Geneva, July 31, 2023 (GLOBE NEWSWIRE) -- Investor group NewGAMe and Bruellan raises serious concerns about the risk of a liquidity mismatch at major Liontrust fund
Geneva, 31 July 2023 – The investor group comprised of NewGAMe SA and Bruellan SA, which controls approximately 9.6% of the issued share capital of GAM Holding AG [GAM:SWX] (“GAM”), has raised serious concerns about liquidity and risk management at one of Liontrust’s largest funds.
An open letter, written by NewGAMe director Albert Saporta to Liontrust CEO John Ions, lists
several concerns about Liontrust [LIO:LN] as a bidder for GAM. The two most critical risks are:
- The risk of a liquidity mismatch under certain market circumstances at Liontrust’s flagship Special Situations Fund, which has seen its AuM decline from GBP 6.5bn to GBP 4.5bn since the end of 2021. Up to 40% of AuM could be considered not liquid or outright illiquid under certain market circumstances. Some positions could take years to liquidate given current market liquidity. Moreover, cross-ownership of positions between funds managed by the same team means that a liquidity event in one fund would affect the others in a feedback loop, leading to more forced liquidations
- The recent departure of the ex-Majedie team managing the Tortoise fund, which has led to a total collapse of that fund’s AuM. Considering Liontrust’s acquisition of Majedie was only completed in April 2022, this exposes Liontrust’s poor acquisition record and shaky business model
Albert Saporta, director of NewGAMe, said:
“As GAM’s second-largest shareholder, we ask ourselves whether there is a price at which we would consider tendering our shares and becoming a Liontrust shareholder. The answer is no: there are too many red flags – not least the risk that Liontrust experiences a Woodford-style liquidity mismatch at its largest fund.”
NewGAMe’s open letter to Liontrust can be found here:
https://newgam.ch/assets/downloads/NewGAMe_Letter_to_Liontrust_31_July.pdf
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Media contacts
Sasha Johnson – FinElk
newgam@finelk.eu
info@newgam.ch
www.newgam.ch
Investor contacts
Okapi Partners LLC
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About NewGAMe
NewGAMe SA is a Geneva-based company owned by a number of investors with experience in the financial sector. It is controlled by Rock Investment, a French-incorporated entity that is owned by NJJ Holding, the personal holding company of Xavier Niel. Albert Saporta, a hedge fund industry veteran with 40 years’ experience in global financial markets, serves as the director of NewGAMe SA.
About Bruellan
Bruellan SA is an independent provider of global wealth management solutions. The company was founded in 1991 and is located in Geneva, Lausanne, Crans-Montana and Verbier.
