Deal to let hedge fund firm go public in US
LONDON -- GLG Partners LP, Europe's third-largest hedge fund manager, will go public in the United States through a $3.4 billion combination with Freedom Acquisition Holdings Inc.
GLG will sell a minority stake to the publicly traded New York-based investment company for $1 billion and 230 million shares. The so-called reverse merger will create a new company called GLG Partners Inc., which will trade on the New York Stock Exchange, the London-based fund manager said yesterday.
GLG, run by co founder Noam Gottesman, joins Fortress Investment Group LLC and Blackstone Group LP in going public in the United States. Blackstone, a buyout firm that owns companies with about 375,000 employees and $83 billion in annual sales, raised $4.13 billion last week in the largest U S initial public offering in five years.
GLG's bets on emerging markets, bonds, and European stocks helped its funds return twice as much as rivals last year. The company earned $360 million on revenue of $621 million, and distributed $201 million in shared profits to partners and staff.
The company, which oversees more than $20 billion, has also faced regulatory probes in France and Britain. Paris-based Autorite des Marches Financiers fined GLG $2 million last week for trading on inside information before a 2002 Vivendi Universal SA securities sale , its second penalty this year. GLG plans to appeal both fines.
Britain's watchdog fined GLG and 47-year-old former director Philippe Jabre $1.5 million each last year for allegedly trading on privileged information before a Sumitomo Mitsui Financial Group Inc. convertible bond sale in 2003.
Freedom, founded by former hedge fund manager Nicolas Berggruen, was set up last year as a so-called blank check company to make acquisitions. Its listing on the American Stock Exchange will be transferred to the NYSE after the merger, under the ticker GLG. Shareholders of GLG will own about 72 percent of the combined company and Freedom investors will own the rest. GLG may seek a dual listing in Europe.
The transaction was an "extremely effective method" for GLG to become a public company while minimizing the "management disruption" typical of preparing a listing, said Gottesman.
