##### Table of Contents



UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
 Washington, D.C. 20549
 FORM 10-Q
 þ
    
    QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
 For the Quarterly Period Ended March 31, 2009
 OR
 o
    
    TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
 For the Transition Period from  to
 Commission File Number: 001-33217
 GLG PARTNERS, INC.
  Delaware
    
    20-5009693(State or other jurisdiction of 
incorporation or organization)
    
    (I.R.S. Employer Identification No.)
 399 Park Avenue, 38th Floor
New York, New York 10022
 (212) 224-7200
 þ o
 o o
  Large accelerated filer þ
    
    Accelerated filer o
    
    Non-accelerated filer   o
(Do not check if a smaller reporting company)
    
    Smaller reporting company o
 o þ




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##### Table of Contents



FORWARD-LOOKING STATEMENTS
   §
    
    the volatility in the financial markets;§

    
    our financial performance;§

    
    market conditions for the investment funds we manage, which we refer to as the GLG
Funds;§

    
    performance of GLG Funds, the related performance fees and the associated impacts on
revenues, net income, cash flows and fund inflows and outflows;§

    
    the cost of retaining our key investment and other personnel or the loss of such key
personnel;§

    
    risks associated with the expansion of our 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 our resources; and§

    
    risks associated with the use of leverage, investment in derivatives, availability of
credit, interest rates and currency fluctuations,
  i




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##### 



GLG PARTNERS, INC.
INDEX
 PAGEPART I. FINANCIAL INFORMATIONItem 1. Financial Statements (unaudited):
    
    
    1Unaudited Condensed Consolidated Balance Sheets  March 31, 2009
and March 31, 2008
    
    
    1Unaudited Condensed Consolidated Statements of Operations 
Three Months Ended March 31, 2009 and March 31, 2008
    
    
    2Unaudited Condensed Consolidated Statements of Changes in
Stockholders Deficit  Three Months Ended March 31, 2009
    
    
    3Unaudited Condensed Consolidated Statements of Cash Flows 
Three Months Ended March 31, 2009 and March 31, 2008
    
    
    4Notes to the Unaudited Condensed Consolidated Financial Statements
    
    
    5Item 2. Managements Discussion and Analysis of Financial Condition and
Results of Operations
    
    
    22Item 3. Quantitative and Qualitative Disclosures About Market Risk
    
    
    49Item 4. Controls and Procedures
    
    
    52PART II. OTHER INFORMATIONItem 1. Legal Proceedings
    
    
    53Item 1A. Risk Factors
    
    
    53Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
    
    
    78Item 6. Exhibits
    
    
    79Signature
    
    
    80EX-10.4.1EX-10.4.2EX-10.5.1EX-10.5.2EX-31.1EX-31.2EX-31.3EX-32.1EX-32.2EX-32.3
  ii




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##### Table of Contents



PART I. FINANCIAL INFORMATION
 
 Item 1. Financial Statements (unaudited)
 GLG
PARTNERS, INC. AND SUBSIDIARIES
 
 UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS
(US Dollars in thousands)
 March 31,
    
    
    December 31,2009
    
    
    2008ASSETSCurrent AssetsCash and cash equivalents
    
    $
    215,275
    
    
    $
    316,195Restricted cash
    
    
    13,350
    
    
    
    13,315Fees receivable
    
    
    33,647
    
    
    
    42,106Prepaid expenses and other assets
    
    
    36,702
    
    
    
    32,751Total Current Assets
    
    
    298,974
    
    
    
    404,367Non-Current AssetsInvestments at fair value
    
    
    29,300
    
    
    
    65,484Goodwill
    
    
    587
    
    
    
    587Property and equipment (net of accumulated depreciation and amortization
of $12,448 and $11,505 respectively)
    
    
    13,398
    
    
    
    14,076Other non-current assets
    
    
    3,527
    
    
    
    3,868Total Non-Current Assets
    
    
    46,812
    
    
    
    84,015Total Assets
    
    $
    345,786
    
    
    $
    488,382LIABILITIES AND STOCKHOLDERS DEFICITCurrent LiabilitiesRebates and sub-administration fees payable
    
    $
    22,035
    
    
    $
    26,234Accrued compensation, benefits and profit share
    
    
    50,102
    
    
    
    148,531Income taxes payable
    
    
    13,959
    
    
    
    15,633Distributions payable
    
    
    4,616
    
    
    
    7,592Accounts payable and other accruals
    
    
    39,569
    
    
    
    47,176Revolving credit facility
    
    
    40,000
    
    
    
    40,000Other liabilities
    
    
    27,673
    
    
    
    50,765Total Current Liabilities
    
    
    197,954
    
    
    
    335,931Non-Current LiabilitiesLoan payable
    
    
    530,000
    
    
    
    530,000Total Non-Current Liabilities
    
    
    530,000
    
    
    
    530,000Total Liabilities
    
    
    727,954
    
    
    
    865,931Stockholders Deficit:Common stock, $.0001 par value; 1,000,000,000 authorized, 2009: 246,504,294
issued and outstanding (2008: 245,784,390 issued and
outstanding)
    
    
    24
    
    
    
    24Series A voting preferred stock, $.0001 par value; 150,000,000
authorized, 2009: 58,904,993 issued and outstanding (2008: 58,904,993
issued and outstanding)
    
    
    6
    
    
    
    6Additional paid in capital
    
    
    1,274,971
    
    
    
    1,176,054Treasury stock, 2009: 21,418,568 shares of common stock (2008: 21,418,568)
    
    
    (293,434
    )
    
    
    (293,434
    )Accumulated other comprehensive income
    
    
    3,951
    
    
    
    (17,141
    )Accumulated deficit
    
    
    (1,363,317
    )
    
    
    (1,243,058
    )Total Controlling Stockholders Deficit
    
    
    (377,799
    )
    
    
    (377,549
    )Non-controlling interest
    
    
    (4,369
    )
    
    
    Total Stockholders Deficit
    
    $
    (382,168
    )
    
    $
    (377,549
    )Total Liabilities and Stockholders Deficit
    
    $
    345,786
    
    
    $
    488,382
  1




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##### Table of Contents



GLG
PARTNERS, INC. AND SUBSIDIARIES
 
 UNAUDITED CONDENSED CONSOLIDATED
STATEMENTS OF OPERATIONS
(US Dollars in thousands, except per share amounts)
 Three
Months EndedMarch 31,2009
    
    
    2008Net revenues and other incomeManagement fees, net
    
    $
    34,427
    
    
    $
    98,756Performance fees, net
    
    
    10,817
    
    
    
    4,735Administration fees, net
    
    
    5,473
    
    
    
    22,248Other
    
    
    997
    
    
    
    5,641Total net revenues and other income
    
    
    51,714
    
    
    
    131,380ExpensesEmployee compensation and benefits
    
    
    (138,014
    )
    
    
    (287,935
    )Limited partner profit share
    
    
    (8,643
    )
    
    
    (25,104
    )Compensation, benefits and profit share
    
    
    (146,657
    )
    
    
    (313,039
    )General, administrative and other
    
    
    (22,317
    )
    
    
    (30,303
    )Total expenses
    
    
    (168,974
    )
    
    
    (343,342
    )Loss from operations
    
    
    (117,260
    )
    
    
    (211,962
    )Realized loss on available-for-sale investments
    
    
    (21,217
    )
    
    
    Interest income
    
    
    357
    
    
    
    3,086Interest expense
    
    
    (2,947
    )
    
    
    (7,129
    )Loss before income taxes
    
    
    (141,067
    )
    
    
    (216,005
    )Income taxes
    
    
    (618
    )
    
    
    (6,200
    )Net loss
    
    
    (141,685
    )
    
    
    (222,205
    )Less non-controlling interests:Cumulative dividends on exchangeable shares
    
    
    (595
    )
    
    
    (4,129
    )Share of loss
    
    
    22,021
    
    
    
    Net loss attributable to common stockholders
    
    $
    (120,259
    )
    
    $
    (226,334
    )Net loss per share  basic
    
    $
    (0.55
    )
    
    $
    (1.07
    )Weighted average common stock outstanding  basic (in
thousands)
    
    
    216,764
    
    
    
    211,167Net loss per share  diluted
    
    $
    (0.55
    )
    
    $
    (1.07
    )Weighted average common stock outstanding diluted (in
thousands)
    
    
    216,764
    
    
    
    211,167
  2




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##### Table of Contents



GLG
PARTNERS, INC. AND SUBSIDIARIES
 
 UNAUDITED CONDENSED CONSOLIDATED
STATEMENTS OF CHANGES IN STOCKHOLDERS DEFICIT
(US Dollars in thousands)
 AccumulatedAdditional
    
    
    
    
    
    
    Other
    
    
    
    
    
    
    
    
    
    
    TotalTreasury
    
    
    Common
    
    
    Paid in
    
    
    Preferred
    
    
    Comprehensive
    
    
    Accumulated
    
    
    Non-controlling
    
    
    shareholdersStock
    
    
    Stock
    
    
    Capital
    
    
    Stock
    
    
    Income/(Deficit)
    
    
    Income/(Deficit)
    
    
    Interest
    
    
    Equity/(Deficit)Balance as of December 31, 2008
    
    $
    (293,434
    )
    
    $
    24
    
    
    $
    1,176,054
    
    
    $
    6
    
    
    $
    (17,141
    )
    
    $
    (1,241,758
    )
    
    $
    
    
    
    $
    (376,249
    )Effect of adoption of FAS 141R (note 2)
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (1,300
    )
    
    
    
    
    
    
    (1,300
    )Balance as of December 31, 2008 restated
    
    $
    (293,434
    )
    
    $
    24
    
    
    $
    1,176,054
    
    
    $
    6
    
    
    $
    (17,141
    )
    
    $
    (1,243,058
    )
    
    $
    
    
    
    $
    (377,549
    )Comprehensive lossNet loss
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (120,259
    )
    
    
    (22,021
    )
    
    
    (142,280
    )Unrealized gains on cash flow hedges
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    389
    
    
    
    
    
    
    
    93
    
    
    
    482Unrealized loss on
available-for-sale equity
investments (nil tax applicable)
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (423
    )
    
    
    
    
    
    
    
    
    
    
    (423
    )Transfer to realized loss on
available-for-sale equity
investments on disposal (nil tax
applicable)
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    10,345
    
    
    
    
    
    
    
    
    
    
    
    10,345Transfer to realized loss on
available-for-sale equity
investments on other than temporary
impairment (nil tax applicable)
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    10,872
    
    
    
    
    
    
    
    
    
    
    
    10,872Foreign currency translation (nil
tax applicable)
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (91
    )
    
    
    
    
    
    
    (22
    )
    
    
    (113
    )Total comprehensive loss
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    21,092
    
    
    
    (120,259
    )
    
    
    (21,950
    )
    
    
    (121,117
    )Share based compensation
    
    
    
    
    
    
    
    
    
    
    99,066
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    17,581
    
    
    
    116,647Capital contributions
    
    
    
    
    
    
    
    
    
    
    (21
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (21
    )Issue of new shares
    
    
    
    
    
    
    
    
    
    
    64,220
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    64,220Shares repurchased
    
    
    
    
    
    
    
    
    
    
    (64,348
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (64,348
    )Balance as of March 31, 2009
    
    $
    (293,434
    )
    
    $
    24
    
    
    $
    1,274,971
    
    
    $
    6
    
    
    $
    3,951
    
    
    $
    (1,363,317
    )
    
    $
    (4,369
    )
    
    $
    (382,168
    )
  3




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##### Table of Contents



GLG PARTNERS, INC. AND SUBSIDIARIES
 
 UNAUDITED CONDENSED CONSOLIDATED
STATEMENTS OF CASH FLOWS
(US Dollars in thousands)
 Three
Months Ended March 31,2009
    
    
    2008Cash Flows From Operating ActivitiesNet loss
    
    $
    (141,685
    )
    
    $
    (222,205
    )Adjustments to reconcile net loss to net cash (used
in)/provided by operating activities:Depreciation and amortization
    
    
    964
    
    
    
    536Share based compensation
    
    
    116,647
    
    
    
    247,222FX movements on cash held in foreign currency bank accounts
    
    
    (796
    )
    
    
    (1,570
    )Realized loss on available-for-sale investments
    
    
    21,217
    
    
    
    Cash flows due to changes in:Fees receivable
    
    
    8,459
    
    
    
    338,392Prepaid expenses and other assets
    
    
    (3,128
    )
    
    
    352Rebates and sub-administration fees payable
    
    
    (4,199
    )
    
    
    (4,581
    )Accrued compensation, benefits and profit share
    
    
    (34,209
    )
    
    
    (376,563
    )Income taxes payable
    
    
    (1,674
    )
    
    
    (5,747
    )Distributions payable
    
    
    (3,571
    )
    
    
    3,990Accounts payable and other accruals
    
    
    (7,607
    )
    
    
    12,513Other liabilities
    
    
    (23,092
    )
    
    
    13,559Net cash (used in)/ provided by operating activities
    
    
    (72,674
    )
    
    
    5,898Cash Flows From Investing ActivitiesRedemption of available-for-sale securities
    
    
    35,748
    
    
    
    Purchase of subsidiary
    
    
    
    
    
    
    (2,500
    )Transfer to restricted cash
    
    
    (35
    )
    
    
    (33
    )Purchase of property and equipment
    
    
    (286
    )
    
    
    (723
    )Net cash provided by/(used in) investing activities
    
    
    35,427
    
    
    
    (3,256
    )Cash Flows From Financing ActivitiesWarrant exercises
    
    
    
    
    
    
    2,567Warrant repurchases
    
    
    
    
    
    
    (37,582
    )Share repurchases
    
    
    (64,348
    )
    
    
    (3,457
    )Capital contributions
    
    
    (21
    )
    
    
    47Acquisition-related transaction costs
    
    
    
    
    
    
    (308
    )Distributions to principals and trustees
    
    
    
    
    
    
    (100,000
    )Net cash used in financing activities
    
    
    (64,369
    )
    
    
    (138,733
    )Net decrease in cash and cash equivalents
    
    
    (101,616
    )
    
    
    (136,091
    )Effect of foreign currency translation on cash
    
    
    696
    
    
    
    1,208Cash and cash equivalents at beginning of period
    
    
    316,195
    
    
    
    429,422Cash and cash equivalents at end of period
    
    $
    215,275
    
    
    $
    294,539
  4




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##### Table of Contents



GLG PARTNERS, INC. AND SUBSIDIARIES
 
 NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED
FINANCIAL STATEMENTS
(US Dollars in thousands, except per share amounts)
 1. ORGANIZATION AND BASIS OF PRESENTATION
       5




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GLG PARTNERS, INC. AND SUBSIDIARIES
NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED
FINANCIAL STATEMENTS
(US Dollars in thousands, except per share amounts) (contd)
 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
 Change in Accounting Policy
 Business
Combinations
  December 31,
    
    December 31,2008
    
    2008
    
    ChangeAdjusted(1)
    
    As filedBalance sheetAssets:Prepaid expenses and other assets
    
    $
    32,751
    
    
    $
    34,051
    
    
    $
    (1,300
    )Stockholders Deficit:Accumulated deficit
    
    $
    (1,243,058
    )
    
    $
    (1,241,758
    )
    
    $
    1,300Statement of OperationsConsolidated net loss
    
    $
    (630,997
    )
    
    $
    (629,697
    )
    
    $
    1,300
 
 (1)
    
    December 31, 2008 was adjusted for comparability purposes to adjust for acquisition costs
related to the acquisition of SGAM UK which was signed in December 2008 and completed in
April 2009. Certain acquisition related costs were incurred in 2008. Principles of consolidation
  Determining Whether a
General Partner, or the General Partners as a Group, Controls a Limited Partnership or Similar
Entity When the Limited Partners Have Certain Rights
 Consolidation of Variable Interest Entities
 6




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GLG PARTNERS, INC. AND SUBSIDIARIES
NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED
FINANCIAL STATEMENTS
(US Dollars in thousands, except per share amounts) (contd)
 Non-controlling interests in consolidated subsidiaries
 FA Sub 2 Limited Exchangeable Shares
    Non-controlling Interests
in Consolidated Financial Statements  an amendment of ARB No. 51
 Use of Estimates
  Revenue Recognition
  Accounting for Management Fees Based on a Formula
 7




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GLG PARTNERS, INC. AND SUBSIDIARIES
NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED
FINANCIAL STATEMENTS
(US Dollars in thousands, except per share amounts) (contd)
   Reporting Revenue Gross as a Principal versus Net as an Agent
    
    
    management fees are charged at the investee fund level, except in the case of (1) an
investment by the GLG Emerging Markets Fund in the GLG Emerging Markets (Special Assets)
Fund where management fees are charged only at the investing fund level and (2) the GLG
Multi Strategy Fund where fees are charged at both the investee and investing fund levels;
    
    performance fees are charged at the investee fund level, except in the case of (1) an
investment by the GLG Emerging Markets Fund in the GLG Emerging Markets (Special Assets)
Fund where performance fees are charged only at the investing fund level and (2) the GLG
Global Aggressive Fund where fees are charged at both the investee and investing fund
levels, to the extent, if any, that the performance fee charged at the investing fund is
greater than the performance fee charged at the investee fund level; and
    
    administration fees are charged at both the investing and investee fund levels.
  8




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GLG PARTNERS, INC. AND SUBSIDIARIES
NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED
FINANCIAL STATEMENTS
(US Dollars in thousands, except per share amounts) (contd)
 Employee Compensation and Benefits
  
    
    Base compensation  contractual compensation paid to employees in the form of base
salary, which is expensed as incurred.
    
    Variable compensation  payments that arise from the contractual entitlements of
personnel to a fixed percentage of certain variable fee revenues attributable to such
personnel with respect to GLG Funds and managed accounts. The liability for variable
compensation is a formulaic obligation calculated by reference to and payable following
the crystallization of fee revenues at the end of each fee period, which may be monthly or
semi-annually (on June 30 and December 31), depending on the fee revenue source.
    
    Discretionary compensation  payments that are determined by the Companys management
in its sole discretion and are generally linked to performance. In determining such
payments, the Companys management considers, among other factors, the ratio of total
discretionary compensation to total revenues; however, this ratio may vary between periods
and, in particular, significant discretionary bonuses may still be paid in a period of low
performance for retention and incentivization purposes. This discretionary compensation is
paid to employees in the form of a discretionary bonus. Discretionary compensation is
generally declared and paid following the end of each calendar year. However, the
estimated discretionary compensation liability charge is adjusted monthly based on the
year-to-date profitability and revenues recognized on a year-to-date basis. As the
majority of funds crystallize their performance fees at June 30 and December 31, the
majority of discretionary compensation expense crystallizes at year end and is typically
paid in January and February following year end.
 Limited Partner Profit Share
   9




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GLG PARTNERS, INC. AND SUBSIDIARIES
NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED
FINANCIAL STATEMENTS
(US Dollars in thousands, except per share amounts) (contd)
  Derivatives and Hedging
   
 Investments
 Accounting for Certain Investments in Debt and Equity Securities
   10




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GLG PARTNERS, INC. AND SUBSIDIARIES
NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED
FINANCIAL STATEMENTS
(US Dollars in thousands, except per share amounts) (contd)
   Net Loss per share of Common Stock
 Earnings
Per Share
  Three
Months EndedMarch 31,2009
    
    2008Net loss applicable to common stockholders
    
    $
    (120,259
    )
    
    $
    (226,334
    )Weighted-average common stock outstanding (in thousands), basic
    
    
    216,764
    
    
    
    211,167Net loss per share applicable to common stockholders  basic
    
    $
    (0.55
    )
    
    $
    (1.07
    )Weighted-average common stock outstanding (in thousands), diluted
    
    
    216,764
    
    
    
    211,167Net loss per share applicable to common stockholders  diluted
    
    
    (0.55
    )
    
    
    (1.07
    )
 11




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GLG PARTNERS, INC. AND SUBSIDIARIES
NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED
FINANCIAL STATEMENTS
(US Dollars in thousands, except per share amounts) (contd)
  Three
Months EndedMarch 31,2009
    
    2008Common stock held in Treasury
    
    
    21,419
    
    
    
    25,383FA Sub 2 Limited Exchangeable Shares
    
    
    58,905
    
    
    
    58,905Common stock awarded in connection with
share-based compensation arrangements
    
    
    9,107
    
    
    
    10,675Public Warrants
    
    
    32,985
    
    
    
    32,985Co-investment Warrants
    
    
    5,000
    
    
    
    5,000Sponsors Warrants
    
    
    4,500
    
    
    
    4,500131,916
    
    
    
    137,448
  Recent Accounting Pronouncements
  Business Combinations
 12




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GLG PARTNERS, INC. AND SUBSIDIARIES
NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED
FINANCIAL STATEMENTS
(US Dollars in thousands, except per share amounts) (contd)
 Fair Value Measurements Accounting for Leases Determining Fair Value in
a Market That Is Not Active
 Disclosures about Derivative Instruments and
Hedging Activities an amendment of FASB Statement No. 133
 Determining Whether Instruments Granted in
Share-Based Payment Transactions Are Participating Securities Earnings per
Share.
 Disclosures by Public
Entities (Enterprises) about Transfers of Financial Assets and Interests in Variable Interest
Entities,
 Determination of the Useful Life of Intangible Assets Goodwill and Other Intangible Assets
 13




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##### Table of Contents



GLG PARTNERS, INC. AND SUBSIDIARIES
NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED
FINANCIAL STATEMENTS
(US Dollars in thousands, except per share amounts) (contd)
  Disclosures about Fair Value of Financial Instruments Interim Financial Reporting
 3. COMMITMENTS AND CONTINGENCIES
  
  Indemnifications
  14




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##### Table of Contents



GLG PARTNERS, INC. AND SUBSIDIARIES
NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED
FINANCIAL STATEMENTS
(US Dollars in thousands, except per share amounts) (contd)
 4. FAIR VALUE OF FINANCIAL INSTRUMENTS
  
    
    Level 1: Inputs to the valuation methodology are quoted prices,
unadjusted, for identical assets or liabilities in active
markets. A quoted price in an active market provides the most
reliable evidence of fair value and shall be used to measure fair
value whenever available.
    
    Level 2: Inputs to the valuation methodology include quoted
prices for similar assets or liabilities in active markets;
inputs to the valuation methodology include quoted prices for
identical or similar assets or liabilities in markets that are
not active; or inputs to the valuation methodology that are
derived principally from or can be corroborated by observable
market data by correlation or other means.
    
    Level 3: Inputs to the valuation methodology are unobservable and
significant to the fair value measurement. Level 3 assets and
liabilities include financial instruments whose value is
determined using discounted cash flow methodologies, as well as
instruments for which the determination of fair value requires
significant management judgment or estimation.
    15




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##### Table of Contents



GLG PARTNERS, INC. AND SUBSIDIARIES
NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED
FINANCIAL STATEMENTS
(US Dollars in thousands, except per share amounts) (contd)
 Fair Value MeasurementsQuoted Prices inActive Markets
    
    
    Significantfor Identical
    
    
    Other
    
    
    SignificantAssets
    
    
    Observable
    
    
    UnobservableDescription
    
    Balance
    
    
    (Level 1)
    
    
    Inputs (Level 2)
    
    
    Inputs (Level 3)AssetsAvailable for sale investments
    
    $
    29,300
    
    
    $
    
    
    
    $
    
    
    
    $
    29,300Other assets (financial derivatives)
    
    $
    718
    
    
    $
    
    
    
    $
    718
    
    
    $
    Movements in level 3 assets for the
period were as follows:Available for Sale investmentsOpening Balance January 1, 2009
    
    
    
    
    
    
    
    
    
    
    
    
    
    $
    65,484Change in fair value recorded in
other income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (13
    )Change in unrealized losses recorded
in other comprehensive income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (423
    )Redemption proceeds
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (35,748
    )Closing Balance March 31, 2009
    
    
    
    
    
    
    
    
    
    
    
    
    
    $
    29,300Total unrealized losses in investments
    
    
    
    
    
    
    
    
    
    
    
    
    
    $
    (1
    )
  5. DERIVATIVES AND HEDGING
 Accounting for Derivative Instruments and Hedging Activities
  16




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GLG PARTNERS, INC. AND SUBSIDIARIES
NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED
FINANCIAL STATEMENTS
(US Dollars in thousands, except per share amounts) (contd)
  
 Three months ended31 March 2009Fair Value of Derivative Financial Instruments  designated in a cash
flow hedge relationship at end of period (included in Other Assets)
    
    $
    718Total Fair Value of Derivative Financial Instruments (included in Other
Assets)
    
    $
    718Fair values are allocated as follows:Statement of Changes in Equity:Gain recorded in other comprehensive income in period  cash flow hedges
    
    
    907Gain reclassified from other comprehensive income to income
    
    
    (425
    )Total gain carried forward in Other Comprehensive Income
    
    
    482Statement of Operations:Decrease in General, Administrative & Other expenses  effective
portion of hedge reclassified from other comprehensive income
    
    
    134Decrease in Employee compensation and benefits  effective portion of
hedge reclassified from other comprehensive income
    
    
    97Increase in Management Fees  effective portion of hedge reclassified
from other comprehensive income
    
    
    194Decrease in Other income (ineffective portion of hedge and excluded from
effectiveness assessment)
    
    
    (231
    )Total impact on Statement of Operations
    
    
    194Total impact on Comprehensive Income
    
    
    676
 6. CREDIT FACILITY
   17




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##### Table of Contents



GLG PARTNERS, INC. AND SUBSIDIARIES
NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED
FINANCIAL STATEMENTS
(US Dollars in thousands, except per share amounts) (contd)
  7. STOCKHOLDERS DEFICIT
  Number of SharesCommon stock outstanding at December 31, 2008
    
    
    245,784,390Shares issued as bonus
    
    
    28,290,535Shares repurchased
    
    
    (28,344,655
    )Shares issued under share plan awards
    
    
    1,270,524Stock forfeited and cancelled under share-based compensation arrangements
    
    
    (496,500
    )Common Stock outstanding at March 31, 2009
    
    
    246,504,294
  8. INCOME TAXES
  18




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GLG PARTNERS, INC. AND SUBSIDIARIES
NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED
FINANCIAL STATEMENTS
(US Dollars in thousands, except per share amounts) (contd)
 9. COMPREHENSIVE INCOME
 2009
    
    
    2008Attributed to
    
    
    Attributed to
    
    
    
    
    
    
    Attributed tocontrolling
    
    
    non-controlling
    
    
    Total
    
    
    controllingNet Loss
    
    $
    (120,259
    )
    
    $
    (22,021
    )
    
    $
    (142,280
    )
    
    $
    (226,334
    )Other comprehensive income
unrealized gains on cash flow hedges
    
    
    389
    
    
    
    93
    
    
    
    482
    
    
    
    Release of unrealized loss to statement of operations
    
    
    20,794
    
    
    
    
    
    
    
    20,794
    
    
    
    (3,948
    )Foreign currency translation
    
    
    (91
    )
    
    
    (22
    )
    
    
    (113
    )
    
    
    (412
    )Total comprehensive loss
    
    $
    (99,167
    )
    
    $
    (21,950
    )
    
    $
    (121,117
    )
    
    $
    (230,694
    )
 19




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##### Table of Contents



GLG PARTNERS, INC. AND SUBSIDIARIES
NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED
FINANCIAL STATEMENTS
(US Dollars in thousands, except per share amounts) (contd)
 10. PROFORMA STATEMENT OF OPERATIONS
  Three Months Ended March 31,2009
    
    
    2008Net revenues and other incomeManagement fees, net
    
    $
    34,427
    
    
    $
    98,756Performance fees, net
    
    
    10,817
    
    
    
    4,735Administration fees, net
    
    
    5,473
    
    
    
    22,248Other
    
    
    997
    
    
    
    5,641Total net revenues and other income
    
    
    51,714
    
    
    
    131,380ExpensesEmployee compensation and benefits
    
    
    (138,014
    )
    
    
    (287,935
    )Limited partner profit share
    
    
    (8,643
    )
    
    
    (25,104
    )Compensation, benefits and profit share
    
    
    (146,657
    )
    
    
    (313,039
    )General, administrative and other
    
    
    (22,317
    )
    
    
    (30,303
    )Total expenses
    
    
    (168,974
    )
    
    
    (343,342
    )Loss income from operations
    
    
    (117,260
    )
    
    
    (211,962
    )Realized
loss on available-for-sale investments
    
    
    (21,217
    )
    
    
    Interest income
    
    
    357
    
    
    
    3,086Interest expense
    
    
    (2,947
    )
    
    
    (7,129
    )Loss before income taxes
    
    
    (141,067
    )
    
    
    (216,005
    )Income taxes
    
    
    (618
    )
    
    
    (6,200
    )Consolidated net loss
    
    
    (141,685
    )
    
    
    (222,205
    )Cumulative dividends on exchangeable shares
    
    
    (595
    )
    
    
    (4,129
    )Net loss attributable to common stockholders
    
    $
    (142,280
    )
    
    $
    (226,334
    )Net loss per share  basic
    
    $
    (0.66
    )
    
    $
    (1.07
    )Weighted average common stock outstanding  basic (in
thousands)
    
    
    216,764
    
    
    
    211,167Net loss per share  diluted
    
    $
    (0.66
    )
    
    $
    (1.07
    )Weighted average common stock outstanding diluted (in
thousands)
    
    
    216,764
    
    
    
    211,167
 20




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GLG PARTNERS, INC. AND SUBSIDIARIES
NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED
FINANCIAL STATEMENTS
(US Dollars in thousands, except per share amounts) (contd)
 11. SUBSEQUENT EVENTS
   21




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##### Table of Contents



Item 2. Managements Discussion and Analysis of Financial Condition and Results of Operations
  General
 Our Business
      
    
    $976,107,300 in cash;
    
    $23,892,700 in promissory notes in lieu of all of the cash consideration payable to
electing GLG Shareowners;
 22




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##### Table of Contents




    
    230,000,000 shares of our common stock, par value $0.0001 per share which consists of:
 
    
    138,095,007 shares of our common stock, including 10,000,000 shares of our
common stock issued for the benefit of our employees, service providers and certain
key personnel under our 2007 Restricted Stock Plan (the Restricted Stock Plan);
    
    33,000,000 shares of our common stock payable by us upon exercise of certain put
or call rights with respect to 33,000,000 ordinary shares issued by FA Sub 1
Limited to certain GLG Shareowners. Each of the ordinary shares issued by FA Sub 1
Limited to these GLG Shareowners has been put by the holder to us in exchange for
one share of our common stock; and
    
    58,904,993 shares of our common stock to be issued upon the exchange of
58,904,993 Exchangeable Shares (the Exchangeable Shares) issued by FA Sub 2
Limited to certain GLG Shareowners. Each Exchangeable Share is exchangeable at any
time at the election of the holder for one share of our common stock; and
 
    
    58,904,993 shares of our Series A preferred stock, par value $0.0001 per share issued
with the corresponding Exchangeable Shares which carry only voting rights and nominal
economic rights and which will automatically be redeemed on a share-for-share basis as
Exchangeable Shares are exchanged for shares of our common stock.
    Factors Affecting Our Business
  
    
    Assets under management.Our revenues from management and administration fees are
directly linked to AUM. As a result, our future performance will depend on, among other
things, our ability both to retain AUM and to grow AUM from existing and new products.
    
    Fund and managed account performance.Our revenues from performance fees are linked to
the performance of the GLG Funds and accounts we manage. Performance also affects AUM
because it influences investors decisions to invest assets in, or withdraw assets from,
the GLG Funds and accounts managed by us.
 23




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##### Table of Contents




    
    Currency exchange rates.The GLG Funds typically offer share classes denominated in
multiple currencies and as a result, earn fees in those currencies based on the AUM
denominated in those currencies. Consequently, our fee revenues are affected by exchange
rate movements.
    
    Personnel, systems, controls and infrastructure.We depend on our ability to attract,
retain and motivate leading investment and other professionals. Our business requires
significant investment in our fund management platform, including infrastructure and
back-office personnel. We have in the past paid, and expect to continue in the future to
pay, these professionals significant compensation, even during periods we are not
profitable, as well as a share of our profits.
    
    Fee rates.Our management and administration fee revenues are linked to the fee rates
we charge the GLG Funds and accounts we manage as a percentage of their AUM. Our
performance fees are linked to the rates we charge the GLG Funds and accounts we manage as
a percentage of their performance-driven asset growth, subject to high water marks,
whereby performance fees are earned by us only to the extent that the
net asset value of an investors shares in a
GLG Fund or the net asset value of an account we manage at the end of a measurement period exceeds the highest net asset value on a
preceding measurement period end for which we earned performance fees, and/or subject, in
some cases, to performance hurdles.
   Critical Accounting Policies
   Combination and Consolidation Criteria
  Determining Whether a General Partner, or the
General Partners as a Group, Controls a Limited Partnership or Similar Entity When the Limited
Partners Have Certain Rights
 Consolidation of Variable Interest Entities
 24




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##### Table of Contents



Assets Under Management
     GLG Fund
    
    General Range of Redemption Request Advance Notice Periods*Single-manager alternative strategy funds
    
    5-60 daysLong-only funds
    
    1-5 daysInternal FoHF
    
    10-30 daysExternal FoHF
    
    45-90 days
 
 *
    
    Days are defined in the prospectus of each GLG Fund and the definition may be business days or
calendar days depending on the GLG Fund Revenue Recognition
 Performance Fees
  25




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##### Table of Contents



Accounting for Management Fees Based on a Formula
  Compensation and Limited Partner Profit Share
   Equity-Based Compensation
 i.e. Share-Based Payment Accounting for Equity Instruments That Are Issued to Other Than Employees for
 26




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##### Table of Contents



Acquiring, or in Conjunction with Selling, Goods or Services
      
    
    The size of the awards to employees, service providers and key personnel under the
equity participation plan and 2007 LTIP was considered to be a substantial retention
incentive;
 27




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##### Table of Contents




    
    Incentives for the awards to employees, service providers and key personnel under the
equity participation plan and 2007 LTIP were considered sufficiently large that a zero
percent forfeiture rate was estimated, subject to review as actual forfeitures occur;
    
    Disincentives for forfeiture related to the agreement among principals and trustees
were considered to be so punitive that the probability of forfeiture was estimated as
zero; and
    
    For awards under the Restricted Stock Plan, we used different forfeiture rates for
individual employees, service providers and key personnel.
  Income Tax
   e.g.
 Accounting for Income Taxes
 Net Revenues
   28




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##### Table of Contents



Management Fees
  Product
    
    General Range of Gross Fee Rates (% of AUM) As of March 31, 2009Single-manager alternative strategy funds*
    
    1.50%  2.50%**Long-only funds
    
    0.75%  2.25%Internal FoHF
    
    0.25%  1.50%** (at the investing fund level)External FoHF
    
    1.00%  1.95%
 
 *
    
    Excludes the GLG European Long-Short (Special Assets) Fund, the GLG Emerging Markets
(Special Assets) II Fund and the GLG North American Opportunity (Special Assets) Fund
established during November 2008 into which certain private placements and other not
readily realizable investments were contributed by the GLG European Long-Short Fund, the
GLG Emerging Markets Fund and the GLG North American Opportunity Fund, respectively, for
the purpose of liquidating them, where the management fee is 0.50%.**
    
    When one of the single-manager alternative strategy funds or internal FoHFs managed by
us invests in an underlying single-manager alternative strategy fund managed by us,
management fees are charged at the investee fund level, except in the case of the GLG
Multi-Strategy Fund where fees are charged at both the investee and investing fund levels.   29




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##### Table of Contents



Performance Fees
   Product
    
    General Range of Gross Fee Rates (% of Investment Gains) As of March 31, 2009Single-manager alternative strategy funds
    
    20%  30%*Long-only funds
    
    20% (may be subject to performance hurdle)Internal FoHF
    
    0%  20%* (at the investing fund level)External FoHF
    
    5%  10% (may be subject to performance hurdle)
 
 *
    
    When one of the single-manager alternative strategy funds or internal FoHFs managed by
us invests in an underlying single-manager alternative strategy fund managed by us,
performance fees are charged at the investee fund level. In addition, performance fees are
charged at both the investee and investing fund levels on the GLG Global Aggressive Fund,
to the extent, if any, that the performance fee charged at the investing fund level is
greater than the performance fee charged at the investee fund level.**
    
    We have adopted Method 1 for recognizing performance fee
revenues and under Method 1 we do
not recognize performance fee revenues until the end of the measurement period when the
amounts are crystallized, which for the majority of the investment funds and accounts
managed by us is on June 30 and December 31.  Administration Fees
  30




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##### Table of Contents



Fees on Managed Accounts
  Expenses
 Employee Compensation and Benefits and Limited Partner Profit Share
       31




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##### Table of Contents




    
    Base compensation contractual compensation paid to employees in the form of base
salary, which is expensed as incurred.
    
    Variable compensation payments that arise from the contractual entitlements of
personnel to a fixed percentage of certain variable fee revenues attributable to such
personnel with respect to GLG Funds and managed accounts. Variable compensation expense is
recognized at the same time as the underlying fee revenue is crystallized, which may be
monthly or semi-annually (on June 30 and December 31), depending on the fee revenue
source.
    
    Discretionary compensation payments that are determined by our management in its
sole discretion and are generally linked to performance. In determining such payments, our
management considers, among other factors, the ratio of total discretionary compensation
to total revenues; however, this ratio may vary between periods and, in particular,
significant discretionary bonuses may still be paid in a period of low performance for
retention and incentivization purposes. This discretionary compensation is paid to
employees in the form of a discretionary cash bonus or share-based compensation.
Discretionary compensation is generally declared and paid following the end of each
calendar year. However, the estimated discretionary compensation charge is adjusted
monthly based on the year-to-date profitability and revenues recognized on a year-to-date
basis. As the majority of the GLG Funds crystallize their performance fees at June 30 and
December 31, the majority of discretionary compensation expense crystallizes at year end
and is typically paid in January and February following the year end.
    
    Limited partner profit share distributions of limited partner profit share under the
limited partner profit share arrangement described below.
 32




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##### Table of Contents



Allocation of Profit Shares to Individual Members of LLPs
   Acquisition-Related Compensation Expense
  33




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##### Table of Contents



General and Administrative
  Assessing Business Performance
    34




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##### Table of Contents



Non-controlling Interests in Consolidated
Financial Statements  an amendment of ARB No. 51
 Assets Under Management
  35




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##### Table of Contents



March 31, 2009 Compared to December 31, 2008 and March 31, 2008
 Change in AUM between March 31, 2009, December 31, 2008 and March 31, 2008
(U.S. dollars in millions)
 As of Mar
    
    
    As of Dec
    
    
    3 Month
    
    
    As of Mar
    
    
    12 Month31, 2009
    
    
    31, 2008
    
    
    Change
    
    
    31, 2008
    
    
    ChangeAlternative strategy
    
    $
    5,709
    
    
    $
    6,590
    
    
    
    ($881
    )
    
    $
    19,267
    
    
    
    ($13,558
    )Long-only
    
    
    1,447
    
    
    
    1,766
    
    
    
    (319
    )
    
    
    4,254
    
    
    
    (2,807
    )Internal FoHF
    
    
    1,050
    
    
    
    1,133
    
    
    
    (83
    )
    
    
    2,233
    
    
    
    (1,183
    )External FoHF
    
    
    427
    
    
    
    506
    
    
    
    (79
    )
    
    
    651
    
    
    
    (224
    )Gross fund-based AUM
    
    
    8,633
    
    
    
    9,995
    
    
    
    (1,362
    )
    
    
    26,404
    
    
    
    (17,771
    )Managed accounts
    
    
    6,352
    
    
    
    6,119
    
    
    
    233
    
    
    
    2,385
    
    
    
    3,967Cash and other holdings
    
    
    434
    
    
    
    430
    
    
    
    4
    
    
    
    347
    
    
    
    87Gross AUM
    
    
    15,419
    
    
    
    16,544
    
    
    
    (1,125
    )
    
    
    29,136
    
    
    
    (13,717
    )Less: alternative strategy
investments in GLG Funds
    
    
    (466
    )
    
    
    (473
    )
    
    
    7
    
    
    
    (2,221
    )
    
    
    1,755Less: internal FoHF
investments in GLG Funds
    
    
    (896
    )
    
    
    (998
    )
    
    
    102
    
    
    
    (2,217
    )
    
    
    1,321Less: external FoHF
investments in GLG Funds
    
    
    (26
    )
    
    
    (32
    )
    
    
    6
    
    
    
    (51
    )
    
    
    25Less: other
    
    
    
    
    
    
    (2
    )
    
    
    2
    
    
    
    
    
    
    
    Net AUM
    
    $
    14,031
    
    
    $
    15,039
    
    
    
    ($1,008
    )
    
    $
    24,646
    
    
    
    ($10,616
    )Quarterly average gross AUM
    
    $
    15,982
    
    
    $
    18,848
    
    
    
    
    
    
    $
    29,111Quarterly average net AUM
    
    
    14,535
    
    
    
    16,160
    
    
    
    
    
    
    
    24,629Opening net AUM
    
    $
    15,039
    
    
    $
    17,280
    
    
    
    
    
    
    $
    24,612Inflows
    
    
    2,175
    
    
    
    5,970
    
    
    
    
    
    
    
    2,763Outflows
    
    
    (2,125
    )
    
    
    (5,199
    )
    
    
    
    
    
    
    (1,996
    )Inflows (net of redemptions)
    
    
    50
    
    
    
    771
    
    
    
    
    
    
    
    767Performance (gains net of
losses and fees)
    
    
    (807
    )
    
    
    (2,649
    )
    
    
    
    
    
    
    (1,549
    )Currency translation impact
(non-USD AUM expressed in USD)
    
    
    (251
    )
    
    
    (363
    )
    
    
    
    
    
    
    816Closing net AUM
    
    $
    14,031
    
    
    $
    15,039
    
    
    
    
    
    
    $
    24,646
  
    
    Negative fund and managed account performance during the three months ended March
31, 2009, resulting in performance losses (net of gains) of approximately $807 million;
    
    Inflows (net of redemptions) of $50 million in AUM for the three months ended March
31, 2009, were driven by:
 
    
    Net inflows of $1.0 billion into our managed accounts which was driven by
approximately $2.0 billion in subscriptions offset by $1.0 billion in redemptions;
 36




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##### Table of Contents




    
    Net outflows from our alternative strategy funds of approximately $642 million,
which was composed of redemptions of $719 million offset by subscriptions of $77
million during the three months ended March 31, 2009;
    
    Net outflows of $155 million from our internal and external fund of hedge fund
products which were almost entirely comprised of redemptions; and
    
    Net outflows from our long-only strategy funds of approximately $172 million
which was comprised of redemptions of $235 million offset by subscriptions of $63
million spread across various long-only strategy funds; and
 
    
    Continued strengthening of the U.S. dollar against other currencies in which a
portion of our funds and managed accounts are denominated, resulting in a negative
foreign exchange impact on AUM of $251 million during the three months ended March 31,
2009.
   As of March 31,
    
    
    
    
    
    Pro-Forma2009
    
    SGAM UK
    
    Post AcquisitionAlternative strategy
    
    $
    5,709
    
    
    
    
    
    
    $
    5,709Long-only
    
    
    1,447
    
    
    
    
    
    
    
    1,447Internal FoHF
    
    
    1,050
    
    
    
    
    
    
    
    1,050External FoHF
    
    
    427
    
    
    
    
    
    
    
    427Acquired UK Funds
    
    
    
    
    
    
    6,754
    
    
    
    6,754Gross fund-based AUM
    
    
    8,633
    
    
    
    6,754
    
    
    
    15,387Managed accounts
    
    
    6,352
    
    
    
    (2,760)
    *
    
    
    3,592Cash and other holdings
    
    
    434
    
    
    
    
    
    
    
    434Gross AUM
    
    $
    15,419
    
    
    $
    3,994
    
    
    $
    19,413
 
 *
    
    The AUM related to the SGAM UK sub-advisory agreement is reflected as a managed account
as of March 31, 2009. Following completion of the SGAM UK acquisition, the sub-advisory
agreement terminated and the entire balance of SGAM UKs AUM is reflected in the line item
Acquired UK Funds.   37




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##### Table of Contents




    
    amounts which LBIE was required to treat as client money under the rules of the U.K.
Financial Services Authority and not use in the course of its business were and are, in
fact, so held, and that any shortfall in recoveries of client monies will not exceed
reserves established to date by the GLG Funds;
    
    even though LBIE or its affiliates may be entitled to withhold assets to satisfy any
net indebtedness owed to them, there will be no material shortfall in the recovery of
assets held on trust by LBIE as a custodian, or by LBI as a sub-custodian for LBIE, or by
any other sub-custodian appointed by LBIE with regard to the assets of a GLG Fund;
    
    the information we have received to date from the administrators of LBIE in relation to
the re-hypothecation of GLG Fund assets by LBIE is true and accurate;
    
    unsettled transactions between GLG Funds and LBIE at the time LBIE entered into
administration proceedings will be determined on the basis of a cash settlement of those
trades, in accordance with contractual agreements between the affected GLG Fund and LBIE,
or cancelled, in each case, as determined by us;
    
    the cash settlement amounts for terminated over-the-counter derivatives and other
transactions will be as determined by us in accordance with contractual documentation;
    
    the recovery on amounts estimated to be unsecured claims against LBIE will not be
materially greater or lesser than currently estimated by the GLG Funds; and
 38




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
    
    there are no other facts or factors, which if known to us, would lead us to conclude
that the business of LBIE was conducted otherwise than in accordance with the contractual
documentation or that any of our assumptions is incorrect.
     39




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Results of Operations
 Condensed Consolidated GAAP Statement of Operations Information  (U.S. dollars in thousands)
 Three Months Ended March 31,2009
    
    
    2008Net revenues and other incomeManagement fees, net
    
    $
    34,427
    
    
    $
    98,756Performance fees, net
    
    
    10,817
    
    
    
    4,735Administration fees, net
    
    
    5,473
    
    
    
    22,248Other
    
    
    997
    
    
    
    5,641Total net revenues and other income
    
    $
    51,714
    
    
    $
    131,380ExpensesEmployee compensation and benefits
    
    $
    (138,014
    )
    
    $
    (287,935
    )Limited partner profit share
    
    
    (8,643
    )
    
    
    (25,104
    )Compensation, benefits and profit share
    
    
    (146,657
    )
    
    
    (313,039
    )General, administrative and other
    
    
    (22,317
    )
    
    
    (30,303
    )Total expenses
    
    
    (168,974
    )
    
    
    (343,342
    )Loss from operations
    
    
    (117,260
    )
    
    
    (211,962
    )Realized loss on available-for-sale investments
    
    
    (21,217
    )
    
    
    Interest income
    
    
    357
    
    
    
    3,086Interest expense
    
    
    (2,947
    )
    
    
    (7,129
    )Loss before income taxes
    
    
    (141,067
    )
    
    
    (216,005
    )Income taxes
    
    
    (618
    )
    
    
    (6,200
    )Net loss
    
    
    (141,685
    )
    
    
    (222,205
    )Less non-controlling interests:Cumulative dividends on exchangeable shares
    
    
    (595
    )
    
    
    (4,129
    )Share of loss
    
    
    22,021
    
    
    
    Net loss attributable to common stockholders
    
    $
    (120,259
    )
    
    $
    (226,334
    )
 40




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Net Revenues and Other Income
 Three Months Ended March 31, 2009 Compared to Three Months Ended March 31, 2008
 Change in GAAP Net Revenues and Other Income between
Three Months Ended March 31, 2009 and March 31, 2008
(U.S. dollars in thousands)
 Three Months Ended March 31,2009
    
    
    2008
    
    
    ChangeNet revenues and other incomeManagement fees, net
    
    $
    34,427
    
    
    $
    98,756
    
    
    $
    (64,329
    )Performance fees, net
    
    
    10,817
    
    
    
    4,735
    
    
    
    6,082Administration fees, net
    
    
    5,473
    
    
    
    22,248
    
    
    
    (16,775
    )Other
    
    
    997
    
    
    
    5,641
    
    
    
    (4,644
    )Total net revenues and other income
    
    $
    51,714
    
    
    $
    131,380
    
    
    $
    (79,666
    )Key ratios *Total net revenues and other income/average
net AUM, annualized
    
    
    1.8
    %
    
    
    2.1
    %
    
    
    (0.3
    %)Management fees/average net AUM, annualized
    
    
    1.2
    %
    
    
    1.6
    %
    
    
    (0.4
    %)Administration fees/average net AUM, annualized
    
    
    0.19
    %
    
    
    0.36
    %
    
    
    (0.17
    %)
 
 *
    
    Ratios calculated using average net AUM for the three months ended March 31, 2009
exclude the approximately $2.8 billion sub-advisory mandate from SGAM UK.       41




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Expenses
 Three Months Ended March 31, 2009 Compared to Three Months Ended March 31, 2008
 Change in GAAP Expenses between Three Months Ended
March 31, 2009 and March 31, 2008
(U.S. dollars in thousands)
 Three Months Ended March 31,2009
    
    
    2008
    
    
    ChangeExpensesEmployee compensation and benefits
    
    $
    (138,014
    )
    
    $
    (287,935
    )
    
    $
    149,921Limited partner profit share
    
    
    (8,643
    )
    
    
    (25,104
    )
    
    
    16,461Compensation, benefits and profit share
    
    
    (146,657
    )
    
    
    (313,039
    )
    
    
    166,382General, administrative and other
    
    
    (22,317
    )
    
    
    (30,303
    )
    
    
    7,986Total expenses
    
    $
    (168,974
    )
    
    $
    (343,342
    )
    
    $
    174,368Key ratiosCompensation, benefits and profit
share / total GAAP net revenues and
other income
    
    
    283.6
    %
    
    
    238.3
    %
    
    
    45.3
    %General, administrative and other /
total GAAP net revenues and other
income
    
    
    43.2
    %
    
    
    23.1
    %
    
    
    20.1
    %Total expenses / total GAAP net revenues
and other income
    
    
    326.8
    %
    
    
    261.4
    %
    
    
    65.4
    %
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Non-GAAP Expense Measures
  Change in Non-GAAP Expenses between Three Months Ended
March 31, 2009 and March 31, 2008
(U.S. dollars in thousands)
 Three Months Ended March 31,2009
    
    
    2008
    
    
    ChangeNon-GAAP expensesGAAP compensation, benefits and
profit share
    
    $
    (146,657
    )
    
    $
    (313,039
    )
    
    $
    166,382Add back: Acquisition-related
compensation expense and other
compensation costs
    
    
    126,737
    
    
    
    260,155
    
    
    
    (133,418
    )Non-GAAP CBP
    
    
    (19,920
    )
    
    
    (52,884
    )
    
    
    32,964GAAP general, administrative and other
    
    
    (22,317
    )
    
    
    (30,303
    )
    
    
    7,986Non-GAAP total expenses
    
    $
    (42,237
    )
    
    $
    (83,187
    )
    
    
    40,950Key ratios (based on non-GAAP measures)Non-GAAP CBP / total GAAP net
revenues and other income
    
    
    38.5
    %
    
    
    40.3
    %
    
    
    (1.8
    %)General, administrative and other /
total GAAP net revenues and other
income
    
    
    43.2
    %
    
    
    23.1
    %
    
    
    20.1
    %Non-GAAP total expenses / total GAAP net
revenues and other income
    
    
    81.7
    %
    
    
    63.4
    %
    
    
    18.3
    %
  43




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Net Interest Expense
 Three Months Ended March 31, 2009 Compared to Three Months Ended March 31, 2008
 Change in Net Interest Expense between Three Months Ended
March 31, 2009 and March 31, 2008
(U.S. dollars in thousands)
 Three Months Ended March 31,2009
    
    
    2008
    
    
    ChangeInterest income
    
    $
    357
    
    
    $
    3,086
    
    
    $
    (2,729
    )Interest expense
    
    
    (2,947
    )
    
    
    (7,129
    )
    
    
    4,182Net interest expense
    
    $
    (2,590
    )
    
    $
    (4,043
    )
    
    
    1,453
  Income Taxes
 Three Months Ended March 31, 2009 Compared to Three Months Ended March 31, 2008
  Non-controlling Interests
  
    
    A $22.0 million credit for the share of losses attributable to FA Sub 2 Exchangeable
Shareholders under SFAS 160. There was no corresponding non-controlling interest movement
in first quarter of 2008 as losses applicable to the FA Sub 2 Exchangeable Shareholders
exceeded their interest in the equity capital of the subsidiary;
    
    Cumulative dividends of $0.6 million accruing to FA Sub 2 Exchangeable Shareholders
compared to cumulative dividends of $4.1 million accrued during the first quarter of 2008;
and
    
    The change in accounting policy related to the adoption of SFAS 160.
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Adjusted Net Income
  Three Months Ended March 31, 2009 Compared to Three Months Ended March 31, 2008
 Change in Non-GAAP Adjusted Net Income between
Three Months Ended March 31, 2009 and March 31, 2008
(U.S. dollars in thousands)
 Three Months Ended March 31,2009
    
    
    2008
    
    
    ChangeDerivation of non-GAAP adjusted net incomeGAAP loss before non-controlling interest
    
    $
    (141,685
    )
    
    $
    (222,205
    )
    
    $
    80,520Add: Acquisition-related
compensation expense
    
    
    126,737
    
    
    
    260,155
    
    
    
    (133,418
    )Add: Realized loss on
available-for-sale investments
    
    
    21,217
    
    
    
    
    
    
    
    21,217Deduct: Cumulative dividends
    
    
    (595
    )
    
    
    (4,129
    )
    
    
    3,534Deduct: tax effect of
Acquisition-related compensation
expenses
    
    
    (355
    )
    
    
    
    
    
    
    (355
    )Non-GAAP adjusted net income
    
    $
    5,319
    
    
    $
    33,821
    
    
    $
    (28,502
    )
  Liquidity and Capital Resources
     45




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Operating Activities
  46




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
    
    Performance Fees.Performance fees are generally received every six months in the
month following crystallization (i.e., 2009 operating cash flows will be the result of
receipts of June 2009 and December 2008 performance fees). Lower December 2008 performance
fees contributed $320.4 million to the decrease in operating cash flows compared to the
same period in 2008.
    
    Compensation, employee benefits and profit share.The most significant component of
compensation, employee benefits and profit share is discretionary
compensation and discretionary limited
partner profit share paid during the year following the year in which the related business
performance is achieved (i.e., 2009 compensation cash flows are largely influenced by
discretionary compensation and discretionary limited partner profit share paid in respect of 2008
business performance). Operating cash flows from compensation, employee benefits and
profit share were $316.5 million lower as a result of a reduction in the level of accrued
compensation for the fiscal year ending December 31, 2008 compared to 2007.
    
    General, Administrative and other.Cash flows from general, administrative and other
expenses were $15.2 million higher than the comparative period.
    
    Management and Administration Fees.Management and administration fees are largely
received monthly and are driven by the average net AUM and fee rates in each fund and
managed account. Management and administration fees contributed a decrease of $84.2
million due to lower average net AUM.
    
    Net Interest Expense.Cash outflows from net interest expense decreased $1.5 million,
driven by the effect of lower interest rates on debt outstanding offset by lower cash
balances as compared to the same period in 2008.
    
    Foreign Exchange.Changes in exchange rates, predominantly euro and sterling
denominated monetary assets and liabilities, contributed a decrease of $8.3 million.
    
    Tax.Tax payments decreased by $9.7 million due to lower income levels.
  Investing Activities
   Financing Activities
  47




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Off-Balance Sheet Arrangements
  48




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Item 3. Quantitative and Qualitative Disclosures About Market Risk
     Impact on Management Fees*
  Impact on Performance Fees
  49




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Impact on Administration Fees *
  Market Risk
  Exchange Rate Risk
    
 *
    
    AUM used in impact calculations does not include the
approximately $2.8 billion sub-advisory mandate from Société Générale Asset
Management UK. 50




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Interest Rate Risk
  51




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Item 4. Controls and Procedures
    52




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PART II. OTHER INFORMATION
 
 Item 1. Legal Proceedings.
   
 Item 1A. Risk Factors.
 Our business, financial condition and results of operations can be impacted by a number of
risk factors, any one of which could cause our actual results to vary materially from recent
results or from our anticipated future results. Any of these risks could materially and adversely
affect our business, financial condition and results of operations, which in turn could materially
and adversely affect the price of our common stock or other securities.
 Risks Related to Our Business
 Difficult market conditions, market disruptions and volatility have adversely affected and may in
the future continue to adversely affect our business in many ways, each of which could materially
reduce our revenue and cash flow and adversely affect our business, results of operations or
financial condition.
    
    
    The investment performance of the GLG Funds and managed accounts may be negatively
impacted. Negative fund performance reduces AUM, which decreases the management fees,
administration fees and
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performance fees we earn. Lower revenues may result in lower
adjusted net income and, therefore, reduced
amounts available for dividends on our shares of common stock or increased risk that we will
be unable to comply with financial covenants in our credit facility.
    
    Performance fees, which historically have comprised a substantial portion of our annual
revenues, are largely contingent on the GLG Funds and managed accounts generating positive
annual investment performance in excess of high water marks or generating investment
performance in excess of certain benchmarks. We may be unable to reach profitability in
the future without substantial growth in performance fees.
 Our revenue, net income and cash flow are dependent upon performance fees, which may make it
difficult for us to achieve steady earnings growth on a semi-annual basis.
   Fluctuations in currency exchange rates could materially affect our business, results of operations
and financial condition.
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In order to retain our investment professionals during periods of poor performance, we may have to
pay our investment professionals a significant amount, even if we earn low or no performance fees,
which could have an adverse impact on our business, results of operations or financial condition.
   Investors in the GLG Funds and investors with managed accounts can generally redeem investments
with only short periods of notice and the rate of redemptions could accelerate if the GLG Funds and
managed accounts underperform, which could make it more difficult to manage the liquidity levels of
the GLG Funds and managed accounts, reduce AUM and adversely affect our revenues.
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We may face further redemptions from the GLG Funds and managed accounts for reasons not
specifically related to investment performance, which may further reduce AUM or adversely impact
our ability to attract new investments, resulting in a material adverse effect on our business,
results of operations or financial condition.
  We are dependent on the continued services of Noam Gottesman, Pierre Lagrange and Emmanuel Roman
(the Principals) and other key personnel. The loss of key personnel could have a material adverse
effect on us.
   The cost of compliance with international employment, labor, benefits and tax regulations may
adversely increase our costs, affect our revenue and impede our ability to expand internationally.
  If we experience rapid growth, whether through attracting new investments, acquiring other asset
management businesses or otherwise, it may place significant demands on our administrative,
operational and financial resources.
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
    
    in maintaining adequate financial and business controls;
    
    in implementing new or updated information and financial systems and procedures; and
    
    in training, managing and appropriately sizing our work force and other components of
our business on a timely and cost-effective basis.
   There can be no assurance that our expansion into the United States or other markets will be
successful.
  Damage to our reputation, including as a result of personnel misconduct, failure to manage inside
information, fraud, restricting redemptions from certain GLG Funds or side-pocketing certain
illiquid private placement investments, could have a material adverse effect on our business.
  
    
    fraud, misconduct or improper practice by any of our personnel, including failure to
comply with applicable regulations or non-adherence by a portfolio manager to the
investment guidelines applicable to each GLG Fund. Such actions can be particularly
detrimental in the provision of financial services and could involve, for example,
fraudulent transactions entered into for a clients account, diversion of funds, the
intentional or inadvertent release of confidential information or failure to follow
internal procedures. Such actions could expose us to financial losses resulting from the
need to reimburse customers or other business partners or as a result of fines or other
regulatory sanctions, and may significantly damage our reputation;
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
    
    failure to manage inside information. We frequently trade in multiple securities of the
same issuer. In the course of transactions involving these securities, we may receive
inside information in relation to certain issuers. If we do not sufficiently control the
use of this inside information or any other inside information we receive, we and/or our
employees could be subject to investigation and criminal or civil liability;
    
    failure to manage conflicts of interest. As we have expanded the scope of our business
and client base, we have been increasingly exposed to potential conflicts of interest. If
we fail, or appear to fail, to deal appropriately with conflicts of interest, we could
face significant damage to our reputation, litigation or regulatory proceedings or
penalties;
    
    restricting redemptions from certain GLG Funds. The GLG Funds have the right to
restrict redemptions from the GLG Funds for certain periods in the event of certain
limited circumstances as specified in the prospectuses for the respective GLG Funds. The
exercise of these rights to restrict redemptions may be perceived as a weakness and fund
investors may suffer a reduced ability to withdraw their original investments in the
affected GLG Funds, resulting in significant reputational damage and could lead to a
reduction in investments in the GLG Funds and hinder our ability to attract new
investments. In addition, it may prompt fund investors to redeem their existing
investments in other GLG Funds that have not elected to exercise these rights. As of
December 31, 2008, approximately $1.5 billion of AUM were in GLG Funds for which the
related fund boards of directors had suspended redemptions, which had increased to
approximately $1.7 billion of AUM as of March 31, 2009. The funds included: The GLG MMI
Enhanced II Fund, GLG Global Utilities Fund, GLG Credit Fund, GLG MMI Enhanced Fund, GLG
Multi-Strategy Fund, GLG Market Neutral Fund and GLG Event Driven Fund. We continue to
receive full management and administration fees related to these funds; and
    
    side-pocketing certain illiquid private placement and other not readily realizable
investments. Certain GLG Funds have and may in the future side-pocket certain private
placement and other not readily realizable investments into separate special asset
vehicles, providing investors with illiquid interests in the new special asset vehicles in
lieu of returning their invested capital. As fund investors suffer a reduced ability to
withdraw their original investments from the GLG Funds due to this side pocketing, our
reputation may be subject to substantial damage. This reputational harm may hinder our
ability to obtain new investments and may prompt investors to redeem their existing
investments in other GLG Funds or managed accounts.
  Operational risks may disrupt our business, result in losses or limit our growth.
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Our business may suffer as a result of loss of business from key private and institutional
investors.
  We are subject to substantial litigation and regulatory enforcement risks, and we may face
significant liabilities and damage to our professional reputation as a result of litigation
allegations or regulatory investigations and the attendant negative publicity.
  
 
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We are subject to intense competition and could lose business to our competitors.
    Certain of our investment management and advisory agreements are subject to termination on short
notice.
  The historical returns attributable to the GLG Funds may not be indicative of our future results or
of any returns expected on an investment in our common stock.
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Our insurance arrangements may not be adequate to protect us.
  We use substantial amounts of leverage to finance our business, which exposes us to substantial
risks.
  An increase in our borrowing costs may adversely affect our earnings and liquidity.
   If we were deemed an investment company under the Investment Company Act, applicable restrictions
could make it impractical for us to continue our business as contemplated and could have a material
adverse effect on our business.
  
    
    it is or holds itself out as being engaged primarily, or proposes to engage primarily,
in the business of investing, reinvesting or trading in securities; or
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
    
    absent an applicable exemption, it owns or proposes to acquire investment securities
having a value exceeding 40% of the value of its total assets (exclusive of U.S.
government securities and cash items) on an unconsolidated basis.
    
    
    registration with the SEC;
    
    maintaining books and records required by the SEC;
    
    cooperation with SEC examination or information requests;
    
    filing of annual public information statements which would include, among other things:
 
    
    the names and addresses of beneficial owners, any company with an ownership
interest in the fund and the funds primary accountant and primary broker;
    
    an explanation of the structure of ownership in the fund;
    
    a statement of any minimum required investment;
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
    
    the total number of limited partners, members or other investors; and
    
    the current value of the funds assets and AUM; and
 
    
    the establishment of certain anti-money laundering programs, policies and procedures
that are reasonably designed to identify non-U.S. investors and their beneficial owners.
  We and the GLG Funds may become subject to additional regulations which could increase the costs
and burdens of compliance or impose additional restrictions which could have a material adverse
effect on our business and the performance of the GLG Funds.
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Risks Related to the GLG Funds
 We currently derive our revenues from management fees and administration fees based on the value of
the assets under management in the GLG Funds and the accounts managed by us, and performance fees
based on the performance of the GLG Funds and the accounts managed by us. Our stockholders are not
investors in the GLG Funds and the accounts managed by us, but rather stockholders of an
alternative asset manager. Our revenues could be adversely affected by many factors that could
reduce assets under management or negatively impact the
 performance of the GLG Funds and accounts managed by us.
 Valuation methodologies for certain assets in the GLG Funds can be subject to significant
subjectivity.
  Some of the GLG Funds and managed accounts are subject to emerging markets risks.
   Many of the GLG Funds invest in foreign countries and securities of issuers located outside of the
United States and the United Kingdom, which may involve foreign exchange, political, social and
economic uncertainties and risks.
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There are risks associated with the GLG Funds investments in high yield and distressed debt.
  Fluctuations in interest rates may significantly affect the returns derived from the GLG Funds
investments.
  The GLG Funds are subject to risks due to potential illiquidity of assets.
  There are risks associated with the GLG Funds use of leverage.
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In the current tight credit environment, the GLG Funds and accounts we manage may not be able to
obtain credit for leveraging or hedging purposes at the same level or cost as they have in the
past, which could have a material adverse effect on the performance of the GLG Funds and managed accounts.
   There are risks associated with the GLG Funds investments in derivatives.
  
    
    limitation of risk assessment methodologies. Decisions to enter into these derivatives
and other securities contracts will be based on estimates of returns and probabilities of
loss derived from our own calculations and analysis. There can be no assurance that the
estimates or the methodologies, or the assumptions which underlie such estimates and
methodologies, will turn out to be valid or appropriate;
    
    risks underlying the derivative and securities contracts. A general rise in the
frequency, occurrence or severity of certain non-financial risks such as accidents and/or
natural catastrophes will lead to a general decrease in the returns and the possibility of
returns from these derivatives and securities contracts, which will not be reflected in
the methodology or assumption underlying the analysis of any specific derivative or
securities contract; and
    
    particular risks. The particular instruments in which we will invest on behalf of the
GLG Funds may produce an unusually and unexpectedly high amount of losses, which will not
be reflected in the methodology or assumptions underlying the analysis of any specific
derivative or securities contract.
 The GLG Funds and accounts we manage are subject to risks in using prime brokers, custodians,
administrators and other agents.
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Following the collapse of Lehman Brothers, the GLG Funds and several GLG clients with managed
accounts have claims as creditors and/or as trust asset claimants against Lehman Brothers
International (Europe) (LBIE) and, in some cases, other Lehman Brothers entities. These claims
will likely take an extended period of time to resolve and, in some cases, may remain unsatisfied.
There are also a number of open factual and legal issues surrounding such claims.
     
    
    amounts which LBIE was required to treat as client money under the rules of the U.K.
Financial Services Authority and not use in the course of its business were and are, in
fact, so held, and that any shortfall in recoveries of client monies will not exceed
reserves established to date by the GLG Funds;
    
    even though LBIE or its affiliates may be entitled to withhold assets to satisfy any
net indebtedness owed to them, there will be no material shortfall in the recovery of
assets held on trust by LBIE as a custodian, or by LBI as a sub-custodian for LBIE, or by
any other sub-custodian appointed by LBIE with regard to the assets of a GLG Fund;
    
    the information we have received to date from the administrators of LBIE in relation to
the re-hypothecation of GLG Fund assets by LBIE is true and accurate;
    
    unsettled transactions between GLG Funds and LBIE at the time LBIE entered into
administration proceedings will be determined on the basis of a cash settlement of those
trades, in accordance with
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contractual agreements between the affected GLG Fund and LBIE,
or cancelled, in each case, as determined by us;
    
    the cash settlement amounts for terminated over-the-counter derivatives and other
transactions will be as determined by us in accordance with contractual documentation;
    
    the recovery on amounts estimated to be unsecured claims against LBIE will not be
materially greater or lesser than currently estimated by the GLG Funds; and
    
    there are no other facts or factors, which if known to us, would lead us to conclude
that the business of LBIE was conducted otherwise than in accordance with the contractual
documentation or that any of our assumptions is incorrect.
      The GLG Funds and accounts we manage are subject to counterparty risk with regard to
over-the-counter instruments and other swap or hedging transactions. The actual or perceived
weakness of counterparties could increase the exposure of the GLG Funds and managed accounts to
these counterparty and credit risks.
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The GLG Funds and managed accounts are subject to systemic risk due to the interconnectedness and
recent consolidation of financial institutions as the failure of any one institution may expose the
GLG Funds and managed accounts to risk of loss.
  Concerns of counterparties about the financial strength of the GLG Funds and managed accounts may
impact their willingness to enter into transactions with the GLG Funds and managed accounts.
  GLG Fund investments are subject to numerous additional risks.
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
    
    certain of the GLG Funds are newly established funds without any operating history or
are managed by management companies or general partners who do not have a significant
track record as an independent manager;
    
    generally, there are few limitations on the execution of the GLG Funds investment
strategies, which are subject to the sole discretion of the management company of such
funds;
    
    the GLG Funds may engage in short-selling, which is subject to the theoretically
unlimited risk of loss because there is no limit on how much the price of a security may
appreciate before the short position is closed out. A GLG Fund may be subject to losses if a security lender demands return of the
lent securities and an alternative lending source cannot be found or if the GLG Fund is
otherwise unable to borrow securities that are necessary to hedge its positions;
    
    credit risk may arise through a default by one of several large institutions that are
dependent on one another to meet their liquidity or operational needs, so that a default
by one institution causes a series of defaults by the other institutions. This systemic
risk may adversely affect the financial intermediaries (such as clearing agencies,
clearing houses, banks, securities firms and exchanges) with which the GLG Funds interact
on a daily basis;
    
    the efficacy of investment and trading strategies depends largely on the ability to
establish and maintain an overall market position in a combination of financial
instruments. Trading orders may not be executed in a timely and efficient manner due to
various circumstances, including systems failures or human error. In such event, the GLG
Funds might only be able to acquire some but not all of the components of the position, or
if the overall position were to need adjustment, the GLG Funds might not be able to make
such adjustment. As a result, the GLG Funds would not be able to achieve the market
position selected by the management company or general partner of such funds, and might
incur a loss in liquidating their position; and
    
    the investments held by the GLG Funds are subject to risks relating to investments in
commodities, equities, bonds, futures, options and other derivatives, the prices of which
are highly volatile and may be subject to the theoretically unlimited risk of loss in
certain circumstances, including if the fund writes a call option. Price movements of
commodities, futures and options contracts and payments pursuant to swap agreements are
influenced by, among other things, interest rates, credit market conditions, changing
supply and demand relationships, trade, fiscal, monetary and exchange control programs and
policies of governments and national and international political and economic events and
policies. The value of futures, options and swap agreements also depends upon the price of
the commodities underlying them. In addition, the assets of the GLG Funds are subject to
the risk of the failure of any of the exchanges on which their positions trade or of their
clearinghouses or counterparties. Most U.S. commodities exchanges limit fluctuations in
certain commodity interest prices during a single day by imposing daily price fluctuation
limits or daily limits, the existence of which may reduce liquidity or effectively
curtail trading in particular markets.
 The due diligence process that we undertake in connection with investments by the GLG Funds may not
reveal all facts that may be relevant in connection with an investment.
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The GLG Funds make investments in companies that the GLG Funds do not control.
  Risk management activities may adversely affect the return on the GLG Funds investments.
  The GLG Funds may be subject to U.K. tax if we do not qualify for the U.K. Investment Manager
Exemption.
    Risks Related to Our Organization and Structure
 Since our principal operations are located in the United Kingdom, we may encounter risks specific
to companies located outside the United States.
  
    
    tariffs and trade barriers;
    
    regulations related to customs and import/export matters;
    
    tax issues, such as tax law changes and variations in tax laws as compared to the
United States;
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
    
    cultural differences; and
    
    foreign exchange controls.
 We are a controlled company within the meaning of the NYSE Listed Company Manual and, as a
result, qualify for, and rely on, exemptions from certain corporate governance standards, which may
limit the presence of independent directors on our board of directors or board committees.
    Certain provisions in our organizational documents and Delaware law make it difficult for someone
to acquire control of us.
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An active market for our common stock may not develop.
  The value of our common stock and warrants may be adversely affected by market volatility.
  
    
    variations in our quarterly operating results or dividends;
    
    failure to meet analysts earnings estimates or failure to meet, or the lowering of,
our own earnings guidance;
    
    publication of research reports about us or the investment management industry or the
failure of securities analysts to cover our shares;
    
    additions or departures of the Principals and other key personnel;
    
    adverse market reaction to any indebtedness we may incur or securities we may issue in
the future;
    
    actions by stockholders;
    
    changes in market valuations of similar companies;
    
    speculation in the press or investment community;
    
    changes or proposed changes in laws or regulations or differing interpretations thereof
affecting our business or enforcement of these laws and regulations, or announcements
relating to these matters;
    
    adverse publicity about the asset management industry generally or individual scandals,
specifically; and
    
    general market and economic conditions, including the substantial volatility
experienced in the financial markets in September 2008 and following months.
  We have announced that we do not intend to pay, and may not be able to pay in the future, dividends
on our common stock.
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To complete the Acquisition, we incurred a large amount of debt, which will limit our ability to
fund general corporate requirements and obtain additional financing, limit our flexibility in
responding to business opportunities and competitive developments and increase our vulnerability to
adverse economic and industry conditions.
  
    
    a decrease in revenues will result in a disproportionately greater percentage decrease
in earnings;
    
    we may not have sufficient liquidity to fund all of these fixed costs if our revenues
decline or costs increase;
    
    we may have to use our working capital to fund these fixed costs instead of funding
general corporate requirements, including capital expenditures; and
    
    we may not have sufficient liquidity to respond to business opportunities, competitive
developments and adverse economic conditions.
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
    
    the performance of the GLG Funds prior to the end of each relevant measurement period;
    
    future net inflows and outflows;
    
    currency movements  principally Euro versus the U.S. dollar; and,
    
    the level of our cash compensation and general and administration expenses.
  As a result of the Acquisition, we incur significant non-cash amortization charges related to
equity-based compensation expense associated with the vesting of certain equity-based awards, which reduces our
net income and may result in further net losses.
  Fulfilling our obligations as a public company will be expensive and time consuming.
  The failure to address actual or perceived conflicts of interest that may arise as a result of the
investment by the Principals and other key personnel of at least 50% of the after-tax cash proceeds
they received in the Acquisition in GLG Funds, may damage our reputation and materially adversely
affect our business.
  We may choose to redeem our outstanding warrants at a time that is disadvantageous to our warrant
holders.
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Our outstanding warrants may be exercised in the future, which would increase the number of shares
eligible for future resale in the public market and result in dilution to our stockholders. This
might have an adverse effect on the market price of our common stock.
  Risks Related to Taxation
 Our effective income tax rate depends on various factors and may increase as our business expands
into countries with higher tax rates or as we repatriate more profits to the U.S.
  U.S. persons who own 10% or more of our voting stock may be subject to higher U.S. tax rates on a
sale of the stock.
  Our U.K. tax liability will be higher if the interest expense incurred by our subsidiary FA Sub 3
Limited cannot be fully utilized for U.K. tax purposes.
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Recent changes in U.K. tax laws may impact our ability to recruit, maintain and motivate our
current and future personnel working in the United Kingdom.
  Our tax position might change as a result of a change in tax laws.
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Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.
 Share Repurchases
   Total Number
    
    Maximumof Shares
    
    Approx. DollarPurchased as
    
    Value of SharesPart of Publicly
    
    that may yet beTotal Number
    
    
    
    
    
    Announced
    
    PurchasedShares
    
    Average Price
    
    Plans or
    
    Under the PlansPeriod
    
    Repurchased
    
    Paid Per Share
    
    Programs
    
    or ProgramsJanuary 1-31, 2009
    
    
    33,468
    
    
    $
    2.42
    
    
    
    33,468
    
    
    $
    109,299,199.49February 1-29, 2009
    
    
    28,290,535
    
    
    
    2.27
    
    
    
    28,290,535
    
    
    
    45,079,685.04March 1-31, 2009
    
    
    20,652
    
    
    
    2.26
    
    
    
    20,652
    
    
    
    45,033,011.52Total
    
    
    28,344,655
    
    
    
    
    
    
    
    28,344,655
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Item 6. Exhibits
 Exhibit No.
    
    Description10.1.1
    
    Letter Agreement dated as of March 24, 2009 between the
Company and Noam Gottesman, filed as Exhibit 10.1.1 to the
Companys Current Report on Form 8-K filed March 26, 2009
(File No.001-33217), is incorporated herein by reference.10.1.2
    
    Letter Agreement dated as of March 24, 2009 between GLG
Partners LP and Noam Gottesman, filed as Exhibit 10.1.2 to the
Companys Current Report on Form 8-K filed March 26, 2009
(File No.001-33217), is incorporated herein by reference.10.1.3
    
    Letter Agreement dated as of March 24, 2009 between GLG
Partners Services LP and Noam Gottesman, filed as Exhibit
10.1.3 to the Companys Current Report on Form 8-K filed March
26, 2009 (File No.001-33217), is incorporated herein by
reference.10.2.1
    
    Letter Agreement dated as of March 24, 2009 between the
Company and Emmanuel Roman, filed as Exhibit 10.2.1 to the
Companys Current Report on Form 8-K filed March 26, 2009
(File No.001-33217), is incorporated herein by reference.10.2.2
    
    Letter Agreement dated as of March 24, 2009 between GLG
Partners LP and Emmanuel Roman, filed as Exhibit 10.2.2 to the
Companys Current Report on Form 8-K filed March 26, 2009
(File No.001-33217), is incorporated herein by reference.10.2.3
    
    Letter Agreement dated as of March 24, 2009 between GLG
Partners Services LP and Emmanuel Roman, filed as Exhibit
10.2.3 to the Companys Current Report on Form 8-K filed March
26, 2009 (File No.001-33217), is incorporated herein by
reference.10.3.1
    
    Letter Agreement dated as of March 24, 2009 between GLG
Partners LP and Pierre Lagrange, filed as Exhibit 10.3.1 to
the Companys Current Report on Form 8-K filed March 26, 2009
(File No.001-33217), is incorporated herein by reference.10.3.2
    
    Letter Agreement dated as of March 24, 2009 between GLG
Partners Services Limited and Pierre Lagrange, filed as
Exhibit 10.3.2 to the Companys Current Report on Form 8-K
filed March 26, 2009 (File No.001-33217), is incorporated
herein by reference.10.4.1
    
    Non-Competition Agreement dated as of November 2, 2007
between the Company and Noam Gottesman.10.4.2
    
    Schedule identifying agreements substantially identical to the Non-Competition Agreement
constituting Exhibit 10.4.1 hereto entered into between the Company and certain persons.10.5.1
    
    Amendment No. 1 to the Credit
Agreement, dated as of June 5, 2008, among the Company, FA Sub 1
Limited, FA Sub  2 Limited and FA Sub 3 Limited, each a subsidiary
of the Company, Citicorp USA, Inc., as administrative agent, and the
other lenders party thereto.10.5.2
    
    Amendment No. 2 to the Credit
Agreement, dated as of April 28, 2009, among the Company, FA Sub 1
Limited, FA Sub 2 Limited and FA Sub 3 Limited, each a subsidiary of
the Company, Citicorp USA, Inc., as administrative agent, and the
other lenders party thereto.31.1
    
    Certification of Periodic Report by the Co-Chief Executive
Officer Pursuant to Rule 13a-15(e) or 15d-15(e) of the
Exchange Act.31.2
    
    Certification of Periodic Report by the Co-Chief Executive
Officer Pursuant to Rule 13a-15(e) or 15d-15(e) of the
Exchange Act.31.3
    
    Certification of Periodic Report by the Chief Financial
Officer Pursuant to Rule 13a-15(e) or 15d-15(e) of the
Exchange Act.32.1
    
    Certification of Periodic Report by the Co-Chief Executive
Officer Pursuant to Section 906 of the Sarbanes-Oxley Act of
2002, 18 U.S.C. Section 1350.32.2
    
    Certification of Periodic Report by the Co-Chief Executive
Officer Pursuant to Section 906 of the Sarbanes-Oxley Act of
2002, 18 U.S.C. Section 1350.32.3
    
    Certification of Periodic Report by the Chief Financial
Officer Pursuant to Section 906 of the Sarbanes-Oxley Act of
2002, 18 U.S.C. Section 1350.
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SIGNATURE
  GLG PARTNERS, INC.
(Registrant)Date: May 11, 2009
    By
    /s/ Noam GottesmanName:
    Noam GottesmanTitle:
    Chairman of the Board and Co-Chief
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EXHIBIT INDEX
 Exhibit No.
    
    Description10.1.1
    
    Letter Agreement dated as of March 24, 2009 between the
Company and Noam Gottesman, filed as Exhibit 10.1.1 to the
Companys Current Report on Form 8-K filed March 26, 2009
(File No.001-33217), is incorporated herein by reference.10.1.2
    
    Letter Agreement dated as of March 24, 2009 between GLG
Partners LP and Noam Gottesman, filed as Exhibit 10.1.2 to the
Companys Current Report on Form 8-K filed March 26, 2009
(File No.001-33217), is incorporated herein by reference.10.1.3
    
    Letter Agreement dated as of March 24, 2009 between GLG
Partners Services LP and Noam Gottesman, filed as Exhibit
10.1.3 to the Companys Current Report on Form 8-K filed March
26, 2009 (File No.001-33217), is incorporated herein by
reference.10.2.1
    
    Letter Agreement dated as of March 24, 2009 between the
Company and Emmanuel Roman, filed as Exhibit 10.2.1 to the
Companys Current Report on Form 8-K filed March 26, 2009
(File No.001-33217), is incorporated herein by reference.10.2.2
    
    Letter Agreement dated as of March 24, 2009 between GLG
Partners LP and Emmanuel Roman, filed as Exhibit 10.2.2 to the
Companys Current Report on Form 8-K filed March 26, 2009
(File No.001-33217), is incorporated herein by reference.10.2.3
    
    Letter Agreement dated as of March 24, 2009 between GLG
Partners Services LP and Emmanuel Roman, filed as Exhibit
10.2.3 to the Companys Current Report on Form 8-K filed March
26, 2009 (File No.001-33217), is incorporated herein by
reference.10.3.1
    
    Letter Agreement dated as of March 24, 2009 between GLG
Partners LP and Pierre Lagrange, filed as Exhibit 10.3.1 to
the Companys Current Report on Form 8-K filed March 26, 2009
(File No.001-33217), is incorporated herein by reference.10.3.2
    
    Letter Agreement dated as of March 24, 2009 between GLG
Partners Services Limited and Pierre Lagrange, filed as
Exhibit 10.3.2 to the Companys Current Report on Form 8-K
filed March 26, 2009 (File No.001-33217), is incorporated
herein by reference.10.4.1
    
    Non-Competition Agreement dated as of November 2, 2007 between the Company and Noam Gottesman.10.4.2
    
    Schedule identifying agreements substantially identical to the Non-Competition Agreement
constituting Exhibit 10.4.1 hereto entered into between the Company and certain persons.10.5.1
    
    Amendment No. 1 to the Credit
Agreement, dated as of June 5, 2008, among the Company, FA Sub 1
Limited, FA Sub 2 Limited and FA Sub 3 Limited, each a subsidiary
of the Company, Citicorp USA, Inc., as administrative agent, and the
other lenders party thereto.10.5.2
    
    Amendment No. 2 to the Credit
Agreement, dated as of April 28, 2009, among the Company, FA Sub 1
Limited, FA Sub 2 Limited and FA Sub 3 Limited, each a subsidiary of
the Company, Citicorp USA, Inc., as administrative agent, and the
other lenders party thereto.31.1
    
    Certification of Periodic Report by the Co-Chief Executive
Officer Pursuant to Rule 13a-15(e) or 15d-15(e) of the
Exchange Act.31.2
    
    Certification of Periodic Report by the Co-Chief Executive
Officer Pursuant to Rule 13a-15(e) or 15d-15(e) of the
Exchange Act.31.3
    
    Certification of Periodic Report by the Chief Financial
Officer Pursuant to Rule 13a-15(e) or 15d-15(e) of the
Exchange Act.32.1
    
    Certification of Periodic Report by the Co-Chief Executive
Officer Pursuant to Section 906 of the Sarbanes-Oxley Act of
2002, 18 U.S.C. Section 1350.32.2
    
    Certification of Periodic Report by the Co-Chief Executive
Officer Pursuant to Section 906 of the Sarbanes-Oxley Act of
2002, 18 U.S.C. Section 1350.32.3
    
    Certification of Periodic Report by the Chief Financial
Officer Pursuant to Section 906 of the Sarbanes-Oxley Act of
2002, 18 U.S.C. Section 1350.