GLG Confirms 'Toast Is Not a Liquid'

But it pays 2%. Gotta problem with that?

Parsing a story in The (London) Sunday Times Sunday:

ONE of Europe’s largest hedge funds, GLG, is sending a letter to investors this weekend saying it is to launch a “liquidity review” of its funds.

Visiting hours for your money will be from 1-3 pm daily, with 45 days notice. But don’t bother, it’s comatose. We’ll call you, if and when we detect a pulse.

It is also going to stop investors making withdrawals from its $1.5 billion (£930m) Market Neutral fund for six months. The review will decide the best way to preserve capital in GLG’s 40 funds.

Capital preservation is at the core of our mission. If that means not giving the remnants back to its rightful owners, well, there’s a lot of it about. 

The Mayfair-based firm, run by founders Noam Gottesman and Pierre Lagrange, will also tell investors looking to quit the $2.5 billion Emerging Markets fund that they will not receive a full return as a tranche of the fund’s investments is too illiquid to sell.

We opened a couple of bags that Coffey left under his desk, and found a report stating that toast is not a liquid. While we assess the portfolio implications of this discovery, you may continue to pay the two per cent annual management fee — “butter” — on the toast.

The Emerging Markets fund, which has lost half of its value this year...

It’s actually down 85 percent, but we went with the new International Ratting Cartel Trust Rating 3 on the toast — i.e. ‘a tranche’ — because it still has sufficient carbon content for potential diamond formation.

...It has also emerged that New York-listed GLG would breach a loan covenant if the total assets under management fall below $15 billion this year, according to a Securities and Exchange Commission filing. However, its funds are still well above this level...

And will remain so, now we’ve nailed the exits shut. Thank you for playing.

GLG warns investors about big shake-up

by Iain Dey and Kate Walsh

The Sunday Times Nov. 2 2008