18 Feb 2010
Net assets under management at GLG Partners, the asset manager, recovered sharply in 2009, growing 47%, but slowed to a 2.5% gain in the fourth quarter, hitting $22.2 billion at the yearend. GLG also reported that positive inflows continued in the opening weeks of 2010.
Institutional investors and sovereign wealth funds overshadowed private clients as the source of new allocations, GLG said. It noted that the uplift extended to all of its strategy areas, spanning long/short equity, convertibles, emerging markets and UCITS funds.
The average gain of GLG’s alternative funds in 2009 was 28.1%, while 130/30 funds rose 33.6% and long-only funds rose 29.6%. In January, alternative funds rose 1.7%, while 130/30 and long-only funds posted declines respectively of 1.9% and 0.5%, though this was still ahead of benchmarks.
Gottesman, who relocated to New York in the August, said inflows from US investors accounted for roughly half of the fourth quarter total. “A very considerable amount of the forward pipeline (of inflows) is from the US,” Gottesman said. Net inflows for the final quarter were $723 million and $3.2 billion for the year, including a gain of $2.6 billion from the acquisition of SG Asset Management in December 2008.
The inflows and gains in AUM didn’t protect GLG’s revenue base, however. Total fee income fell 39% to $301 million in 2009 from $495 million in the previous year. The biggest decline was in management fees, which plunged 52% to $153 million from $318 million. The reduction reflected a greater proportion in net AUM from long only funds and managed accounts which have lower management and administration fees than GLG’s alternative strategy funds.
Performance fees grew just 7% to $115 million despite generally much stronger investment performance across the GLG franchise in 2009. This reflected a lower level of AUM with performance fee features and negative investment performance in prior periods, principally 2008, which limited the level of AUM able to generate performance fees in 2009.
The annualized yield on management, administration, service and distribution fees was 0.92% of average net AUM, steady relative to the third quarter of 2009 and a decline of 65 basis points compared to the annualized yield in the fourth quarter of 2008. Greater representation in net AUM from long only funds and managed accounts funds drove the decline compared to the year ago period.
At December 31, GLG had $12.9 billion in long-only assets compared with $4 billion a year earlier. Alternative assets were $11.5 billion compared with $12.5 billion at the end of 2008.
Institutional investors and sovereign wealth funds overshadowed private clients as the source of new allocations, GLG said. It noted that the uplift extended to all of its strategy areas, spanning long/short equity, convertibles, emerging markets and UCITS funds.
“People are definitely allocating now,” said co-CEO Noam Gottesman. “There is an awful lot of interest. Alternatives definitely delivered. Prospects are looking great for the industry.”
The average gain of GLG’s alternative funds in 2009 was 28.1%, while 130/30 funds rose 33.6% and long-only funds rose 29.6%. In January, alternative funds rose 1.7%, while 130/30 and long-only funds posted declines respectively of 1.9% and 0.5%, though this was still ahead of benchmarks.
Gottesman, who relocated to New York in the August, said inflows from US investors accounted for roughly half of the fourth quarter total. “A very considerable amount of the forward pipeline (of inflows) is from the US,” Gottesman said. Net inflows for the final quarter were $723 million and $3.2 billion for the year, including a gain of $2.6 billion from the acquisition of SG Asset Management in December 2008.
The inflows and gains in AUM didn’t protect GLG’s revenue base, however. Total fee income fell 39% to $301 million in 2009 from $495 million in the previous year. The biggest decline was in management fees, which plunged 52% to $153 million from $318 million. The reduction reflected a greater proportion in net AUM from long only funds and managed accounts which have lower management and administration fees than GLG’s alternative strategy funds.
Performance fees grew just 7% to $115 million despite generally much stronger investment performance across the GLG franchise in 2009. This reflected a lower level of AUM with performance fee features and negative investment performance in prior periods, principally 2008, which limited the level of AUM able to generate performance fees in 2009.
The annualized yield on management, administration, service and distribution fees was 0.92% of average net AUM, steady relative to the third quarter of 2009 and a decline of 65 basis points compared to the annualized yield in the fourth quarter of 2008. Greater representation in net AUM from long only funds and managed accounts funds drove the decline compared to the year ago period.
At December 31, GLG had $12.9 billion in long-only assets compared with $4 billion a year earlier. Alternative assets were $11.5 billion compared with $12.5 billion at the end of 2008.
Asked whether heightened market concerns about sovereign risk had led GLG to cut exposure and leverage, Gottesman said: “Not at all.” He added: “I couldn’t think of anything better for absolute return or alternatives managers.”
