Pressure mounts on Greensill as GAM cuts ties too
After Credit Suisse on Monday, it is the turn of Swiss asset manager GAM Investments to close its GAM Greensill Supply Chain Finance fund to subscriptions and redemptions. The firm said the decision resulted from recent market developments and media coverage related to supply chain finance that followed. GAM, which had been caught in an illiquidity scandal within its absolute return bond fund range involving Greensill during summer 2018, added that it will ensure all clients are treated fairly. It said it is embarking on the process of returning their full investment to them in an orderly manner.
The closure of the Supply Chain Finance fund terminates GAM’s business relationship with Greensill that started in 2016. The GAM Greensill Supply Chain Finance fund, with assets of $842m and less than ten qualified investors invested, consists of an investment grade only strategy with payment obligations from globally recognised multinational corporations. All assets within the fund have a final maturity of 12 months or less, with a weighted average life of less than 60 days and are held and protected in Luxembourg-domiciled structures, argued the Swiss firm.
Peter Sanderson, GAM's group CEO, 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.”
Reuters reported on Tuesday that Greensill Capital was in talks to sell large parts of its business on Tuesday following Credit Suisse and GAM's announcements. The British fund stated to Reuters it was hoping to conclude a deal with a “global financial institution”, supposedly US private equity firm Apollo according to a source cited by the press agency, by the end of this week that would include “large parts of” its operating business and assets under management. The Wall Street Journal has reported that Greensill has hired Grant Thornton for a possible restructuring while according to the Financial Times, the firm is looking for insolvency protection in Australia, where its parent company is registered.