Swiss Group GAM has announced a truce with former star manager Tim Haywood, stating it aims to draw a line under the saga which has seen investors pull out billions from the firm after allegations of misconduct came to light in 2018.
The crisis-stricken fund manager has also named former BlackRock employee Peter Sanderson as chief executive following an eight month search during which David Jacob has been acting as interim head. Sanderson will take up the post in September this year.
His hiring is an attempt to put the firm back on a growth trajectory, according to GAM.
Jacob has been appointed as chairman of the board, succeeding Hugh Scott-Barrett who will remain a member of the board until the next annual general meeting.
According to Scott-Barrett, the leadership changes will allow the firm to focus on the future after months of ongoing troubles.
GAM’s woes began last year when it emerged that Haywood, who managed the firm’s absolute return bond funds (ARBFs), may have been in breach of internal policies regarding record keeping.
Haywood was subsequently sacked for “gross misconduct” following an investigation.
At the time, Jacob said the inquiry revealed “serious failure to achieve the standard of skill and care which were to be expected of someone in his position”. The firm finalised liquidation of the ARBFs connected to Haywood this week.
“With the final ARBF payments being made to our clients today (Tuesday, July 30), we intend to put this issue behind us and are now fully focused on the future growth of the business,” Jacob said.
The Zurich-based business has reached an agreement with Haywood that “neither party will pursue the other based on current facts”. According to Jacob, further stabilising the business and rebuilding client trust will allow GAM to get back on track.
A spokesperson for Haywood said that he would not be proceeding with the employment tribunal case due to legal costs, but still holds firm that he was dismissed unfairly.
The firm announced a change in its fortunes during June and July, which both saw positive flows. Its overall results for the first half of 2019, however, saw net outflows of 7.4 billion Swiss francs (€6.7 billion).
Its underlying profits before taxes were up from the same period last year, with 2.1 million francs compared to around half a million francs.
Incoming chief executive Sanderson served at US fund giant BlackRock for over ten years in roles such as regional head of financial services consulting and co-head of regional multi-asset investment solutions.
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