August 3, 2010 / 11:25 AM / 8 years ago

UPDATE 2-Och-Ziff earnings climb, share price follows

* Distributable earnings $57.0 million

* 14 cents per adj Class A Share vs Street view 12 cents

* Shares up 3 percent; money manager stocks mostly lower

By Svea Herbst-Bayliss

BOSTON, Aug 2 (Reuters) - Hedge fund company Och-Ziff Capital Management Group (OZM.N) said quarterly profit more than quadrupled as investors added billions in new money, boosting its fee income.

Earnings handily beat Wall Street forecasts, prompting investors to push Och-Ziff shares up 3 percent while most other asset managers were lower.

Underscoring the company’s conservative management approach, where managers use very little borrowed money to boost returns, CEO Daniel Och said the 16-year-old company is well positioned to pull in more money in the months ahead as pension funds and others rely more heavily on hedge funds.

During the second quarter, when financial markets tumbled and the Standard & Poor’s 500 index fell 11 percent, Och-Ziff’s flagship Och-Ziff Master fund lost only 1.37 percent.

“Clearly, being down is not the goal,” Och told analysts and investors on a conference call, but losing far less money than the S&P “is huge value added.”

The company’s steady returns -- the flagship fund gained 1.31 percent in the first half, when the average hedge fund fell 1.45 percent --- have appealed to investors like Calpers, Americas biggest public pension fund, and might soon appeal to wealthy investors, Och said. There has been increasing interest from the “high-net-worth side,” he said.

For the quarter, the New York-based company reported “distributable earnings,” which exclude costs related to its November 2007 initial public offering, of $57 million, or 14 cents a share, up from from $12.6 million, or 3 cents a share, a year ago.

    Wall Street analysts, who look most closely at this number, had expected 12 cents a share, according to Reuters I/B/E/S.

    Its net loss was $89.4 million, compared with a loss of $88.3 million a year ago.

    The company raised its quarterly dividend to 11 cents a share from 9 cents.

    Strong returns have wooed investors, who added $1 billion in new money to Och-Ziff’s portfolios during the quarter. At the end of June, Och-Ziff’s total assets were $25.5 billion, up 16 percent from a year ago and up 3 percent from the end of the first quarter.

    Assets rose further to $25.9 billion on Aug. 1, the company said in a regulatory filing released on Tuesday.

    Since the end of last year, Och-Ziff, one of only a handful of publicly traded fund firms, said net inflows totaled $2.2 billion, while estimated performance-related appreciation totaled $600 million.

    Current market uncertainty and investor nervousness may help Och-Ziff pull in fresh assets and attract executives from other firms, said Och, a former star trader at Goldman Sachs. (Reporting by Svea Herbst-Bayliss; editing by Maureen Bavdek and John Wallace)

    0 : 0
    • narrow-browser-and-phone
    • medium-browser-and-portrait-tablet
    • landscape-tablet
    • medium-wide-browser
    • wide-browser-and-larger
    • medium-browser-and-landscape-tablet
    • medium-wide-browser-and-larger
    • above-phone
    • portrait-tablet-and-above
    • above-portrait-tablet
    • landscape-tablet-and-above
    • landscape-tablet-and-medium-wide-browser
    • portrait-tablet-and-below
    • landscape-tablet-and-below