GLG Partners Reports Q4 and 2008 Earnings

GLG Partners, Inc. ("GLG”) (NYSE: GLG), the U.S. listed asset manager, today reported a GAAP net loss attributable to common stockholders of $142.7 million for the quarter ended December 31, 2008 and $629.7 million for the full year 2008. GAAP diluted EPS was ($0.66) for the quarter ended December 31, 2008 and ($2.97) for the full year 2008. As previously disclosed, under GAAP accounting GLG expects to recognize significant and largely non-cash compensation related expenses associated with GLG's reverse acquisition transaction with Freedom Acquisition Holdings in November 2007. Accordingly, the fourth quarter and full year 2008 GAAP net loss resulted primarily from the recognition of $168.1 million and $756.6 million, respectively, of these Acquisition-related compensation expenses. There will be Acquisition-related GAAP compensation expenses quarterly, ending in the fourth quarter of 2013. For further discussion of these largely non cash Acquisition-related charges see below under "Non GAAP Financial Measures".

Non GAAP adjusted net income was $28.2 million, down 78% year-over-year, for the quarter ended December 31, 2008, and $128.0 million, down 57% year-over-year, for 2008. The ratio of non GAAP adjusted net income to non GAAP weighted average fully diluted shares was $0.09 for the quarter ended December 31, 2008, down 76% from a year ago, and $0.41 for the full year 2008, down 53% from the prior year. Non GAAP adjusted net income and non GAAP weighted average fully diluted shares are financial measures not prepared under GAAP. A reconciliation of GAAP net income to non GAAP adjusted net income and average fully diluted shares under GAAP to non GAAP weighted average fully diluted shares is presented below under "Non GAAP Financial Measures”.

"We faced a difficult environment in 2008 on multiple fronts, but we were able to substantially deepen our base of investment talent and broaden our focus as a firm. The acquisition of Société Générale Asset Management UK, which we began to evaluate during the summer of 2008 and which is expected to close in March this year, greatly enhances our long only offering. In addition, we recently announced the planned addition of the investment managers of the Pendragon Funds to our team, and we have been growing our presence in the 130/30 arena,” said Noam Gottesman, Chairman and Co-CEO of GLG. "Although the heightened level of economic uncertainty around the world continues to present both opportunities and challenges, we enjoy considerable flexibility with over $100 million in ‘free cash’ on the balance sheet and the scalable infrastructure to continue to selectively acquire firms and teams of leading investment professionals. GLG is off to a good start in 2009 and we are optimistic about our prospects.”

GLG’s total net assets under management (AUM) as of December 31, 2008 were $15.0 billion (net of assets invested from other GLG managed funds), down 39% from December 31, 2007 and 13% from September 30, 2008. The decline in net AUM over the course of the three months ended December 31, 2008 was largely due to negative performance, slightly offset by net inflows during the period (see Table 2 for a net AUM roll forward). Net inflows of $0.8 billion for the fourth quarter of 2008 include the previously announced redemptions from our emerging markets platform, the funding of the $1.6 billion Banca Fideuram (Intesa Sanpaolo Group) mandate, and the signing of an approximately $3.0 billion Société Générale Asset Management UK ("SGAM UK”) sub-advisory mandate as part of our growing strategic relationship with Société Générale. As previously announced, GLG agreed to acquire SGAM UK, a UK-based long-only asset manager with approximately $8.5 billion in AUM at the end of December 2008, and expects to complete the purchase in March 2009.

GLG’s total gross AUM (including assets invested from other GLG managed funds) were $16.5 billion at December 31, 2008, down 22% from September 30, 2008 and down 43% from December 31, 2007.

Financial and Operational Summary

Net revenues and other income was $72.7 million, down 84% year-over-year, for the quarter ended December 31, 2008, and $495.0 million, down 52% year-over-year, for 2008. These declines reflect mostly reduced performance levels at GLG funds and managed accounts.

Fourth quarter 2008 performance fees decreased 95% from the year ago period to $17.8 million on a combination of fewer GLG funds and managed accounts generating positive performance in the second half of the year and a 12% drop in average net AUM compared to the second half of 2007. It is our policy to recognize performance fees when they crystallize, generally on June 30 and December 31 of each year. Accordingly, the fourth quarter’s performance fees largely reflect second half performance. For 2008, performance fees declined 84% year-over-year to $107.5 million as fewer GLG funds and managed accounts generated positive performance.

Management and administration fees totalled $56.8 million for the quarter ended December 31, 2008, down 48% from the same period last year. This represented an annualized yield of 1.57% of average net AUM when adjusted to exclude the approximately $3.0 billion SGAM UK sub-advisory mandate signed in December 2008, a decline of 38 basis points (bps) compared to the yield in the fourth quarter of 2007. The decrease in management and administration fee yield in the fourth quarter of 2008 is primarily due to the impact of net flows in the second half of 2008 on GLG’s mix of AUM.

For 2008, management and administration fees totalled $386.9 million, a 10% increase from 2007, and represented a yield of 1.90% of average net AUM when adjusted to exclude the approximately $3.0 billion SGAM UK sub-advisory mandate signed in December 2008, an increase of 5 bps compared to 2007. Other income, which largely reflects the currency translation impact on cash held on our balance sheet and a loss on sale of investments of $2.4 million, decreased by $4.1 million from the fourth quarter one year ago resulting in a loss of $1.9 million for the three months ended December 31, 2008. For 2008, other income was $0.5 million, down $9.5 million from 2007.

The total level of non GAAP compensation, benefits and profit share ("CBP”) when expressed as a percentage of revenues dropped 46 percentage points to 11% in the quarter ended December 31, 2008 from the same period last year. In Dollar terms, CBP decreased in the quarter ended December 31, 2008 by 97% from the year ago period to $7.6 million. For full year 2008, CBP was $196.3 million, down 66% year-over-year. Relative to revenues, CBP dropped 15 percentage points to 40% in 2008 versus last year. CBP is a financial measure not prepared under GAAP, and includes compensation, benefits and profit share but excludes Acquisition-related compensation expense described below under "Non GAAP Financial Measures”. GAAP compensation, benefits and profit share for the quarter ended December 31, 2008 decreased to $175.8 million compared to $893.2 million in the same quarter last year. For full year 2008, GAAP compensation, benefits and profit share decreased to $952.9 million relative to $1,211.2 million a year ago. The decrease largely reflected lower discretionary bonus accruals and limited partner profit share based on full year performance. Full year and fourth quarter 2008 GAAP compensation, benefits and profit share and non GAAP CBP included non Acquisition-related share-based compensation of approximately $72.4 million and $67.2 million, respectively. Please note that compensation, benefits and profit share is mostly discretionary and is finalized based primarily on full year performance as at December 31 of each year.

General, administrative, and other expenses for the quarter ended December 31, 2008 increased 6% from the year ago period to $30.9 million, and increased 12% year-over-year for 2008 to $121.7 million. These increases largely reflect additional costs related to GLG’s transition to a public company beginning in the fourth quarter of 2007. Net interest expense was $4.5 million and $16.6 million during the quarter and full year ended December 31, 2008, respectively. Net interest expense largely reflects the cost of borrowings under our term loan and revolving credit facilities offset by interest income on cash balances.

"GLG strengthened operations and risk management in 2008 and we took important steps to more appropriately scale our business and to bolster our positioning regarding counterparty risk,” said Emmanuel Roman, Co-CEO of GLG. "The new teams of professionals we recruited to lead our emerging markets strategies and build out our macro and special situations platforms have been assimilated and are already starting to make a positive mark on GLG. Lastly, we have conducted detailed integration planning and are looking forward to the addition of Société Générale Asset Management UK from next month.”

Capital and Dividends

As of December 31, 2008, there were 245.8 million common shares, 58.9 million FA Sub 2 Limited Exchangeable Shares and 54.5 million warrants outstanding. In the fourth quarter of 2008, no warrants were repurchased or exercised and 1.2 million shares were repurchased for $3.7 million. During 2008, GLG repurchased 7 million warrants for $37.4 million, 1.5 million shares for $7.7 million and 2.1 million warrants were exercised at $7.50 per share for aggregate proceeds of $16.1 million.

In 2009, through February 11, GLG repurchased 28.3 million common shares for $64.3 million, leaving 245.8 million common shares and 58.9 million FA Sub 2 Exchangeable Shares outstanding. Since the inception of GLG’s repurchase program in November 2007 (through February 11, 2009), GLG has repurchased 14.3 million warrants for $82.9 million and 29.8 million shares for $72.0 million and 5.5 million warrants have been exercised at $7.50 per share for aggregate proceeds of $41.4 million.

GLG’s Board of Directors has extended the Company’s stock and warrant repurchase program until August 2009 and approximately $44.8 million remains available. No dividend was declared for the fourth quarter of 2008 following the Board’s decision in December to discontinue paying a regular quarterly dividend on its common stock, in order to retain flexibility given the prevailing economic climate. The Board will consider re-establishing the regular quarterly dividend as well as the payment of a special dividend as and when it determines appropriate in the future.

Investor/Analyst Conference Call and Webcast

GLG will hold a conference call for investors and analysts on Thursday, February 12, 2009 at 9:30 a.m. EST / 2:30 p.m. GMT hosted by Chairman of the Board and Co-Chief Executive Officer, Noam Gottesman, and Chief Financial Officer, Jeffrey Rojek. To participate by telephone, the domestic dial-in number is +1 888 680 0869 and the international dial-in number is +1 617 213 4854. The access code is 55460300. For the replay, which will be available until March 12, 2009, the domestic dial-in number is +1 888 286 8010 and the international dial-in number is +1 617 801 6888. The replay access code is 79343056. The teleconference will also be available via live webcast on GLG's website at www.glgpartners.com.

Participants may pre-register for the call at:

https://www.theconferencingservice.com/prereg/key.process?key=PUDNRM476

(Due to its length, this URL may need to be copied/pasted into your Internet browser's address field. Remove the extra space if one exists.)

Pre-registrants will be issued a pin number to use when dialing into the live call that will provide quick access to the conference by bypassing the operator upon connection.

The webcast will be available for replay on the "Calendar of Events" page of GLG's website until March 12, 2009.

About GLG

GLG is a U.S. listed asset management company offering its base of long-standing prestigious clients a diverse range of alternative and traditional 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 with a growing presence in the traditional long-only investment product market. As of December 31, 2008, GLG managed net AUM of over $15 billion.

Forward-looking Statements

This press release contains statements relating to future results that are "forward-looking statements” as defined in the Private Securities Litigation Reform Act of 1995. 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: the volatility in the financial markets; 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, including counterparty 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, investment in derivatives, availability of credit, interest rates and currency fluctuations; as well as other risks and uncertainties, including those set forth in GLG’s filings with the Securities and Exchange Commission. 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, except as required by law.

Non GAAP Financial Measures

GLG presents certain financial measures that are not prepared in accordance with U.S. generally accepted accounting principles (GAAP), in addition to financial results prepared in accordance with GAAP.

Non GAAP compensation, benefits and profit share: GLG’s management assesses its personnel-related expenses based on the measure non GAAP compensation, benefits and profit share, or non GAAP CBP. Non GAAP CBP reflects GAAP compensation, benefits and profit share adjusted to exclude Acquisition-related compensation expense in connection with the acquisition by Freedom Acquisition Holdings Inc. ("Freedom”) of GLG Partners LP and associated entities.

The majority of the Acquisition-related compensation expense is the result of the accounting for an agreement among certain of the GLG's principals concurrent with the acquisition. Although there were no additional equity shares issued to the principals as a result of the agreement, due to the service conditions contained in the agreement, GAAP requires a charge to compensation as the service conditions are met for the fair value of those shares as of the date of the agreement. Management believes that this non-cash charge to compensation expense does not reflect GLG’s ongoing core business operations and compensation expense and excludes such amounts for assessing GLG’s ongoing core business performance.

GLG subtracts any compensation expense related to dividends paid on unvested shares. Compensation expense is only booked in accordance with SFAS 123(R) on dividends on unvested shares that are ultimately not expected to vest.

Additionally, GLG includes in its Acquisition-related compensation expense any gains or losses realized from investments in GLG funds held by equity participation plan participants.

Non GAAP CBP is not a measure of financial performance under GAAP and should not be considered as an alternative to GAAP compensation, benefits and profit share.

Non GAAP Adjusted Net Income: GLG’s management assesses the underlying performance of its business based on the measure "adjusted net income,” which adjusts GAAP net (loss)/income before minority interest for (1) the Acquisition-related compensation expense, (2) to the extent that GLG records a tax benefit related to Acquisition-related compensation that is tax deductible for GAAP purposes, the impact of that tax benefit in calculating non GAAP adjusted net income, and (3) the cumulative dividends payable to the holders of exchangeable shares of our FA Sub 2 Limited subsidiary in respect of our estimate of the net taxable income of FA Sub 2 Limited allocable to such holders multiplied by an assumed tax rate. Adjusted net income is not a measure of financial performance under GAAP and should not be considered as an alternative to GAAP net (loss)/income as an indicator of GLG’s operating performance or any other measures of performance derived in accordance with GAAP.

Non GAAP Weighted Average Fully Diluted Shares: GLG’s management assesses business performance per share based on the measure "non GAAP weighted average fully diluted shares outstanding,” which adjusts average fully diluted shares outstanding under GAAP for (1) the unvested shares issued pursuant to our equity participation plan, which are recorded under GAAP as treasury shares, but upon which we will pay dividends to the extent we pay them on vested shares; (2) unvested shares awarded under our 2007 Restricted Stock Plan and our 2007 Long-Term Incentive Plan upon which we will pay dividends to the extent we pay them on vested shares; (3) the impact on the weighted average fully diluted shares outstanding of including all of the 69 million outstanding shares of Freedom common stock immediately prior to the closing of the acquisition by Freedom from January 1, 2007 rather than from November 2, 2007; and (4) the impact of including all of the 74 million Freedom warrants as outstanding from January 1, 2007 rather than from November 2, 2007 in determining the weighted average number of warrants outstanding in each period, and applying the treasury stock method to determine the number of fully diluted shares outstanding under such warrants applying the stock price on November 2, 2007 for all dates prior to November 2, 2007. Non GAAP weighted average fully diluted shares is not a measure of financial performance under GAAP and should not be considered as an alternative to GAAP fully diluted shares outstanding or used in calculating GAAP earnings per share.

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 GLG believes that they will be helpful to investors in understanding all components of personnel-related costs of GLG’s business. GLG’s management believes that 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 economic income than does GAAP net (loss)/income primarily because of the adjustments described under "Non GAAP Adjusted Net Income” above. Non GAAP weighted average fully diluted shares is a non GAAP financial measure that GLG uses internally to measure the number of shares on which it expects to pay dividends plus the warrants outstanding under the treasury stock method. In addition, GLG uses these non GAAP financial measures in its evaluation of its core results of operations and trends between fiscal periods and believes these measures are an important component of its internal performance measurement process. GLG also prepares forecasts for future periods on a basis consistent with these non GAAP financial measures.

Investors should consider these non GAAP financial measures in addition to, and not as a substitute for, or superior to, measures of performance prepared in accordance with GAAP. The non GAAP financial measures presented by GLG may be different from financial measures used by other companies.