GLG Partners has reported a GAAP net loss attributable to common stockholders of USD24.4m for the quarter ended 30 June 2009 and a net loss of USD144.6m for the first half of fiscal 200
GLG Partners has reported a GAAP net loss attributable to common stockholders of USD24.4m for the quarter ended 30 June 2009 and a net loss of USD144.6m for the first half of fiscal 2009.
GAAP diluted EPS was a loss of USD0.11 for the quarter ended 30 June 2009 and a loss of USD0.67 for the first half of 2009.
These reflect improvements when compared to the GAAP net loss attributable to common stockholders of USD93.6m for the quarter ended 30 June 2008 and USD319.9m for the first half of fiscal 2008, and the GAAP diluted EPS loss of USD0.44 for the quarter ended 30 June 2008 and USD1.51 for the first half of fiscal 2008.
Under GAAP, GLG expects to continue to recognise significant and largely non-cash expenses associated with GLG’s reverse acquisition transaction with Freedom Acquisition Holdings in November 2007. Accordingly, the second quarter and first half 2009 GAAP net losses resulted directly from the recognition of USD128.9m and USD255.6m, respectively, of acquisition-related compensation expenses.
Non-GAAP adjusted net income was USD85.3m, up 93 per cent year-over-year, for the quarter ended 30 June 2009 and USD90.6m, up 16 per cent year-over-year, for the first half of fiscal 2009. The ratio of non-GAAP adjusted net income to non-GAAP weighted average fully diluted shares was 0.26 for the quarter ended 30 June 2009, up 83 per cent year-over-year, and 0.29 for the first half of fiscal 2009, up 18 per cent year-over-year.
"Our primary goal is to deliver strong, risk-adjusted investment returns for our clients and we are pleased to be reporting robust year-to-date investment performance across our platform," says Noam Gottesman, chairman and co-chief executive of GLG.
"We are encouraged by the stabilizing net AUM flow trends we have experienced over the past two quarters and the renewed interest we are seeing in GLG from both existing and new clients. The decisive steps we took over the past several months to broaden our long only strategies and enhance our financial flexibility have unequivocally strengthened the GLG franchise. Though we remain in an uncertain economic environment, we continue to see a rich range of opportunities both on the investing and strategic fronts."
GLG’s total net assets under management as of 30 June 2009 were approximately USD19.1bn (net of assets invested from other GLG managed funds), up 36 per cent from 31 March 2009 and down 19 per cent from 30 June 2008.
Investment performance across the GLG franchise was strong, increasing net AUM by USD1.8bn in the June 2009 quarter and USD1.0bn for the first half of 2009. Specifically, investment returns for the quarter ended 30 June 2009 for GLG’s alternative, long only and 130/30 strategies were 8.5 per cent, 27.4 per cent and 15.5 per cent, respectively. The year-to-date returns through 30 June 2009 were 13.3 per cent for the alternatives, 16.2 per cent for the long only strategies and 12.0 per cent for 130/30 strategies.
Net inflows for the quarter ended 30 June 2009 were positive at USD2.2bn reflecting the net addition of approximately USD2.6bn of long only net AUM from SGAM UK in April and USD413m of net outflows from the legacy GLG AUM (approximately USD267m from alternatives and USD146m from long only). SGAM UK had approximately USD7bn in net AUM when it was acquired on 3 April 2009.
For the first half of 2009, net inflows were USD2.3bn with USD2.6bn from SGAM UK and USD363m of net outflows from the legacy GLG.
The effect of currency translation increased net AUM by USD1.0bn in the quarter ended 30 June 2009 and USD0.8bn in the first half of 2009.
GLG’s total gross AUM (including assets invested from other GLG managed funds) was USD21.6bn as of 30 June 2009, up 40 per cent from 31 March 2009 and down 23 per cent from 30 June 2008.
Net revenues and other income were USD86.1m, down 54 per cent year-over-year, for the quarter ended 30 June 2009. The decline reflects lower average net AUM, lower levels of AUM in position to earn performance fees, and greater representation in net AUM from long only funds and managed accounts which have lower management and administrative fees than GLG’s alternative strategies.
First half 2009 net revenues and other income decreased by 57 per cent over the first half of 2008 to USD137.9m.
Second quarter 2009 performance fees decreased USD40.3m from the year ago period to USD37.9m. It is GLG’s policy to recognise performance fees when they crystallize, generally on 30 June and 31 December of each year. Accordingly, the second quarter’s performance fees largely reflect first half performance. First half 2009 performance fees declined 41 per cent over the first half of 2008 to USD48.8m. Although first half 2009 performance was generally stronger than the same period a year ago, less of GLG’s AUM were above their respective high water marks and able to earn performance fees.
Management fees and administration, service and distribution fees totalled USD42.0m for the quarter ended 30 June 2009, down 62 per cent from the same period last year on lower net AUM and a greater representation in net AUM from long only funds and managed accounts which have lower management and administrative fees than GLG’s alternative strategies.
The addition in April 2009 of SGAM UK’s net AUM with an average management, administration, service and distribution fee yield of 0.40 per cent was a large factor in the shift of net AUM mix during the quarter.
The annualized yield on management, administration, service and distribution fees was 0.89 per cent of average net AUM, a decline of 95 basis points compared to the yield in the second quarter of 2008.
For the first half of 2009, management fees and administration, service and distribution fees totalled USD81.9m, down 65 per cent from the same period last year. The annualized yield on management, administration, service and distribution fees was 1.08 per cent of average net AUM, a decline of 82 bps compared to the yield in the first half of 2008 (adjusted to exclude assets managed on an interim, sub-advisory basis by GLG for SGAM UK pending the completion of the acquisition).
Other income, which largely reflects the currency translation impact on non-dollar denominated cash held on GLG’s balance sheet and currency hedging, increased by USD6.7m from the second quarter of 2008 to USD6.2m for the three months ended 30 June 2009 due to the weakening of the US dollar during the period. For the first half of 2009, other income rose by USD2.0m from the same period a year ago to USD7.2m.
