Alternative investment manager GLG Partners saw net assets under management decline by 39 per cent during 2008, from USD24.6bn to USD15bn, while net income for the year declined 57 per
Alternative investment manager GLG Partners saw net assets under management decline by 39 per cent during 2008, from USD24.6bn to USD15bn, while net income for the year declined 57 per cent to USD128m, according to the firm’s earnings report for 2008 and for the fourth quarter of the year.
Net revenues of USD495m for the year represented a decline of 52 per cent from 2007. GLG, which is based in London but listed in New York, reported a net loss under generally accepted accounting principles of USD142.7m for the last quarter of 2008 and of USD629.7m for the full year.
However, these losses are down to the accounting treatment of non-cash compensation-related expenses associated with GLG’s reverse acquisition transaction with Freedom Acquisition Holdings in November 2007 which resulted in its listing on the New York Stock Exchange. These expenses will continue to recur in GLG’s accounts until the end of 2013.
‘We faced a difficult environment in 2008 on multiple fronts, but we were able to substantially deepen our base of investment talent and broaden our focus as a firm,’ says GLG chairman and co-chief executive Noam Gottesman.
‘The acquisition of Société Générale Asset Management UK, which we began to evaluate during the summer of 2008 and which is expected to close in March this year, greatly enhances our long-only offering. In addition, we recently announced the planned addition of the investment managers of the Pendragon Funds to our team, and we have been growing our presence in the 130/30 arena.
‘Although the heightened level of economic uncertainty around the world continues to present both opportunities and challenges, we enjoy considerable flexibility with over USD100m in free cash on the balance sheet and the scalable infrastructure to continue to selectively acquire firms and teams of leading investment professionals. GLG is off to a good start in 2009 and we are optimistic about our prospects.’
The decline in net assets over the last three months of 2008 was largely due to negative performance, slightly offset by net inflows of USD800m. The fourth quarter saw redemptions from GLG’s emerging markets platform, and the funding of a USD1.6bn mandate from Banca Fideuram, part of the Intesa Sanpaolo Group.
The period also saw the signing of a USD3bn sub-advisory mandate from Société Générale Asset Management UK as part of the firm’s growing strategic relationship with Société Générale. GLG agreed at the end of December to acquire the UK business, a long-only asset manager with some USD8.5bn in assets, and expects to complete the purchase in March.
