Och-Ziff's Quarterly Profit More Than Quadruples as Hedge-Fund Assets Rise
Och-Ziff Capital Management Group LLC, the hedge-fund firm run by Daniel Och, said second-quarter profit climbed more than fourfold as the market recovery boosted assets and prompted clients to add new money.
Distributable profit, a measure excluding costs related to Och-Ziff’s 2007 initial public offering, rose to $57 million, or 14 cents a share, from $12.6 million, or 3 cents, a year earlier, the New York-based company said today. Earnings beat the 12-cent average estimate of nine analysts in a Bloomberg survey.
“We remain confident that the long-term, secular growth drivers of assets under management remain intact for the hedge fund industry,” Och said in the statement.
Clients added $1 billion in new money in the second quarter, lifting fees from overseeing assets and offsetting $388.2 million in performance-related losses. Och-Ziff is seeking to add assets and fees to reverse a 53 percent slump in its share price since it went public in November 2007.
Och-Ziff rose 79 cents, or 5.5 percent, to $15.15 by 4:15 p.m. in New York Stock Exchange composite trading, bringing gains this year to 10 percent.
Hedge-fund clients have invested a net $23.3 billion in hedge funds in the first two quarters, according to Chicago- based Hedge Fund Research Inc. Och-Ziff pulled in $2.2 billion in the year through Aug. 1.
Beating Peers
Och-Ziff’s assets under management increased to $25.9 billion as of Aug. 1 from $23.5 billion on Jan. 1 and $21.9 billion a year earlier. They peaked at $33.8 billion in June 2008.
Och-Ziff’s biggest fund, the OZ Master Fund, returned 2.8 percent in the first seven months of the year, while the Asia Master Fund advanced 3.6 percent. The OZ Europe Master Fund climbed 2.6 percent and the OZ Global Special Investments Master Fund gained 5 percent.
That compares with a decline of 0.1 percent for hedge funds on average in the first seven months of the year, according to a daily index published by Hedge Fund Research.
Och-Ziff’s distributable earnings don’t comply with generally accepted accounting principles. The firm reported a net loss of $89.4 million, or $1.05 a share, compared with a loss of $88.3 million, or $1.15, a year earlier. Costs associated with the firm’s IPO will cause net losses through 2012, the firm has said.
Och, a former Goldman Sachs Group Inc. trader, left the firm in 1994 to start a hedge fund for Ziff Brothers Investments LLC, which managed the Ziff family’s publishing fortune. He managed money solely for the Ziffs for five years and then opened his fund to outside investors in 1999.
To contact the reporter on this story: Katherine Burton in New York at kburton@bloomberg.net
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