GAM, one of the five largest fund of hedge funds managers, is expected to lose 5% of its Sfr69bn (€54bn) of assets under management in the second half of this year in the most significant example to date of the anticipated distress at funds of hedge funds.

Equity analysts at Citigroup, who cover GAM's parent, Swiss private bank Julius Baer, predict Sfr7bn of outflows from the group's asset management businesses in the second half. That would account for about 5% of the Sfr146bn that is split more or less equally between GAM and Artio Global, a specialist US asset manager also owned by the Julius Baer group.