(Adds Myners comment)
By Tom Bergin and John Miller
LONDON/ZURICH, June 19 (Reuters) - A member of Britain's House of Lords said on Wednesday that the UK financial regulator should investigate the GAM Greensill Supply Chain Finance Fund in relation to the pricing of investments and activities of its managers.
Paul Myners, a former financial services minister, told Reuters in an interview that he was concerned the regulator, the Financial Conduct Authority (FCA), was not sufficiently alert to the dangers of unlisted assets. These can boost funds' returns but also carry hidden risks.
"The FCA needs to be looking at the processes followed by GAM and the appropriateness of the investments for a fund that was marketed as low risk," he said.
GAM, Greensill and the FCA declined to comment on Wednesday.
On June 10, Myners, who has held senior roles in the UK's investment industry for decades, submitted a question to the finance ministry regarding the fund.
He asked: "Her Majesty's Government whether they are investigating, or intend to investigate, the management of, investment valuations used by, and relationships between managers and businesses invested in, the GAM Greensill Supply Chain Finance Fund," according to the parliamentary website.
The GAM Greensill Supply Chain Finance fund is managed by Zurich-based GAM Holding, with help from London-based Greensill. It invests in short-term debts linked to companies' expected payments from customers or payments due to suppliers.
GAM's share price has halved in the past year after the suspension of its star fund manager, Tim Haywood, for what it said was due diligence failures. Haywood has denied any wrongdoing.
Reuters reported in April that Haywood's suspension followed complaints from a whistleblower regarding his purchase of 550 million pounds ($691.85 million) worth of bonds issued by Sanjeev Gupta's GFG Alliance, which were backed by diesel power generators that have largely sat idle in recent years.
GFG Alliance declined to comment on Wednesday. ($1 = 0.7950 pounds) (Reporting by John Miller in Zurich and Tom Bergin in London; Editing by Michael Shields and Jane Merriman)