How Easy Is it to Unwind $7 Billion of Investments?
Swiss money manager GAM could be about to find out.
GAM’s CEO in the hot seat.
Photographer: Jason Alden/BloombergGAM Holding AG should be applauded for moving swiftly to resolve the crisis engulfing its 7.3 billion Swiss francs ($7.3 billion) of unconstrained absolute return bond funds. But investors are about to learn how easy – or hard – it is to find buyers for such a large group of investments at acceptable prices. It could deliver a costly lesson in the risks of chasing returns in the current less-than-liquid environment.
A quick recap: It's less than two weeks since the Swiss investment firm suspended portfolio manager Tim Haywood and halted redemptions from the funds he oversaw after finding what it called insufficient “due diligence on some of the investments that were made.”