Och-Ziff: A Global Bet on Alternative Assets

08/27/2018 5:00 am EST


David Fried

Editor, The Buyback Letter

Och-Ziff Capital Management Group (OZM) is one of the largest institutional alternative asset managers in the world, with offices in New York, London, Hong Kong, Mumbai, Beijing, Shanghai and Houston, notes David Fried, a specialist in stocks undergoing buybacks and shares repurchases and editor of the aptly named, The Buyback Letter.

They provide asset management services to investors globally through multi-strategy funds, dedicated credit funds, including opportunistic credit funds and Institutional Credit Strategies products, real estate funds and other alternative investment vehicles.

Their investing goal is to generate consistent, positive, absolute returns across market cycles, with low volatility compared to the broader markets, and with an emphasis on preservation of capital. Their funds invest across multiple strategies and geographies.

Och-Ziff's global investment strategies used include convertible and derivative arbitrage, corporate credit, long/short equity special situations, merger arbitrage, private investments, real estate and structured credit. As of this month, Oz Management had about $33.5 billion in assets under management.

As one of the world's biggest hedge fund firms and one of only a handful of publicly traded ones, Oz Management had long stayed out of the limelight. However, they have been in the news in the last few months for installing a new slate into leadership positions, signaling a generational turnover and a rebuilding effort.

New CEO Robert Shafir, a former executive at Credit Suisse Group AG (CS), has been reorganizing the company by shrinking or shuttering non-core businesses, including the company's European and Asia hedge funds. The firm had been tarnished by a bribery scandal in Africa, with them paying a $412 million fine to settle the charges.

Assets are growing and analysts think the performance has been solid. The OZ Master Fund (the company's largest multi-strategy fund) was up 3.1% gross and 2.3% net for Q2, up 6.2% gross and 4.4% net for the first half of 2018, and up 10.8% gross and 7.3% net over the trailing 12 months through June 30, 2018.

Oz had distributable earnings of $7.1 million, or 1 cent a share in Q2, and $52.4 million, or $0.10 a share, for the first half of 2018. Shares outstanding have been reduced by 5.545% in the last 12 months.

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