GAM Investments’ CEO Out Amid Turmoil
Alexander Friedman has agreed to step down after the embattled firm lost 20 percent of its assets in a single quarter.
After liquidating its $7 billion bond funds and posting dismal third-quarter results, GAM Investments has split with its chief executive officer.
According to a Tuesday announcement, CEO Alexander Friedman and the company’s board “have agreed that the next stage of the company’s evolution would be best served by new leadership.” As a result, Friedman will step down and board member David Jacob will become interim CEO.
GAM is in the process of hiring headhunters to find internal and external candidates to replace Friedman permanently, a GAM spokesperson told Institutional Investor by phone Tuesday. There is no specific time frame for hiring a new CEO, the spokesperson added.
The CEO’s exit comes roughly two weeks after the Swiss asset manager reported a 20 percent decline in assets under management during the third quarter, primarily from closing its unconstrained/absolute return bond funds (ARBF).
In late July, GAM announced that it had suspended Tim Haywood, the head of its ARBF, for potentially failing to conduct enough due diligence on certain investments, in addition to other policy breaches, the firm said at the time.
After announcing Haywood’s suspension, the firm received a high level of redemption requests for the ABRF and eventually decided to wind down the nine products. The ABRF group managed roughly CHF 7.3 billion ($7.34 billion) as of July 31.
[II Deep Dive: GAM Investments Bleeds $18 Billion in a Single Quarter]
The company continued to experience upheaval through the early fall, when compliance chief Natalie Baylis said she would step down only months after joining, citing “personal reasons.”
Now, GAM’s chief executive officer is out, too.
“Alex had the full support of the board in the decision to suspend a portfolio manager in July,” said GAM’s chairman, Hugh Scott-Barrett, in a statement. “During his tenure as CEO, he has driven a significant program of change that has made us a more modern, diversified, and cost-effective business.”
Friedman had served as CEO since 2014, according to the website. Immediately prior to joining GAM, Friedman was global chief investment officer of UBS Wealth Management and Wealth Management Americas. He also held roles at the Bill & Melinda Gates Foundation and Lazard. In his early career, Friedman worked as a White House fellow to the Clinton Administration.
For interim CEO Jacob, his “immediate priority will be to ensure that the steps necessary to drive forward GAM’s strategy and to support profitability are actioned as soon as possible,” the announcement said.
Jacob joined the board in 2017, according to GAM’s announcement. He was most recently CEO of Rogge Global Partners, which he left in 2016. Jacob has also worked for Henderson Global Investors (now Janus Henderson), UBS Global Asset Management, Merrill Lynch Investment Managers, and JPMorgan Asset Management, according to GAM.