May 3, 2011 / 11:49 AM / 6 years ago

UPDATE 2-Och Ziff quarterly profit beats estimates

* Distributable earnings at 16 cents a share

* Wall Street had expected 14 cents a share

* Rise in management fees boosted earnings (Adds details on earnings)

BOSTON, May 3 (Reuters) - Och-Ziff Capital Management Group (OZM.N) reported a 33 percent rise in quarterly profit on Tuesday, beating Wall Street estimates, as demand for its hedge funds boosted management fees.

Having pulled in nearly $2 billion in fresh money over the last year, Och-Ziff, one of only a handful of publicly traded hedge fund firms, said its management fees climbed nearly 19 percent.

Distributable earnings rose to $65.2 million, or 16 cents per share, from $49.2 million, or 12 cents per share, a year earlier. Analysts on average had expected 14 cents per share, according to Thomson Reuters I/B/E/S.

Total revenue climbed to $138.4 million from $109.4 million as management fee revenue rose to $121.3 million.

The New York-based company, which oversees money for investors like Calpers, America’s largest public pension fund, highlights distributable earnings -- which excludes costs related to its November 2007 initial public offering -- as the best measure of its performance.

The company reported a net loss of $95.5 million, or 99 cents, for the quarter, related largely to expenses from the IPO.

Known for its conservative management style, Och-Ziff has benefited from investors’ new appetite for alternative investments like hedge funds. At the end of the first quarter, assets under management stood at $29 billion, up from $27.9 billion at the end of the previous quarter and up from $24.8 billion a year earlier.

“We believe that capital inflows into the hedge fund industry are accelerating as institutional investors seek to increase the proportion of non-correlated strategies in their portfolios,” Chairman and Chief Executive officer Daniel Och said in a statement. “Our dialog with both current and prospective investors is active,” Och added.

Since the end of the quarter, assets have climbed even more and stood at $29.4 billion on May 1, the company said, citing $400 million in new inflows and $1.1 billion in performance related appreciation for the rise.

At the end of the first quarter, the OZ Master Fund, the firm’s biggest, had $20.1 billion in assets and had returned 3.36 percent during the first three months of the year when the average hedge fund gained 1.99 percent.

For the first quarter of 2011, Och-Ziff will pay out a dividend of 13 cents a share for holders of record on May 12. That is up from the 9 cents a share dividend the company paid out for the first quarter of 2010. (Reporting by Svea Herbst-Bayliss, editing by Lisa Von Ahn, Dave Zimmerman)

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