GAM Investments has decided to liquidate nine of its suspended unconstrained/absolute return bond funds (ARBF).
Out of the nine funds, three – GAM Absolute Return Bond, GAM Absolute Return Bond Defender and GAM Absolute Return Bond Plus – are registered for sale in Singapore.
The proposed liquidation is subject to any applicable regulatory and fund shareholder approvals, however.
In its letter to shareholders, GAM said the liquidation approach will allow investors the opportunity to receive proceeds in a timelier manner and ensure equal treatment.
It is expected that all fund shareholders would periodically receive their proportionate interest in cash as it becomes available throughout the liquidation process.
Meanwhile, GAM is also working on establishing alternative structures for fund shareholders who want to remain invested with the ARBF team.
Early this month, the firm announced that all subscriptions and redemptions in its ARBF have been suspended as of end-July following high level of redemptions.
The impacted funds represented CHF7.3 billion ($7.35 billion) in assets under management as of end-July.
GAM said it will cease charging any management fees to the affected funds while they remain suspended or if they go into liquidation.
Other funds to be liquidated include: GAM Star Absolute Return Bond, GAM Star Absolute Return Bond Defender, GAM Star Absolute Return Plus, GAM Star Dynamic Global Bond, GAM Absolute Return Bond Master fund, and GAM Unconstrained Bond fund.
In other developments, Citywire + rated Timothy Haywood, who heads the ARBF, was suspended in July following an internal investigation on some of his risk management procedures and his record keeping in certain instances.
The company’s investment directors Jack Flaherty and Alex McKnight have assumed joint responsibility for the ARBF and other associated portfolios.
The ARBF funds have experienced a high level of redemption requests following Haywood’s suspension.
As of writing, no redemption requests for the suspended funds have been paid out.