One year ago, a whistleblower raised alarm about bond fund manager Tim Haywood. As the Swiss asset manager struggles find a way out of crisis, the bond star is still in the dark about his fate.
The scandal surrounding GAM bond fund veteran Tim Haywood is more than a year old: an internal whistleblower first came forward last November. The prominent British fund manager was suspended four months ago for infractions including using his personal email for work.
Haywood was suspended after his long-time co-manager blew the whistle, as finews.com revealed in September. One year on, nothing much has happened: he remains neither accused of nor disciplined for anything.
GAM Dragging Feet?
So what happens now? Two months ago, GAM said its investigation into Haywood was largely finished, and the company would go about disciplining him – which hasn’t happened. Is GAM, embarrassed that it failed to find any grievous wrong-doing by Haywood, dragging its feet?
«The internal investigation is largely completed and the disciplinary process is still ongoing,» a GAM spokesman said. «Therefore it would be inappropriate to comment further pending its completion.»
Whatever the reason for failing to draw a line under the probe, the delay effectively robs both the whistleblower and Haywood the ability to move on, as GAM struggles to save itself.
High-Level Exits
Both Haywood, who has long specialized in absolute return strategies, and his former absolute return bond fund partner are listed on GAM’s website simply as investment directors. Oddly, the two are shielded from the immediate fallout from the scandal: the whistleblower enjoys robust regulatory protection, while Haywood has not been disciplined, much less let go.
Meanwhile, GAM CEO Alex Friedman has exited, and top regulatory watchdog Natalie Baylis fled three months into the job, and the asset manager is fighting to keep its other star fund managers on board, reportedly with lucrative incentives. Temporarily led by director David Jacob, GAM is also in an extraordinarily fragile state as potential acquirers circle, and needs to fend off suitors looking to pick off bits and pieces, as finews.com reported earlier this month.
Absolute Return Dismantled
Jacob has effectively dismantled the absolute return bond fund business that the two fund managers once ran, folding it into a wider bond offering, as finews.com revealed on Tuesday. The company has moved to cut jobs even as Haywood and the whistleblower remain in their jobs.
Haywood’s listing in the U.K. Financial Conduct Authority's register has been «inactive» since he was suspended in July, while his former co-manager is still listed as a senior manager. Haywood didn’t comment to finews.com.
Nearly all the absolute return bond funds have been liquidated, a source familiar with the situation told finews.com. The asset manager this week told clients in Luxembourg funds that it is returning between 89 and 92 percent of their money (in August, GAM pledged to pay back between 74 and 87 percent), and flagged further returns in coming months depending on market conditions for liquidating. A spokesman said GAM plans the same for its Ireland-based funds.
