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.