GAM, the Switzerland headquartered asset manager, has announced it will close an investment fund linked to Greensill Capital — the supply chain finance company that is battling for survival.
Zurich-based GAM said it had taken the decision to wind down the GAM Greensill Supply Chain Finance fund “as a result of recent market developments and resulting media coverage related to supply chain finance”.
The decision comes a day after Credit Suisse Asset Management suspended $10bn of investment funds linked to the SoftBank Group-backed finance startup, which has appointed Grant Thornton to guide it through a possible restructuring and it could file for insolvency.
Credit Suisse said on 1 March that its asset management arm would stop investors from buying into or selling out of four private investment funds that rely exclusively on debt-like securities created by Greensill.
A part of the funds is “currently subject to considerable uncertainties with respect to their accurate valuation,” according to a notice the bank sent to investors.
GAM said its supply chain finance fund was available only to qualified investors and had a total of $842m of assets with less than 10 clients in the fund. GAM added the fund’s assets are fully insured against default by third party insurers and that there are no concerns regarding the valuation of assets.
The asset manager said it would waive fees on the fund while it is being wound up. Assets held in the fund have a final maturity of 12 months or less.
Peter Sanderson, chief executive of GAM, said: “Clients are at the heart of our business at GAM and we have taken the decision to close our Supply Chain Finance fund as we believe this is in the best interests of all clients in the fund.
“Our portfolio is comprised of investment grade assets and we do not have any valuation concerns. As such we anticipate an orderly fund liquidation and return of client assets in the normal course.”
The closure of the Supply Chain Finance fund brings the curtain down on GAM’s business relationship with Greensill dating back to 2016.
GAM’s links to Greensill came into sharp focus following the suspension of star fund manager Tim Haywood in 2018. Haywood, who was later dismissed for gross misconduct, ran the GAM Greensill Supply Chain Finance fund before his departure.
An internal probe at GAM focused on Haywood’s relationship with Greensill and his investment in assets sourced from Greensill, according to correspondence between GAM and the UK’s top financial regulator, which was seen by FN.
The correspondence pointed to several concerns, including possible conflicts of interest in Haywood’s relationship with Greensill and whether his dealings with Greensill had breached company policies on risk management, record-keeping and gifts and hospitality.
An FN investigation in 2019 found that Greensill previously held one of the biggest stakes in the GAM supply chain finance fund. Greensill’s 2017 accounts showed that it had $1.2bn in the fund, before withdrawing its investment in April 2019.
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