GLG Partners Inc. Q1 2010 Earnings Call Transcript

GLG Partners Inc. Q1 2010 Earnings Call Transcript
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GLG Partners Inc. (GLG)

Q1 2010 Earnings Call

May 06, 2010 08:30 am ET

Executives

Shirley Chan - Associate of Public Markets

Noam Gottesman - Chairman and Co-CEO

Jeff Rojek - CFO

Analysts

Craig Siegenthaler - Credit Suisse

Roger Freeman - Barclays Capital

Robert Lee - KBW

Presentation

Operator

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Previous Statements by GLG
» GLG Partners Inc. Q3 2009 Earnings Call Transcript
» GLG Partners, Inc. Q2 2009 Earnings Call Transcript
» GLG Partners Inc. Q1 2009 Earnings Call Transcript

Good day ladies and gentlemen and welcome to the first quarter 2010 GLG Partners Incorporated earnings conference call. My name is Chris and I'll be your operator for today. At this time all participants are in a listen-only mode. Later we will conduct a question-and-answer session. (Operator Instructions) As a reminder, this conference is being recorded for replay purposes.

I would now like to turn the conference over to our host for today Ms. Shirley Chan, Associate of Public Markets. Please proceed.

Shirley Chan

Good morning everyone and thank you for joining us for GLG's first quarter 2010 Investors and Analysts Conference Call. On the call with me today is Noam Gottesman our Chairman and Co-CEO; Jeff Rojek our Chief Financial Officer; and Michael Hodes, Director of Public Markets.

Earlier today we issued a press release announcing our financial results for the first quarter 2010, following our prepared remarks from the quarter we will open the call to Q&A. I would like to point out that during the course of this conference call, we may make a number of forward-looking statements.

These forward-looking statements are subject to various risks and uncertainties and there are important factors that could cause actual outcomes to differ materially from those indicated in these statements. Some of these factors are described in the Risk Factors section of our filings with the SEC. I want to remind you that GLG assumes no obligation to update or revise the forward-looking statements whether as a result of new information, future events or otherwise unless required by law.

I would also like to remind everyone that, in addition to financial results prepared in accordance with US GAAP, GLG presents certain financial measures such as non-GAAP adjusted net income, non-GAAP weighted average fully diluted shares and non-GAAP compensation, benefits and profit share which are not prepared in accordance with the US GAAP.

A reconciliation of these non-GAAP financial measures to GAAP is provided in our Q1 earnings release a copy of which is available on our Investor Relations website and has also been furnished with the SEC in our Form 8-K.

GLG maintains an IR website at www.glgpartners.com where important information is ritually posted for our investors. We also use our website as means of disclosing material, non-public information and for complying with disclosure obligations under Reg FD promulgated by the SEC. These material disclosures will be included on our IR website under the overview section. Investor should monitor this portion of GLG's website in addition to following with press releases, SEC filings and other conference calls and webcast.

Finally, I would like to mention it is not intended to be an offer or presentation for investment in GLG Partners Inc or any particular GLG fund. I will now turn the call over to Noam, for an overview of the quarter

Noam Gottesman

Good morning. We are pleased at the opportunity to speak with you to summarize our 3Q highlight. We continue to achieve excellent performance across the board for our investing clients. Net inflows are accelerating and the outlook for close of increasing the (inaudible) and we remain in the strong competitive position ready to enjoy the benefits of operational leverage.

In terms of investment performance, we delivered across a wide range of strategy and asset costs. Specifically, our alternatives are up 5.3% for the third quarter, 6.9% for the year-to-date through April 30th and 28.1% for the full year 2009. Strong performance have continued to validate the merit of investing for absolute returns. Importantly, high water mark are now largely behind us in alternatives as Jeff will outline shortly.

Our 130/30 were up 6.2% for the quarter, 8% for the year-to-date through April and 33.6% for the full year 2009. Our long-only products were 6.1% for the quarter, 5.9% for the year-to-date through April and 29.6% for the full year 2009. Details of these returns were calculated can be found in our press release of today.

Our multi-strategy approach continues to generate a broad range of investment opportunities and the re-conduct (inaudible) volatility is generally a positive for us. We are pleased with the performance in our long-short funds, in particular our emerging market, North America funds in addition to our macro distressed debt convertible and Japan focused strategies and we have every confidence that our talented team of professionals will continue to serve our clients well.

The pacing and scale of this cycle of inflows remains difficult to forecast but we believe it has definitely begun and are optimistic about our prospects. The response from both existing and potential clients for our investing products and performance has been positive with our quarterly organic net flows accelerating in the past three quarters.

Looking back on an organic basis, we saw peak net outflows in late 2008 then stability in the first half of 2009 with long-only and managed account inflows offsetting modest outflows and alternative funds followed by a trend of increasingly positive sequential net inflows for the third quarter of 2009, the fourth quarter of 2009 and now the first quarter of 2010. More specifically, in the first quarter of 2010 we saw net inflows of $954 million from a variety of our strategies with particularly strong showing in our UCITS III products. This follows positive net inflows of 216 million in the third quarter of 2009 and 723 million in the fourth quarter of 2009.

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