GLG hedge fund is latest market casualty

Date: Thursday, August 23, 2007
Author: Kate Burgess, FT.com

GLG European Long-Short fund, one of GLG's biggest hedge funds with more than $2bn (£1bn) in assets, fell 4.4 per cent in value in the first 10 days of August, making it one of the latest casualties of the recent turmoil in financial markets.

The fund, launched in 2000, had risen 13.7 per cent from January to the end of last month, against an in-crease in the MSCI Europe index of 4 per cent.

However, it fell sharply this month in line with a number of long-short hedge funds in the UK and the US.

Many hedge fund strategies have suffered big drops in the past 10 days, including long-short funds and quant-driven funds, whose models have been turned upside down by unprecedented volatility.

These funds have been forced to sell shares into falling markets while buying other stocks in order to cover short positions.

GLG is one of Europe's biggest hedge fund groups with $18.6bn net funds under management in June, spread across several strategies.

This month it reported a 38 per cent rise in assets under management to June against last year.

Net income adjusted for the profit share of partners increased to $139m in the first six months to June, up 89 per cent on the year before.

In June the group announced it would list its shares in New York in the fourth quarter via a reverse takeover of Freedom Acquisitions, a specially created acquisition vehicle formed last year.

Last year, the Financial Services Authority fined the group and Philippe Jabre, its former star manager, for misuse of inside information.