’s gift and entertainment policy after revealing it was conducting an internal investigation into his conduct last summer.

It also raised concerns about his due diligence and record keeping “in certain instances” and that he may have broken the firm’s signatory policy by signing contracts alone where two signatures were required.

In a written statement to Portfolio Adviser, Haywood said: “Gam have ruled that I was in breach of the gifts and entertainment policy. Gam are also now investigating sales staff to see if they are or were in breach of the latest policy over the last few years. That investigation may be extended to all Gam UK staff.”

However, Haywood said Gam has dropped the allegation that additional signatures were required on the paperwork under consideration. He said “an expert from IHS Market” had confirmed that certain embedded terms of the bonds, similar to put options, could not be inputted directly into the record keeping system. “I was therefore not negligent as has been alleged,” he said.

Haywood’s suspension and the subsequent liquidation of his £8.5bn absolute return bond fund (ARBF) range has plunged the Swiss asset manager into the throes of an existential crisis and seen assets at the firm fall by a third. In February, Haywood was sacked by Gam for “gross misconduct” a decision which he has said he will contest.

Greensill introduced Haywood to one of the UK’s biggest industrialists Sanjeev Gupta in 2017.

The trio were described as having found the perfect symbiotic relationship – Gupta found a source of financing for a string of infrastructure projects, Haywood found a place to park his capital in higher-yielding investments and Greensill provided the deals.

Over time Haywood’s ARBF funds were filled with hundreds of millions of pounds’ worth of bonds linked to Gupta projects, plus other bonds used to finance other projects arranged by Greensill.

Nearly 12% of the total assets in his Luxembourg-registered fund were in Greensill-related paper a month before he was suspended, according to the FT.

Haywood’s purchases of illiquid bonds and close relationship with Greensill and Gupta raised concerns back at Gam headquarters, including Haywood’s co-manager on the ARBF range Daniel Sheard, who initiated an internal probe into Haywood’s behaviour.

In a statement, Haywood said he was being “unjustly singled out” by Gam and looks forward to clearing his name and returning to work.

“The allegations that remain do not constitute gross misconduct even if they were all true, which they aren’t,” he said.

Gam declined to comment for this story.

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