Freedom Acquisition Holdings, (AMEX:FRH.U)
Historical Stock Chart
From Jun 2019 to Jun 2024
LONDON, October 24 /PRNewswire-FirstCall/ -- - Net Income of USD46 Million; Adjusted Net Income of USD29 Million, Up 160% From Q3 2006
- Net Assets Under Management of USD20.5 Billion, Up 49% From Q3 2006
- Total Inflows of USD1.8 Billion During Q3 2007, Including Managed Account Inflows and Gross Fund-Based Inflows
GLG Partners (GLG), (Bloomberg: 493048Z LN) a leading alternative asset manager, today reported net income of USD46 million for the quarter ended September 30, 2007 and USD375 million for the first nine months of 2007. Adjusted net income (net income less limited partner profit share) was USD29 million, up 160% year-over-year, for the quarter ended September 30, 2007 and USD168 million, up 99% year-over-year, for the first nine months of 2007.
GLG's net assets under management as of September 30, 2007 reached USD20.5 billion (net of assets invested from other GLG managed funds), up 10% from June 30, 2007 and 49% from September 30, 2006. GLG's gross assets under management (including assets invested from other GLG managed funds) were USD23.6 billion at September 30, 2007, up 10% from June 30, 2007 and 48% from September 30, 2006. A combination of performance and healthy inflows drove the growth in assets under management (AUM) as set forth below in Table 1.
"Our diversified model continued to work in the volatile markets of the summer, showing particular strength in Emerging Markets, led by Greg Coffey, and in the European strategies, led by GLG Co-Founder, Pierre Lagrange, as well as substantial net inflows broadly in our alternative strategies", said Noam Gottesman, Co-Founder, Managing Director and Co-CEO of GLG. "We are looking forward to the upcoming completion of the reverse acquisition transaction with Freedom Acquisition Holdings (AMEX:FRH) (AMEX:FRH.U)(AMEX: FRH.WS) (Bloomberg: FRH/U US) ("Freedom") in the coming weeks and remain excited about the prospects for the future expansion and growth of our business."
Table 1: Assets Under Management
(USD in millions)
As of September 30,
__________________________
2007 2006
Gross Fund-Based AUM USD 21,524 USD 14,519
Managed Accounts AUM 1,905 1,042
Cash and Other Securities 164 372
Gross AUM USD 23,593 USD 15,932
YoY % Change 48%
Net AUM USD 20,466 USD 13,718
YoY % Change 49%
Three Months Ended Nine Months Ended
September 30, September 30,
_______________________ ________________________
2007 2006 2007 2006
Opening Gross
Fund-Based AUM: USD 19,485 USD 14,351 USD 16,053 USD 11,484
Fund-based inflows
(net of redemptions): 1,798 (72) 3,350 1,541
Fund-based net
performance (gains
net of losses): 241 240 2,121 1,494
_______ _______ _______ _______
Closing Gross
Fund-Based AUM: USD 21,524 USD 14,519 USD 21,524 USD 14,519
_______ _______ _______ _______
% of Opening Gross Fund-Based AUM
Gross Fund-based
inflows (net
of redemptions): 9.2% (0.5%) 20.9% 13.4%
Gross Fund-based net
performance (gains
net of losses): 1.2% 1.7% 13.2% 13.0%
Opening Managed
Accounts AUM: USD 1,843 USD 937 USD 1,233 USD 335
Inflows (net
of redemptions): 38 96 457 766
Net performance
(gains net of losses): 24 8 215 (60)
Closing Managed
Accounts AUM: USD 1,905 USD 1,042 USD 1,905 USD 1,042
% of Opening Managed Accounts AUM
Inflows
(net of redemptions): 2.1% 10.3% 37.1% 228.8%
Net Performance
(gains net of losses): 1.3% 0.9% 17.5% (17.9%)
Note: Net performance is based on both opening AUM and inflows during the period and can be influenced by heavy inflows and fluctuations in currencies.
Financial Summary
For Q3 2007, total net revenues and other income was up 79% to USD103 million compared to USD57 million in the same quarter last year, primarily due to increased management fees as a result of performance and strong inflows across the GLG managed funds. For the first nine months of 2007, total net revenues and other income increased 78% over the first nine months of 2006 to USD594 million.
Performance fees were immaterial in Q3 2007 as it is our practice to recognize performance fees when they crystallize, generally on June 30 and December 31 of each year. Accordingly, when Q4's performance fees are reported they will reflect crystallized second half performance.
Management and administration fees totalled USD95 million or 1.9% of average net AUM for Q3 2007, increases of 69% and 29 basis points (bps), respectively, from the same quarter in 2006. For the first nine months of 2007, management and administration fees totalled USD242 million, or 1.8% of average net AUM, increases of 56% and 16 bps, respectively, over the first nine months of 2006. Other income of USD7 million reflects primarily currency related gains on cash held on our balance sheet during Q3 2007.
The total level of comprehensive limited partner profit share, compensation and benefits ("PSCB") rose by 60% for Q3 to USD46 million. This is down by 539 bps to 45% when expressed as a percentage of revenues, versus the same period last year. PSCB is a financial measure not prepared under U.S. generally accepted accounting principles, or GAAP, and includes limited partner profit share as described below under "Non-GAAP Financial Measures." Employee compensation and benefits for Q3 2007 increased USD25 million over the same quarter last year to USD29 million primarily due to the reversal in Q3 2006 of selected employee compensation and benefits accruals as certain key personnel ceased to be employees and became participants in the limited partner profit share arrangement.
Please note that compensation expense and limited partner profit share tied to fund performance is only recognized when the related performance fees crystallize, generally on June 30 and December 31 of each year. When Q4 is ultimately reported, the portion of compensation expense and limited partner profit share tied to performance will reflect crystallized second half performance as well as any adjustments to amounts accrued in the first half.
PSCB for the first nine months of 2007 increased by 63% to USD318 million but fell by roughly 471 bps to 54% when expressed as a percentage of revenues when compared with the same period a year ago. Employee compensation and benefits for the first nine months of 2007 fell by 6% year-over-year to USD111 million as a result of certain key personnel ceasing to be employees when GLG established its limited partner profit share arrangement in 2006.
General, administrative, and other expenses for Q3 2007 increased 56% to USD26 million year-over-year, but fell 372 bps as a percentage of revenues to 25%. For the first nine months of 2007, these expenses rose 82% year-over-year to USD80 million or by 29 bps to 13% when expressed as a percentage of revenues, reflecting increases in operating costs due to significant growth in the business as well as certain one-time costs recognized in the first half of 2007.
"Our risk management and controls infrastructure performed well in what proved to be a turbulent period for capital markets globally", said Emmanuel Roman, Co-CEO and Managing Director of GLG. "Furthermore, our operations continue to scale and we are encouraged by the initial momentum with our new strategic partners, Istithmar and Sal. Oppenheim."
Investor/Analyst Conference Call and Webcast
GLG will be hosting a conference call for investors and analysts today at 11:00 AM EDT (New York City) / 4:00 PM BST (Guernsey/London). The dial-in number for the live conference call is +1-866-238-1665 in the US or +44(0)207-15-32-010 in the UK. To access a webcast of the conference call, please register via GLG's website http://www.glgpartners.com/.
The conference call replay can be accessed by dialling +1-888-266-2081 in the US or +1-703-925-2533 in the UK and entering access code #1156360. The webcast replay of the conference call will also be available on the Company's website at http://www.glgpartners.com/. Both the dial-in and webcast replay of the call will be available beginning on October 24, 2007 at 2pm EST or 7pm BST until November 7, 2007.
About GLG
GLG, the largest independent alternative asset manager in Europe and one of the largest in the world, offers its base of long-standing prestigious clients a diverse range of investment products and account management services. GLG's focus is on preserving client's capital and achieving consistent, superior absolute returns with low volatility and low correlations to both the equity and fixed income markets. Since its inception in 1995, GLG has built on the roots of its founders in the private wealth management industry to develop into one of the world's largest and most recognized alternative investment managers, while maintaining its tradition of client-focused product development and customer service. As of September 30, 2007, GLG managed gross AUM of over USD23 billion.
Forward-looking Statements
This press release contains statements relating to future results that are forward-looking statements. Actual results may differ materially from those projected as a result of certain risks and uncertainties. These risks and uncertainties include, but are not limited to: market conditions for GLG managed investment funds; performance of GLG managed investment funds, the related performance fees and the associated impacts on revenues, net income, cash flows and fund inflows/outflows; the cost of retaining GLG's key investment and other personnel or the loss of such key personnel; risks associated with the expansion of GLG's business in size and geographically; operational risk; litigation and regulatory enforcement risks, including the diversion of management time and attention and the additional costs and demands on GLG's resources; risks related to the use of leverage, the use of derivatives, interest rates and currency fluctuations; costs related to the proposed acquisition; failure to obtain the required approvals of stockholders of Freedom Acquisition Holdings, Inc. for the proposed acquisition transaction; and risks that the closing of the transaction is substantially delayed or that the transaction does not close, as well as other risks and uncertainties, including those set forth in the definitive proxy statement filed by Freedom with the Securities and Exchange Commission on October 11, 2007. These forward-looking statements are made only as of the date hereof, and GLG undertakes no obligation to update or revise the forward-looking statements, whether as a result of new information, future events or otherwise.
GLG
Unaudited Combined Statement of Operations
(USD in thousands)
Three Months Ended
September 30,
2007 2006 % Change
Net revenues and other
income
Management fees $ 78,558 $ 47,010 67%
Performance fees 803 1,102 NM
Administration fees 16,306 9,128 79%
Other 6,905 - NM
Total net revenues and other 102,572 57,240 79%
income
Expenses
Employee compensation and (28,959) (3,735) NM
benefits
General, administrative and (25,891) (16,576) 56%
other
(54,850) (20,311) 170%
Income from operations 47,722 36,929 29%
Interest income, net 3,048 1,029 196%
Income before income taxes 50,770 37,958 34%
Income taxes (4,735) (1,803) 163%
GAAP Net income $ 46,035 $ 36,155 27%
Nine Months Ended
September 30,
2007 2006 % Change
Net revenues and other
income
Management fees $ 198,892 $ 129,981 53%
Performance fees 343,835 177,047 94%
Administration fees 42,986 25,050 72%
Other 7,875 1,883 318%
Total net revenues and other 593,588 333,961 78%
income
Expenses
Employee compensation and (110,526) (118,194) NM
benefits
General, administrative and (79,634) (43,721) 82%
other
(190,160) (161,915) NM
Income from operations 403,428 172,046 134%
Interest income, net 4,694 3,603 30%
Income before income taxes 408,122 175,649 132%
Income taxes (33,020) (14,803) 123%
GAAP Net income $ 375,102 $ 160,846 133%
GLG
Combined Balance Sheet
(USD in thousands)
As of As of
September December
30, 31,
2007 2006
(unaudited)
Assets
Cash and cash equivalents $ 391,732 $ 273,148
Investments 163 201
Fees receivable 40,687 251,963
Prepaid expenses and other assets 32,647 25,944
Property and equipment (net of accumulated
depreciation and amortization of $11,669
and $10,117 respectively) 8,966 6,121
Total Assets $ 474,195 $ 557,377
Liabilities and Members' Equity
Current Liabilities
Rebates and sub-administration fees payable $ 19,473 $ 19,146
Accrued compensation and benefits 63,199 102,507
Income taxes payable 19,038 25,094
Distributions payable 71,311 9,310
Accounts payable and other accruals 14,753 19,716
Other liabilities 3,654 5,100
Total Current Liabilities 191,428 180,873
Non-Current Liabilities
Loan payable 13,000 13,000
Minority Interest 2,031 1,552
Total Non-Current Liabilities 15,031 14,552
Commitments and Contingencies - -
Total Liabilities 206,459 195,425
Members' Equity
Members' equity 6,843 6,356
Retained Earnings 257,238 352,690
Accumulated other comprehensive income 3,655 2,906
Total Members' Equity 267,736 361,952
Total Liabilities and Members' Equity $ 474,195 $ 557,377
GLG
Non-GAAP Adjusted Net Income for the Three and Nine Months
Ended September 30, 2007 and September 30, 2006
(USD in thousands)
Three Months Ended Nine Months Ended
September 30, September 30,
2007 2006 % 2007 2006 %
Change Change
Derivation of non-GAAP
adjusted net income
GAAP Net $ 46,035 $ 36,155 27% $ 375,102 $ 160,846 133%
income
Deduct: limited (17,000) (25,000) (32%) (207,500) (76,530) 171%
partner profit share
Non-GAAP $ 29,035 $ 11,155 160% $ 167,602 $ 84,316 99%
adjusted net
income
GLG
Non-GAAP Expenses for the Three and Nine Months Ended
September 30, 2007 and September 30, 2006
(USD in thousands)
Three Months Ended Nine Months Ended
September 30, September 30,
2007 2006 % 2007 2006 %
Change Change
Non-GAAP
expenses
GAAP employee $ (28,959) $ (3,735) $ (110,526) $ (118,194)
compensation
and benefits
Limited (17,000) (25,000) (207,500) (76,530)
partner
profit share
Non-GAAP $ (45,959) $ (28,735) 60% $ (318,026) $ (194,724) 63%
Comprehensive
limited
partner
profit share,
compensation
and benefits
GAAP General, (25,891) (16,576) 56% (79,634) (43,721) 82%
administrative and
other
Non-GAAP $ (71,850) $ (45,311) 59% $ (397,660) $ (238,445) 67%
total
expenses
Non-GAAP
Financial
Measures
GLG presents certain financial measures that are not prepared in
accordance with U.S. generally accepted accounting principals, or GAAP,
in addition to financial results prepared in accordance with GAAP.
Comprehensive Limited Partner Profit Share, Compensation and Benefits
("PSCB"): GLG's management assesses its personnel-related expenses based
on the measure "non-GAAP comprehensive limited partner profit share,
compensation and benefits", or non-GAAP PSCB. This non-GAAP financial
measure reflects GAAP employee compensation and benefits, adjusted to
include the limited partner profit shares.
Beginning in mid-2006, GLG entered into partnerships with a number of its
key personnel who ceased to be employees and instead became holders of
direct or indirect limited partnership interests in certain GLG entities.
These individuals continue to provide services to GLG, either directly or
through two limited liability partnerships. Through their partnership
interests, these key individuals are entitled to profit shares in the
form of priority distributions paid as partnership draws. In addition
they may be entitled to an additional discretionary limited partner
profit share. The key personnel that are participants in the limited
partner profit share arrangement described above do not receive salaries
or discretionary bonuses from GLG.
Under GAAP, limited partner profit share cannot be presented as employee
compensation expense. However, management believes that it is more
appropriate to treat limited partner profit share as expense when
considering business performance because it reflects the cost of the
services provided to GLG by these participants in the limited partner
profit share arrangement. As a result, GLG presents the measure non-GAAP
PSCB to show the total cost of the services provided to GLG by both
participants in the limited partner profit share arrangement and
employees. For purposes of this non-GAAP financial measure, GLG
recognizes the limited partner profit share in the period in which the
revenues related to the limited partner profit share are recognized,
rather than the period in which the limited partner profit share
distributions are made.
Non-GAAP PSCB is not a measure of financial performance under GAAP and
should not be considered as an alternative to GAAP employee compensation
and benefits.
Adjusted Net Income: GLG's management assesses the underlying performance
of its business based on the measure "adjusted net income", which adjusts
for the difference between GAAP employee compensation and benefits and
non-GAAP PSCB as discussed above. Adjusted net income is not a measure of
financial performance under GAAP and should not be considered as an
alternative to GAAP net income as an indicator of GLG's operating
performance or any other measures of performance derived in accordance
with GAAP.
GLG is providing these non-GAAP financial measures to enable investors,
securities analysts and other interested parties to perform additional
financial analysis of GLG's personnel-related costs and its earnings from
operations and because it believes that they will be helpful to investors
in understanding all components of the personnel-related costs of GLG's
business. GLG's management believes that the non-GAAP financial measures
also enhance comparisons of GLG's core results of operations with
historical periods. In particular, GLG believes that the non-GAAP
adjusted net income measure better represents profits available for
distribution to stockholders than does GAAP net income.
Investors should consider these non-GAAP financial measures in addition
to, and not as a substitute for, or superior to, measures of financial
performance prepared in accordance with GAAP. The non-GAAP financial
measures presented by GLG may be different from non-GAAP financial
measures used by other companies.
(USD in Q3 2007 Q2 2007 Q3 2006 LTM(1) YTD(2)
millions)
Gross AUM 23,593 21,522 15,932 23,593 23,593
Net AUM 20,466 18,585 13,718 20,466 20,466
Average 19,533 17,343 13,592 16,805 17,576
net AUM
(USD in thousands)
Management 78,558 62,991 47,010 255,184 198,892
fees
Performance 803 340,512 1,102 561,527 343,835
fees(3)
Administration 16,306 14,036 9,128 52,751 42,986
fees
Other 6,905 472 - 10,891 7,875
Total net revenues 102,572 418,010 57,240 880,353 593,588
and other income
Employee (28,959) (56,518) (3,735) (160,717) (110,526)
compensation and
benefits
General, (25,891) (27,979) (16,576) (104,177) (79,634)
adminstrative
and other
Net interest 3,048 171 1,029 5,749 4,694
income
GAAP net income 50,770 333,685 37,958 621,208 408,122
before taxes
Income tax (4,735) (25,031) (1,803) (47,443) (33,020)
expense
GAAP net income 46,035 308,654 36,155 573,765 375,102
after taxes
Limited (17,000) (184,047) (25,000) (332,420) (207,500)
partner profit
share
Non-GAAP adjusted net 29,035 124,607 11,155 241,345 167,602
income (4)
Management fees and 1.9% 1.8% 1.7% 1.8% 1.8%
Administration fees/
Avg. net AUM(5)
Total net revenues 2.1% 9.6% 1.7% 5.2% 4.5%
and other income
/Avg. net AUM(5)
Employee compensation 45% 58% 50% 56% 54%
and benefits and
limited partner profit
share/ Total net
revenues and other
income
General, administrative 25% 7% 29% 12% 13%
and other expenses/
Total net revenues and
other income
Non-GAAP adjusted net 28% 30% 19% 27% 28%
income/Total net
revenues and other
income
Effective income tax 14% 17% 14% 16% 16%
rate
(1) LTM period is Oct 1, 2006 to Sept 30, 2007.
(2) YTD period is Jan 1, 2007 to Sept 30, 2007.
(3) Performance fees are recognised when they crystallize, generally on
June 30 and December 31 each year. As a result, the performance fee
revenues do not reflect revenues from uncrystallised performance fees
during Q1 and Q3.
(4) See "Non-GAAP Financial Measures" for further detail.
(5) Ratios annualized for Q3 2006 as well as Q2 and Q3 2007.
As of YOY As of YOY Qtr on Qtr
June 30, % September 30, % % Change
2007 2006 Change 2007 2006 Change Q3 Q3
2007 2006
Alternative $ 12,826 $ 9,059 42% $ 14,713 $ 9,184 60% 15% 1%
strategy
Long-only 4,432 3,730 19% 4,561 3,735 22% 3% 0%
Internal 1,627 1,086 50% 1,651 1,089 52% 1% 0%
FoHF
External 599 477 26% 598 511 17% 0% 7%
FoHF
Gross 19,485 14,351 36% 21,524 14,519 48% 10% 1%
Fund-Based
AUM
Managed 1,843 937 97% 1,905 1,042 83% 3% 11%
accounts
Cash 194 339 (43%) 164 372 (56%)(16%) 10%
Total Gross 21,522 15,627 38% 23,593 15,932 48% 10% 2%
AUM
Less: (1,642) (1,020) 61% (1,653) (1,091) 52% 1% 7%
internal
FoHF
investments
in GLG funds
Less: (56) (13) 343% (55) (48) 15% (1%) 281%
external
FoHF
investments
in GLG funds
Less: (1,239) (1,127) 10% (1,419) (1,075) 32% 14% (5%)
alternatives
fund-in-fund
investments
Net AUM $ 18,585 $ 13,467 38% $ 20,466 $ 13,718 49% 10% 2%
Three Months Ended Three Months Ended Nine Months
June 30, September 30, Ended September
30,
2007 2006 2007 2006 2007 2006
Opening $ 17,060 $ 12,934 $ 19,485 $ 14,351 $ 16,053 $ 11,484
Gross
Fund-Based
AUM
Fund-based 1,393 1,407 1,798 (72) 3,350 1,541
inflows (net
of
redemptions)
Fund-based 1,032 10 241 240 2,121 1,494
net
performance
(gains net
of losses)
Closing $ 19,485 $ 14,351 $ 21,524 $ 14,519 $ 21,524 $ 14,519
Gross
Fund-Based
AUM
% of Opening
Gross
Fund-Based
AUM
Gross 8.2% 10.9% 9.2% (0.5%) 20.9% 13.4%
Fund-based
inflows (net
of
redemptions)
Gross Fund-based 6.0% 0.1% 1.2% 1.7% 13.2% 13.0%
net performance
(gains net of
losses)
Opening $ 1,398 $ 505 $ 1,843 $ 937 $ 1,233 $ 335
Managed
Accounts AUM
Inflows (net 351 536 38 96 457 766
of
redemptions)
Net 94 (104) 24 8 215 (60)
performance
(gains net
of losses)
Closing $ 1,843 $ 937 $ 1,905 $ 1,042 $ 1,905 $ 1,042
Managed
Accounts AUM
% of Opening
Managed
Accounts AUM
Inflows (net 25.1% 106.1% 2.1% 10.3% 37.1% 228.8%
of
redemptions)
Net 6.7% (20.6%) 1.3% 0.9% 17.5% (17.9%)
Performance
(gains net
of losses)
Note: Net performance is based on both opening AUM and inflows during the
period and can be influenced by heavy inflows and fluctuations in
currencies.
Contacts:
Investors/analysts:
GLG: Simon White,
Chief Financial Officer,
+44(0)20-7016-7000,
;
Michael Hodes,
Acting Director of Investor Relations,
+1-212-224-7223,
.
Media:
Finsbury: Rupert Younger/Amanda Lee,
+44(0)20-7251-3801,
,
;
Andy Merrill,
+1-212-303-7600,
.
DATASOURCE: GLG Partners (GLG)
CONTACT: Contacts: Investors/analysts: GLG: Simon White, Chief
Financial Officer, +44(0)20-7016-7000, ; Michael
Hodes, Acting Director of Investor Relations, +1-212-224-7223,
. Media: Finsbury: Rupert Younger/Amanda Lee,
+44(0)20-7251-3801, , ;
Andy Merrill, +1-212-303-7600, .