Published by Investment Week – 12th Dec 2018
New CEO looking to restructure divisions
Embattled Swiss fund manager GAM is set to cut a number of jobs as interim CEO David Jacob looks to restructure the firm’s equity and bond divisions just one month after taking on the role.
According to Swiss news agency AWP, GAM will cut 18 fund manager positions, 14 in Zurich and four in London, as the firm looks to find ways to cope with recent damaging events.
GAM confirmed the resturcturing of the investment teams to Investment Week, but declined to comment on the total number leaving the business.
The news comes after it was revealed last month GAM was set to cut around 10% of its 188 investment staff.
In an memo to staff, Jacob said: “By consolidating some teams we will be better able to deliver scalable products to our clients worldwide. This will mean that a number of current investment roles will become redundant.”
Jacob was appointed interim CEO of the firm last month, after previous chief executive Alexander Friedman stepped down after four years at the helm.
It was reported in early August the chief executive was facing shareholder pressure to step down following a series of crises at the firm since he took over in 2014.
During his tenure, the group has overseen a profits warning caused by an unsuccessful acquisition, a faltering share price and, most recently, from the suspension of Tim Haywood.
Haywood was suspended following whistleblowing claims of issues relating to his risk management procedures and record keeping.
GAM subsequently liquidated the £8.5bn absolute return bond strategy on the back of high levels of redemption requests.
In a regulatory filing on 21 November, the firm said Mario Gabelli, the majority owner of Gamco, a $43bn New York-listed value focused investment manager, had built a 3% stake in the business; BlackRock also own just over 3%.
Since the beginning of the year, GAM’s share price has plummeted by over 70% to trade at CHF4.54 amid the ongoing issues.
According to the Financial Times, the remaining staff members will be incentivised to remain in their job by being offered deferred payments that pay out over the next two to three years.
As part of the restructure, the firm plans to bring together fixed income teams from London, Zurich and New York teams to focus on four key areas — emerging markets, global credit, structured credit and global strategic bonds, which will incorporate the old total return bond strategies. European equities will also be consolidated into a single team.
Jacob said: “I am fully aware that this is difficult for the organisation, and particularly so for colleagues who are directly affected by these changes, but we have to ensure that we have an efficient business with a clear and compelling investment proposition for our clients.”
