GAM Offering Star Fund Managers Special Retention Bonuses

(Bloomberg) -- GAM Holding AG is offering a special retention bonus to key fund managers, people with knowledge of the matter said, the latest measure by the asset manager to contain a crisis that’s seen investors pull money and the shares plummet.

The Zurich-based firm has offered deferred payments to money managers, the people said, asking not to be identified as the plan is private. The payments would be made over a two-to-three year period, one of the people said.

GAM Offering Star Fund Managers Special Retention Bonuses

The suspension of bond manager Tim Haywood in July triggered a crisis at the firm that’s led to billions of francs in client withdrawals and led to the departure of Chief Executive Officer Alex Friedman. GAM has held informal talks with potential buyers for all or parts of the business, people familiar with the matter said last month, though outflows and unresolved questions about controls and oversight may have put off some potential buyers.

A spokeswoman for GAM declined to comment.

GAM has said that Haywood breached the company’s gifts and entertainment policy and circumvented a rule that requires two signatures to make an investment.The episode raised concerns about oversight and saw assets under management at the firm slump by $18 billion in the three months through September.

In early July, GAM also had to take a $59 million impairment charge related to the acquisition of Cantab, a quantitative hedge fund business with links to the University of Cambridge.

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