GAM Strikes a Deal to Help Put Crisis Behind It

GAM moved closer to drawing a line under the problems that have engulfed the Swiss fund manager with a deal to sell about £600m of bonds that will complete the liquidation of funds at the heart of its crisis, the Financial Times reported. The news from the Zurich-based group sent its shares up 14 per cent on Wednesday. It stunned the market last summer when it suspended Tim Haywood, a London-based investment director who oversaw the group’s SFr11bn absolute return bond funds (ARBF). It later announced plans to liquidate the fund range entirely. While the bulk of the assets have proved relatively easy to sell, it had been left holding SFr1.5bn ($1.5bn) of more esoteric debt. That included bonds related to an aircraft and a Scottish hydroelectric plant, according to people familiar with the matter. It also included paper linked to “Little Red Boxes” — large, portable containers that can convert waste oil into power and which can be used to provide back-up power for industrial plants — the people said. Read more

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