Fund Returns Down
Haywood, who remains in GAM's employ, hasn't spoken publicly about the events leading up to his suspension and couldn't be reached by finews.com. GAM CEO Alex Friedman said the performance of absolute return bond funds had been slightly down so far this year. This isn't shocking: U.K. asset managers St. James's Place and Man also noted weakness in their respective absolute return bond arms in the first six months.
Under Haywood, GAM's absolute return funds likely overreached into more esoteric products that cannot be sold to raise cash, suggested Murray Gun (pictured below), a technical analyst with Elliott Wave. «That would not be a surprise given the frantic rush for yield over the last few years», Gunn noted.
The collapse of GAM's funds may be a warning sign of credit illiquidity on par with the implosion of two Bear Stearns credit funds which is widely viewed as the first sign of the financial crisis of 2008/09, Gunn said.
«We wonder whether the world will look back on this week as having been a similar warning sign», Gunn said.
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