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The City superstar who has just given up £160m bonus to set up his own hedge fund
Jonathan Prynn, Consumer Affairs Editor23 Apr 2008
One of London's top City stars is giving up a £160 million "golden handcuffs" share and bonus package to set up his own hedge fund.
Greg Coffey has quit London-based GLG Partners to start up his own company enabling him to make money without the constraints of working for another firm.
The Australian - who celebrates his 37th birthday this week - is considered such a player in the hedge fund world that shares in GLG Partners plummeted as rumours of his departure circulated.
The married father of two, who lives in Clapham, has built up a cult following in the financial markets because of the extraordinary success of the £3.5billion "emerging market" funds that he runs.
The funds specialise in investing in the economies in the developing world. His main GLG Emerging Markets fund was up almost 51 per cent last year and 60 per cent the year before, making him one of the two most successful hedge fund managers in the world.
But this year he has had a tougher time, with GLG Emerging Markets dropping 5.5 per cent by the end of last month and another nine per cent so far this month, according to investors. Mr Coffey first told his bosses he was quitting on Monday last week but was persuaded to withdraw his notice on Tuesday. He has been locked in talks with founders Noam Gottesman and Pierre LaGrange and other GLG board members ever since but the board eventually decided they could not meet their employee's terms.
He has now decided to stay until October to help his successor settle in but will forfeit £160 million of shares that he has been awarded as bonuses. It is expected that he will then set up his own London-based fund.
Mr Coffey earns up to £76 million a year, making him one of the world's best rewarded financial superstars. However, like many City high-fliers much of his reward packages are locked up in the form of shares he cannot touch for several years.
His departure is a huge blow for GLG Partners, a New York-listed fund. Mr Coffey's earnings are thought to have generated 60 per cent of the company's total performance fees last year.
Yesterday shares in GLG, which fell 15 per cent last week, rose 1.7 per cent in late morning trading to $9.20.
GLG said in a statement that, until he leaves, Mr Coffey would "continue to manage GLG funds focusing on investment performance and ensuring continuity for GLG's clients". It added: "The best interests of our fund investors has been and will continue to be the primary concern of both GLG and Greg."
The company is now trying to recruit a replacement to take over Mr Coffey's portfolios, although it is expected to offer investors the opportunity to redeem their holdings if they do not wish to stay.
Mr Coffey, known for preferring jeans and leather jackets to suits, graduated with a degree in actuarial studies from Sydney's Macquarie University and started trading emerging-market equity derivatives in 1994 at Bankers Trust Corp, which was bought by Deutsche Bank AG in 1999.
He later became a partner in a George Soros-backed fund and also headed global equity proprietary trading for Bank Austria, according to EuroHedge magazine.
Reader views (4)
Nicolas- you sound bitter and angry.
- David Kelly, Austin, Texas, 07/07/2008 13:42
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I have 100 monkeys tossing the coin every day in my backyard and I call the luckiest one "my superstar". I even set up a cult for him.
I tell you the best bet for 2008/09 - look at Greg Coffey's bet this year and bet against- every single time. You'll win, eventually if you are a lucky monkey that is.
- Nicolas, London, 24/04/2008 01:31
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Guess what, he is a non-dom [you acquire a domicile at birth] so I guess he won't bother setting up in London under the new rules? Monaco or Geneva or maybe Bermuda?
- James, New Malden, Surrey, 23/04/2008 15:45
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Good for him. It is fantastic to see this market producing more entrepreneurs that any other right now.
- Jonw, Kingston Upon Thames, 23/04/2008 14:10
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