Gam’s real estate financing head Jon Rickert is bowing out after less than four years at the firm, adding to the Swiss fund group’s woes as it struggles to reverse the tide of outflows.
Rickert (pictured) will officially leave on 31 March to pursue other interests, according to an internal memo first seen and reported on by Bloomberg news and subsequently confirmed to Expert Investor’s sister publication Portfolio Adviser by Gam.
A statement from the Swiss manager said: “Jon Rickert has decided to leave the business to pursue other interests, with effect from 31 March 2019. Jon leaves Gam on good terms and will remain invested in the success of the Gam real estate debt business through deferred compensation invested in the existing funds”.
He will be replaced by Martin Farinola and Andrew Gordon who will jointly assume management of the five-person real estate debt team.
Rickert joined Gam in 2015 as part of the group’s acquisition of Renshaw Bay’s real estate finance arm, which had $1.2bn in committed capital at the time. Before that he worked at JP Morgan from 1997 to 2012 where he was one of the original members of its direct loan origination team in the US commercial mortgage-backed securities business and headed up the group’s EMEA real estate structured finance business.
Staff retention worries
Rickert’s exit comes at a precarious time for Gam and chief executive David Jacob, who is attempting to help the firm recover from the reputational damage of the blow-up of its £8.5bn (€9.95) absolute return bond range which led to the firm sacking one of its star managers, Tim Haywood. Haywood has since claimed he was unfairly dismissed and is being scapegoated by Gam.
Jacob, who took the reins of the firm three months ago after Alexander Friedman was ousted, said in an interview with Bloomberg last week staff retention was a key priority and that he had been in talks with Gam’s top fund managers to improve morale.
But that has become increasingly challenging in light of the Haywood saga, which has triggered billions of pounds worth of redemptions from other strategies, a profit warning and caused the firm’s share price to plummet.
Shares in Gam have fallen by three quarters in the last year and are now trading at a an all-time low of CHF 3.65 per share. Portfolio Adviser understands this could make it tougher to retain employees and directors of the group, who receive performance shares as part of their bonus package. According to Gam’s annual compensation report from 2017 the group management board receive half of their annual bonuses in cash and the other half in Gam shares that are vesting equally over a four-year period.
A statement from Gam said: “Gam’s compensation framework is designed to attract, retain and motivate employees and the talent which Gam needs in order to achieve its strategic goals, as well as to create a tangible link between performance and compensation”.
“Compensation awards, particularly discretionary bonus payments, are designed to align the interests of employees with those of the company’s shareholders. With effect from the 2017 performance year, bonus deferrals were introduced for all employees to provide further alignment with the interests of shareholders and clients, and also serve as an additional retention mechanism,” it said.
“Gam also maintains a number of share-based payment plans in the form of share option plans or share plans for employees.”
There is also a worry that the loss of a department head like Rickert could trigger more outflows, the last thing the asset manager needs.
Gam’s real estate financing is part of some CHF 3.5bn (€3.08bn) overseen by its private debt division, according to figures taken from an investor presentation last year.
