GLG Partners Loses $280M in 4Q

Shares tumbled 6.8 percent, or 83 cents, to $13 in morning trading.

GLG Partners lost $282.5 million, or $1.56 per share, in the fourth quarter, compared with profit of $198.7 million, or $1.02 per share, in the fourth quarter of 2006.

The loss stemmed from $639 million in compensation costs as part of Freedom Acquisition Holding Inc.'s purchase of the company. Freedom Acquisition Holding was a "blank check" company or a company established expressly to buy another company that bought GLG last year.

Costs to pay employees mushroomed to $700 million in the fourth quarter, compared with $50 million in the fourth quarter of 2006.

Revenue, which the company collects mainly by charging fees for managing clients' investments, vaulted 56 percent to $446.5 million from $286.9 million. Performance fees, or the amount GLG skims from returns on clients' investments, leaped 54 percent.

Clients entrusted $2.9 billion to GLG Partners during the quarter as total investments under management swelled 20 percent to $24.6 billion. The owners of Freedom Acquisition Holding, after buying GLG, poured $875 million of their own money into funds at GLG.

GLG, which runs more than 40 funds, was founded by former Goldman Sachs employees Noam Gottesman, Pierre Lagrange and Jonathan Green in 1995.