Activist investors propose candidate to become GAM chief

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Activist investors at GAM have named their candidate to become chief executive at the Swiss asset manager as they move to take control after the failure of Liontrust’s takeover offer.

The activist group NewGAMe, which owns 9.6 per cent of GAM, will put forward hedge fund and asset management industry veteran Randel Freeman as chief executive, a position currently held by Peter Sanderson, at an extraordinary general meeting in September.

GAM’s shareholders turned down the Liontrust deal, with only about 33.5 per cent of the Swiss asset manager’s investors voting for the transaction, announced in May. NewGAMe called the offer “lopsided” as GAM shareholders would own 12.6 per cent of the combined entity, despite contributing about 40 per cent of the assets under management.

Following the deal’s failure, GAM’s board on Tuesday announced its intention to step down at the EGM, recommending that shareholders vote for the new directors proposed by the activists.

NewGAMe has already named its own board nominees. Antoine Spillmann, chief executive at Bruellan, part of the activist investor group, is the candidate for chair. Other board candidates include Fabien Pictet, founder of Fabien Pictet & Partners and Carlos Esteve, founder of Banque Heritage.

Part of Liontrust’s offer was a £17.8mn loan to GAM, half of which had already been drawn down. Rock Investment, which owns a controlling share in NewGAMe, has agreed to lend SFr20mn ($23mn) to replace this loan, which Liontrust has warned it could call in within 30 days. Rock Investment’s loan will then be replaced by a SFr25mn convertible bond issued by GAM, subject to shareholder approval.

Spillmann described Freeman as “an outstanding investor with significant management, client and marketing experience”.

He has worked in the hedge fund and asset management industry for more than 30 years, including as chief investment officer of Fortress Centaurus Strategies and co-head of risk arbitrage at BNP Paribas. He is currently on the investment committee of the Sterling Strategic Value Fund, an activist investor in European small and mid-cap companies, and manages a London-based activist investor, Ex-Ante Partnership.