Gam warns profits have been wiped as ARBF liquidation winds up

Swiss fund giant expects £11m net losses in H1

Gam Investments has warned markets its H1 profits have been wiped out as the 11-month liquidation of its absolute return bond fund winds up.

The Swiss asset manager is due to publish its half year results on 30 July but said, in line with exchange rules, it was providing an update on the fact results were due to be “materially lower” than the same period in 2018.

Gam expects net losses totalling CHF14m (£11.3m) in H1 2019 compared to profits of CHF25.4m in the same period last year, the filing published on Wednesday said.

Underlying profit before taxes is due to fall 98% to CHF2m compared to CHF 91.3m in H1 2018.

Falling assets had driven the hit to profits with the fund house now managing CHF52bn compared to CHF84.4bn in 30 June 2018. The ARBF range, managed by London-based Tim Haywood (pictured), had held £8.5bn (CHF10.5bn) before it suspended. Gam announced it was liquidating the nine funds in August 2018.

Haywood was denied entry to the asset manager’s annual general meeting in Zurich in May. Haywood was suspended from the firm in July 2018 as Gam investigated his risk management procedures and record keeping and was sacked in February 2019.

Absolute return bond fund update

The fund house is due to sell the remaining assets in the ARBF range within five days, the update said.

The end date for the wind of the fund range had already been flagged in April, when it was revealed that steel magnate Sanjeev Gupta agreed to acquire all outstanding notes by mid July. More than three-quarters of assets had been returned from the Luxembourg-domciled funds within six weeks of the liquidation starting.

At that point, Gam’s self-imposed liquidation target of 31 March had already been missed due to difficulties selling down the more illiquid assets in the portfolios, including notes related to Gupta projects.

The previous month Gam had accused Haywood of breaching its gifts and entertainment policy for being wined and dined by the UK-based entrepreneur, who he was also purchasing illiquid securities from.

Tags: | |

Leave a Reply