GAM CEO Friedman Leaves After Manager Suspension Fuels Outflows

(Bloomberg) -- GAM Holding AG, the Swiss asset-management firm that’s been in a tailspin since suspending a star fund manager, said chief executive officer Alex Friedman will step down and be replaced in the interim by board member David Jacob until a permanent CEO is found.

Key Insights
  • GAM is trying to halt a slide in its shares triggered by the suspension of Tim Haywood and the flood of investor redemptions that followed. The stock-price decline slashed the company’s market value by more than 60 percent this year and made GAM a potential target for rivals in a consolidating industry.
  • Friedman’s exit is a move that some analysts have seen coming for a long time. Even before the Haywood suspension, he had to take a writedown on a quant hedge fund unit after it didn’t meet expectations.
  • His departure may open the door for deals. In October, Bloomberg reported that GAM had held informal talks with potential buyers for all or part of the business, citing people familiar with the discussions. GAM’s board said in August it was looking at all options to increase shareholder value.
  • Interestingly, Jacob has a lot of connections in the asset management industry, having worked at Rogge Global Partners Ltd. and Henderson Global Investors before.

Digging Deeper

  • Last year, Swiss hedge fund RBR Capital abandoned an attempt to push through a radical overhaul and management changes at GAM after failing to rally enough shareholders to achieve its goals. Among its wishes was the removal of Friedman, who has run the company since 2014.
  • The $145 billion money manager expects to review its profit targets, people with knowledge of the matter said earlier in October. The loss of funds managed by Haywood -- as well as outflows from other strategies -- wiped out tens of millions of francs in earnings.

©2018 Bloomberg L.P.