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AA-rated manager caught in GAM fund closures

AA-rated manager caught in GAM fund closures

GAM has closed a clutch of young funds, including one run by its star Europe manager.

Niall Gallagher, rated AA by Citywire, only launched the GAM Star Global Leaders fund in December 2012 but it has already liquidated.

Gallagher’s (pictured) principal vehicle is the £450 million GAM Star Continental European Equity, which has returned 36% over the past three years compared with an average of 24% from its Citywire sector. His new fund was to have invested along similar lines but on a global basis.

GAM has also shut the Local Emerging Bond fund it launched in 2012 for its + rated team of Paul McNamara, Caroline Gorman and Denise Prime. The trio also run the £180 million GAM Star Emerging Market Rates fund, which has returned 5.2% on a three-year view against a 6.7% average from its Citywire category.

Their new fund was to have taken a top-down and thematic approach to investing in local-currency emerging market sovereign and quasi-sovereign debt.

Finally, the GAM Star QFS Global Macro Currency fund has closed too after its manager, QFS, decided to wind up its hedge funds. GAM launched the Ucits version of the fund in August last year.

Between inception in 1993 and the end of 2012, the QFS strategy produced a net annualised return of 10.8% with a correlation of less than 0.1 to both global bonds and global equities. However, it posted consecutive losses of nearly 9% in both 2012 and 2013, the first time it had fallen two years in a row.

At their closure, all three GAM funds contained less than £10 million and a spokesperson for the firm told Wealth Manager that they had been shut due to ‘insufficient assets under management’.

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Paul McNamara
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9/29 in Alternative UCITS - Bond Strategies (Performance over 3 years) Average Total Return: 12.33%
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36/74 in Equity - Europe Excluding UK (Performance over 3 years) Average Total Return: 28.76%
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