Major Drama at GLG Partners
The stock of GLG Partners (GLG-NYSE) has basically traded down every day since March 9th. For good reason, apparently:
GLG Emerging Markets, was up almost 51 per cent last year and 60 per cent the year before, although it fell almost 8 per cent in March, its worst month ever.
GLG is London’s second-biggest hedge fund manager and has big ambitions to expand. It is particularly keen to raise its profile in the US, using its listing to help secure money from big institutional investors.
However, it has had a tough start to the year, with several funds down sharply and former flagship Market Neutral down 9 per cent in the first three months. FT
The stocks of Northern Trust and Blackrock are looking downright bluechip these days compared with their alternative assets peers; who is in charge of the asylum at GLG?
Apparently the drama queens:
The top-performing fund manager at GLG Partners unexpectedly resigned this week and is in talks with the London hedge fund over “options” for the future, the company said.
New York-listed GLG – which restated last year’s $93m net income to a $311m loss because of a non-cash-accounting error – said in a statement Greg Coffey quit on Monday but withdrew his resignation.
Mr Coffey runs five GLG emerging markets funds, managing about $7bn of the firm’s $24bn assets, and his exit would be a serious blow to the company.
He is estimated to have generated more than half of the company’s performance fees last year.
Combine the personnel issues with a $401 million restatement after an error in the company’s accounting treatment, and you have jittery shareholders running for the hills.
Rival Och-Ziff Capital Management might appear well managed by comparison, but the stock continues to probe new lows as investors realize it is a win-win situation.
Not for public shareholders however; but for the prima donna’s staffing the dealing desks at the publicly traded hedge fund operators.
Good work, if you can get it.
Will antics like this, combined with the sinking stocks, shut the window for future hedge fund IPO’s?
GLG scrambles to hold on to star fund manager
FT
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