WEST PALM BEACH, FL (www.hedgeco.net) – GLG Partners, one of the leading hedge fund managers in London is to repay investors nearly $1bn (�550m) after poor performances in some of its main funds. Thefirm is currently under pressure following the collapse of two of the firms� specialist areas in the capital markets according to reports. The GLG Partners hedge fund portfolio saw about 14.5 percentdrop in the total value of one of the firm�s credit funds, and another $2.5 billion in its Market Neutral fund. According to the report, GLG wrote to investors in those strategies apologizing forsuch performance.
Such apologies however failed to stop investors from moving their assets away from those poor performing strategies sources close to the situation said. The source said that about $1 billion in investment assets had already been withdrawn from the GLG funds. GLG did not comment on such reports, but it has allegedly sold some of its most difficult positions so as to be ready with cash redemptions when investors need their money. Three former Lehman traders founded GLG, Noam Gottesman, a trustee of the Tate Gallery, Pierre Lagrange and Jonathan Green – in 1995. Its investment bank has 20 percent stake in its portfolios, according to published reports. Lehman Brothers was in negotiations to buy the rest of the business last year but the deal failed to materialize.
Knowledgeable sources said many hedge funds specializing in the credit markets suffered significant losses from the downgrading of General Motors and Ford Motors bonds to near junk bond status.
Eric Syz, the head of Banque Syz, said that the problems in the credit markets scared off many potential hedge fund investors who thought hedge funds were an easy way to make money. He said, “The industry will end up more solid because investors will be more solid and managers will be of a better quality.�
Paul Oranika
Editor-in-Chief
HedgeCo.Net
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