GLG Posts Loss, Assets Fall 13%

Feb 13 2009 | 3:48am ET

GLG Partners continued to hemorrhage assets in the fourth quarter, leaving the firm almost US$10 billion lighter than at the beginning of last year.

The firm said assets under management fell 13% in the last three months of 2008, leaving it with US$15 billion in assets. Much of the outflow can be attributed to the departure of star portfolio manager Greg Coffey, who left the firm in November for Moore Capital Management. Overall, the firm saw 39% of its assets disappear last year, despite redemption gates imposed as investors sought to yank their assets. Co-CEO Noam Gottesman said roughly 10% of the firm’s assets are now in gated or special asset vehicles.

“GLG was hit by a trinity of issues in 2008—the departure of a major team, the Lehman bankruptcy and poor positioning,” Gottesman said. “The redemption cycle in the industry is not over, but hopefully it’s paused.”

The firm’s funds posted a positive return last month, rising 2.5%. GLG actually did worse by its investors than it did by its clients: The firm’s net income last year dropped 57% to US$128 million.

Meanwhile, GLG managed to avoid breaching covenants on its debts with a deal to buy Société Générale Asset Management’s British business.

The firm could have had to pay US$10 million to change the covenants on its US$570 million in debt, as it was in danger of falling below the minimum assets under management specified in the loan terms. Instead, it struck a deal to buy the SocGen unit in December, immediately beginning to manage its US$3 billon in assets, and keeping it above the covenant minimum, the Financial Times reports.


In Depth

U.S. Treasury Moves on Reinsurance Loophole

Apr 24 2015 | 5:11pm ET

The U.S. Treasury Department has released proposed rules aimed at limiting the ability...

Lifestyle

Artivest Announces Funding Round Led by KKR & Co.

May 4 2015 | 9:56am ET

Artivest, a startup that provides individual investors with access to private equity...

Guest Contributor

Starting a ‘40 Act Fund Family? Don’t Forget Your Board

Apr 30 2015 | 7:18am ET

The convergence of the hedge fund and mutual fund worlds continues unabated, as...

 

Editor's Note