GLG Partners Reports Q3 2008 Earnings

GLG Partners, Inc. (NYSE: GLG), a leading alternative asset manager, today reported a GAAP net loss attributable to common stockholders of $167.1 million for the quarter ended September 30, 2008 and $487.0 million for the first nine months of fiscal 2008. GAAP diluted EPS was ($0.79) for the quarter ended September 30, 2008 and ($2.30) for the first nine months of fiscal 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 third quarter 2008 GAAP net loss resulted primarily from the recognition of $188.0 million of these compensation related 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 $21.8 million, down 24.8% year-over-year, for the quarter ended September 30, 2008 and $99.9 million, down 40.4% year-over-year, for the first nine months of fiscal 2008. The ratio of non GAAP adjusted net income to non GAAP weighted average fully diluted shares was $0.07 for the quarter ended September 30, 2008, down 22.2% year-over-year, and $0.31 for the first nine months of fiscal 2008, down 38.0% year-over-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”.

"The global financial markets’ performance during recent months represents truly historical events. We have seen record volatility levels, massive deleveraging, the failure of prominent financial institutions and substantial government intervention,” explained Noam Gottesman, Chairman and Co-CEO of GLG. "Our systems and control process have worked well in this environment. We have been de-levering our portfolios, reducing our risk exposures and building liquidity throughout this period. We are planning for the global markets to remain volatile and we believe we are positioned to take advantage of the global investment and strategic opportunities that this environment is likely to present.”

GLG’s net assets under management (AUM) as of September 30, 2008 were $17.3 billion (net of assets invested from other GLG managed funds), down 15.6% from September 30, 2007 and down 27.0% from net AUM as of June 30, 2008. The decline in net AUM over the course of the three months ending September 30, 2008 was roughly half performance driven with the remaining portion, $3.3 billion, due to $1.3 billion of redemptions from the Emerging Market Funds, $0.9 billion of redemptions in other GLG Funds and $1.1 billion from the impact of the Dollar strengthening (see Table 1 for a net AUM roll forward). GLG’s gross AUM (including assets invested from other GLG managed funds) were $21.2 billion at September 30, 2008, down 24.2% from June 30, 2008 and down 10.3% from September 30, 2007. Please note that an approximately $1.6 billion initial investment mandate awarded to GLG from the Asset Management Division of Banca Fideuram (Intesa Sanpaolo Group) was funded in October. The difference between the $1.6 billion and the $3.0 billion we had originally announced last May is entirely attributable to the effect of market depreciation and the strengthening of the dollar on the predecessor long only portfolios that were the source of the capital underlying the mandate.

*Inflows (net of redemptions) for the three months and nine months ended September 30, 2008 are inclusive of $1.3 billion and $1.6 billion, respectively, in redemptions associated with our Emerging Market Funds.

Note: Performance as a percentage of opening net AUM is based on both opening AUM and inflows and outflows during the period and can be influenced by heavy inflows or outflows.

Financial and Operational Summary

For the quarter ended September 30, 2008, net revenues and other income were roughly flat at $102.1 million compared to $102.6 million for the same quarter in 2007, reflecting slightly higher average net AUM levels offset by the impact of the U.S. dollar strengthening on fees and cash balances. Net revenues and other income for the first nine months of 2008 decreased by 28.9%, year-over-year, to $422.3 million, largely on lower levels of performance fees.

Performance fees were modest at $6.8 million in the quarter ended September 30, 2008, reflecting crystallization on certain managed accounts. It is our practice to recognize performance fees when they crystallize, generally on June 30 and December 31 of each year. Accordingly, the fourth quarter’s performance fees will largely reflect crystallized performance for the second half of the year. For the first nine months of 2008, performance fees declined 73.9% year over year to $89.8 million.

Management and administration fees totalled $98.1 million, or 1.9% of average net AUM, for the quarter ended September 30, 2008, an increase of 3.4% and a decrease of 3 basis points (bps), respectively, compared to the quarter ended September 30, 2007. For the first nine months of 2008, management and administration fees totalled $330.1 million, or 2.0% of average net AUM, increases of 36.5% and 12 bps, respectively, compared to the first nine months of 2007. Other income, which primarily reflects the currency translation impact on cash held on our balance sheet, decreased by $9.7 million from the year ago third quarter resulting in a loss of $2.8 million for the three months ended September 30, 2008. For the first nine months of 2008, other income was a positive $2.4 million, down $5.5 million from the same period last year.

The total level of non GAAP compensation, benefits and profit share ("CBP”) when expressed as a percentage of revenues dropped 623 bps to 38.6% in the quarter ended September 30, 2008 from the same period last year. In dollar terms, CBP decreased in the quarter ended September 30, 2008 by 14.3% from the year ago period to $39.4 million. For the first nine months of 2008, CBP was $188.6 million, down 40.7% year over year. Relative to revenues, CBP dropped 891 bps to 44.7% for the first nine months of 2008 versus the same period 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 September 30, 2008 increased to $227.4 million compared to $46.0 million in the same quarter last year. For the first nine months of 2008, GAAP compensation, benefits and profit share increased to $777.1 million relative to $318.0 million in the same period a year ago. The increase largely reflected the impact of recognizing Acquisition-related compensation expenses during the period for which there was no corresponding charge in the prior period, offset by lower discretionary bonus accruals and limited partner profit share due to performance declines. Please note that compensation, benefits and profit share is mostly discretionary and is finalized based primarily on full year performance as at December 31.

General, administrative, and other expenses for the quarter ended September 30, 2008 increased 17.0% from the year ago period to $30.3 million, and increased 14% year over year for the first nine months of 2008 to $90.8 million. The increase reflects additional public company costs as well as growth in the scale of our operations. Net interest expense was $4.0 million and $12.1 million during the three and nine months ended September 30, 2008, respectively. Net interest expense largely reflects the cost of borrowings under our term loan and revolving credit facilities.

"While this has been a challenging quarter for our business, we continue to plan for the medium to long term and build the strength of our franchise,” said Emmanuel Roman, Co-CEO and Managing Director of GLG. "Our focus during the quarter has been threefold – an absolute focus on managing the portfolios to the best of our ability in these unprecedented market conditions; continued focus on driving through cost efficiencies and delivering improvements in client service; and investing in our team of talented professionals.”

Capital and Dividends

As of September 30, 2008, there were 245.8 million common shares, 58.9 million FA Sub 2 Limited Exchangeable Shares, and 54.5 million warrants outstanding. No warrants were repurchased or exercised during the third quarter of 2008. During the first nine months of 2008, GLG repurchased 7.0 million warrants for $37.4 million and 0.3 million shares for $4.0 million and 2.1 million warrants were exercised at $7.50 per share for aggregate proceeds of $16.1 million. Since November 2, 2007 (through November 6, 2008), GLG has repurchased 14.3 million warrants for $82.9 million and 0.3 million shares for $4.0 million and 5.5 million warrants have been exercised at $7.50 per share generating aggregate proceeds of $41.4 million.

Approximately $117.0 million remains available under the Company’s stock and warrant repurchase program through February 4, 2009.

GLG paid a regular quarterly dividend of $0.025 per share on October 21, 2008 to holders of record as of October 10, 2008.

Investor/Analyst Conference Call and Webcast

GLG will hold a conference call for investors and analysts on Monday, November 10, 2008 at 8:30 a.m. EST / 1:30 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 +1 888 713 4199 and the international dial-in number is +1 617 213 4861. The access code is 28455171. For the replay, which will be available until December 10, 2008, 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 44907158. 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= PCTP367GD

(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 December 10, 2008.

About GLG

GLG, one of the largest alternative asset managers in the world, offers its base of long-standing prestigious clients a diverse range of 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, while maintaining its tradition of client-focused product development and customer service. As of September 30, 2008, GLG managed net AUM of over $17 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, the use of derivatives, 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 is the result of the accounting for an agreement among certain of the Company'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 our ongoing core business operations and compensation expense and excludes such amounts for assessing our ongoing core business performance.

Additionally, 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.

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; (2) unvested shares awarded under our 2007 Restricted Stock Plan and our 2007 Long-Term Incentive Plan upon which we will pay dividends; (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, 2006 rather than from November 2, 2007; and (4) the impact of including all of the 74 million Freedom warrants as outstanding from January 1, 2006 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 profits available for distribution to stockholders than does GAAP net (loss)/income. 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.

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.