Och-Ziff Distributable Profit Soars As Firm Scraps Annual High-Water Mark

Feb 11 2010 | 2:52pm ET

Och-Ziff Capital Management saw its distributable profit increase more than eightfold in the fourth quarter, as it cut its net loss and took in a quarter-billion dollars in new assets. The New York-based firm also announced a change in its fee structure.

Och-Ziff said distributable earning for the last three months of 2009 were $281.4 million. That’s almost 10 times the similar figure from the year-earlier period, when distributable earning were $28.9 million. It’s also up sharply from the third quarter, when the figure stood at $34.2 million.

The firm, which lost more than $11 billion in assets under management in 2008, is also continuing to rebuild its asset base. Och-Ziff managed $24 billion at the beginning of this month, $500 million more than at the beginning of January. Half of that increase came from fresh inflows.

“The capital inflow cycle for the hedge fund industry has begun,” CEO Daniel Och said.

Those new investors have a new performance fee structure. Och-Ziff, responding to its institutional investors, has done away with its annual high-water mark, which allowed the firm to begin charging performance fees again after one year, whether or not it had made up its losses. In its place is a perpetual high-water mark.

The firm, one of the largest hedge funds in the world, also made another concession to transparency, hiring a third-party administrator to verify its assets.

The one-year expiration did not kick in last year, as Och-Ziff was able to clear its high-water mark towards the end of last year. Thanks to the strong performance, the firm collected $345.6 million in incentive fees in the fourth quarter, up slightly from the year-earlier period. Management fees, by contrast, fell 29% from the fourth quarter of 2008 to $94.3 million, reflecting its lower asset base.

Och-Ziff also narrowed its fourth-quarter loss. The firm’s net loss was $47.2 million, down from $112.2 million a year earlier. Revenues soared more than threefold to $440.6 million.


In Depth

Q&A: Executive Recruiter Talks Hedge Fund Closures, Hiring Trends

Dec 19 2014 | 6:58am ET

This year, hedge funds have been closing at a rate not seen since the financial...

Lifestyle

Cooper-Hohn Won't Contest Divorce Settlement

Dec 18 2014 | 9:51am ET

The ex-wife of hedge fund billionaire Christopher Hohn will not contest a divorce...

Guest Contributor

Alternative Investment Funds Face A Communications Imperative

Dec 19 2014 | 6:10am ET

A handful of the top alternative investment firms on both sides of the Atlantic...

 

Sponsored Content

Editor's Note

    Guidelines for Guest Articles

    Oct 22 2014 | 9:46am ET

    We are always looking for guest articles from hedge fund managers and buy-side firms.

    If you are interested in submitting a contributed piece for possible publication on FINalternatives, please take a look at the specs. Read more…

 

Futures Magazine

December 2014 Cover

Futures 2014 person of the year

Jeff Sprecher was simply looking for a platform to trade energies when launching ICE 14 years ago but it has grown to reach the pinnacle of both the listed futures and equities world.

The Alpha Pages

TAP July/August 2014 Cover

The Alpha Pages Interview: Senator Rand Paul

Senator Paul sat down in the debut series of the Alpha Pages Interview to discuss the broken tax code, regulation surrounding Bitcoin, and his plans for the 2016 Presidential election.