U.K. Hedge Fund Eyes U.S. Float

Political resistance and shakiness in the credit markets are not preventing hedge funds and private equity from sussing out ways to tap the U.S. public equity market.

U.K.-based hedge fund GLG Partners is selling 28% of itself in a reverse merger with Freedom Acquisition Holding (FRH) -- the latest move by an alternative investment shop to set its sights on a public listing. The deal comes on the heels of Blackstone Group's(BX) $4.1 billion IPO on June 22.

In a reverse merger, a private company becomes publicly traded without having an IPO by buying enough shares in a publicly traded company.

Under terms of the $3.4 billion deal, GLG's owners will receive $1 billion cash and 230 million shares of the shell company Freedom Holdings, which equates to a 72% stake worth about $2.4 billion. Freedom Holdings, which will be renamed GLG Partners Inc. and trade under the ticker symbol GLG, was formed and funded solely for the purpose of acquiring other companies that have not yet been identified.

And GLG, which has about $20 billion under management, isn't the only big U.K. hedge fund firm trying to gain a foothold in the U.S. The world's largest listed hedge fund company, U.K.-based Man Group, with some $61 billion under management, wants to publicly offer shares in a long-short investment vehicle to be based in Chicago known as Man Dual Absolute Return Fund.