Less than a week after he was dismissed for “gross misconduct,” the former head of GAM Holding’s absolute-return unconstrained bond fund group, Tim Haywood, will appeal the decision, according to a person familiar with the matter.
Haywood, who was suspended by the Swiss asset manager in July 2018, possibly failed to conduct enough due diligence on some of the firm’s investments, in addition to other policy breaches, according to GAM. An anonymous whistleblower was the source of the investigation, according to GAM.
After GAM announced that it was investigating the matter in August, the firm received a high volume of redemption requests from investors in the absolute-return unconstrained bond funds Haywood managed. As a result, GAM said it would liquidate the funds, which oversaw about $7 billion in assets at the time.
With the liquidation still in progress, GAM announced on February 21 in a full-year earnings report that Haywood had been dismissed.
According to Haywood, the firm engaged in a 15-month-long investigation before dropping most of the allegations against him. He declined to comment on which specific allegations were dropped.
“The remaining allegations leveled against me do not by any stretch constitute ‘gross misconduct’, even if they weren’t substantially disputed, which they are,” Haywood said in a statement provided to Institutional Investor via email.
Haywood will make an internal appeal at GAM in March, in which he will present a case disputing the firm’s findings, according to the person familiar with the matter. GAM declined to comment.
“I am exploring all legal options and look forward to the opportunity to clear my name and return to work,” Haywood said in the statement.
[II Deep Dive: GAM Dismisses Bond Fund Head Following Liquidation]
The absolute-return unconstrained bond fund investigation and its aftermath reverberated throughout GAM. The firm said in December that it would restructure and lay off some of its staff.