Och-Ziff Profit Rises, Loss Grows On IPO Charges

Aug 3 2010 | 12:47pm ET

Och-Ziff Capital Management said that its second-quarter loss widened slightly, but that its distributable profits increased more than fourfold as assets under management rose.

The New York-based hedge fund giant’s quarterly loss was $89.4 million, up from $88.3 million a year earlier. But the firm took charges of $411.8 million related to its initial public offering three years ago, so its distributable earnings—which exclude those charges—rose to $57 million from $12.6 million, easily topping analysts’ expectations.

The firm said that client inflows totaled $1 billion during the quarter; performance losses—the firm’s flagship OZ Master Fund dropped 1.37% during the quarter—were $388.2 million, leaving the firm with $25.3 billion in assets at the beginning of July. Since then, the firm’s assets have grown a further $400 million, thanks in part to a 1.46% return in the Master fund.

Through July, the Master fund is up 2.8%, while Och-Ziff’s Global Special Investments fund is up 5%, its Asia fund 3.6% and its Europe fund 2.6%.

“We remain confident that the long-term, secular growth drivers of assets under management remain intact for the hedge fund industry,” firm founder Daniel Och said.


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