UPDATE 3-Och-Ziff stock rises after earnings report

(Adds comment about new investment areas, background)

By Svea Herbst-Bayliss

BOSTON Feb 26 (Reuters) - Och-Ziff Capital Management Group LLC (OZM.N) reported stronger-than-expected earnings on Tuesday which helped the newly listed hedge fund company's shares jump as much as 10 percent.

The New York-based firm, which went public in November, disclosed a net loss but higher-than-expected distributable earnings, the number analysts look at most closely, in its first earnings report.

While analysts said the company got a lift from a much lower than expected 9 percent tax rate, they also liked that Och-Ziff's funds had consistently outperformed the broader Standard & Poor's benchmark.

"We find the fact the (Och-Ziff) was ahead of the S&P on a 1, 3, and 5, year basis, a trend that continued into January, as proof of the firm's ability to navigate through volatile periods," Goldman Sachs analyst Marc Irizarry wrote in a note.

Och-Ziff Chairman and Chief Executive Officer Dan Och said the company plans to keep looking for new investment areas, including in battered residential mortgages.

For the fourth quarter, Och-Ziff said it recorded a net loss of $774.6 million, after expenses of $3.3 billion for a reorganization connected with its initial public offering.

This compares with a $453 million profit in the year-ago quarter.

The company also reported distributable earnings of $505.5 million, or $1.27 per adjusted Class A share, for the quarter. Analysts, on average, had expected $1.19, according to Reuters Estimates.

Total assets swelled 48 percent to $33.4 billion, driven both by inflows and strong returns at the firm's funds. Assets in the firm's flagship OZ Master fund grew 28 percent to $19.8 billion. Management fees climbed 53 percent to $135.1 million.

Looking ahead, Och, a former Goldman Sachs trader who founded the firm in 1994 with the Ziff publishing family, expects to see strong growth.

"We believe we can accelerate our growth through the continued expansion of our private investment platforms and private portfolio, which we expect to become meaningful contributors to our earnings power over time," he said.

Only a small number of hedge funds, traditionally known to guard their trading techniques, have gone public, giving investors another chance of owning a piece of this fast growing $1.8 trillion industry.

The company's stock, like many other financial stocks, has suffered since January, but it staged a sharp turnaround on Tuesday, rising as much as 10 percent before paring some of its gains to be 8.3 percent higher to $22.91 in early afternoon trade. (Reporting by Svea Herbst-Bayliss; Editing by Dave Zimmerman and Tim Dobbyn)