Och-Ziff Profit Dips As Taxes Soar

Nov 2 2011 | 10:52am ET

Och-Ziff Capital Management's assets under management and revenues continued to rise in the third quarter, but Uncle Sam's share grew, too.

The New York-based hedge fund said that its quarterly distributable profit fell 4% year-on-year to $49.9 million, as its tax rate almost doubled from the second quarter. Och-Ziff said it paid 42% in taxes in the third quarter compared to 22% in the second and 25% in the year-earlier period.

The firm's other numbers were good: Assets under management rose 8% year-on-year to $28.5 billion, rising another $400 million—including $200 million in inflows—since the end of the quarter. Revenue jumped 16% to $129.7 million, most of it due to a 15% increase in management fees.

Performance figures were more mixed. The firm's flagship is roughly flat through last month, while its Asia fund is down 1.4% and its European fund 3.3%. Och-Ziff's opportunistic fund is up 3.1%.

"During the third quarter of 2011, the global financial markets experienced significant turbulence in response to the European sovereign debt crisis and weaker macroeconomic conditions," CEO Daniel Och said. "Against this backdrop, we protected investor capital through our consistent and disciplined investment and risk management processes."

Including costs related to its initial public offering four years ago, Och-Ziff posted a $93.1 million loss on the quarter.


In Depth

Q&A: TCA Fund Management's Bob Press on Small-Cap Private Equity

Aug 25 2016 | 8:55pm ET

The emergence of private credit as a replacement for traditional bank financing...

Lifestyle

Kiawah: Island Reversal

Aug 24 2016 | 9:59pm ET

Looking for real estate investments but the typical real estate fare isn’t cutting...

Guest Contributor

Old Hill Partners: Embrace Illiquidity

Aug 9 2016 | 2:39pm ET

The age-old financial concept that higher yields are the result of higher risk and...