August 5, 2014 / 12:10 PM / in 4 years

UPDATE 1-Och-Ziff reports record assets that help boost earnings

(Adds details about quarter, quote)

By Svea Herbst-Bayliss

BOSTON, Aug 5 (Reuters) - Och-Ziff Capital Management Group LLC, one of a handful of publicly listed hedge fund firms, reported higher quarterly earnings on Tuesday as assets rose to a record amid fresh demand for portfolios investing in real estate, stocks and credit.

The New York-based company reported second-quarter distributable earnings of $90.4 million, or 18 cents, as assets under management hit $45.9 billion on June 30.

Distributable earnings excluded costs from Och-Ziff’s November 2007 initial public offering.

The results matched the average analyst estimate, according to Thomson Reuters I/B/E/S. A year earlier the company earned $77.5 million, or 16 cents a share.

The company will pay a dividend of 17 cents a share on Aug. 22 to holders of record on Aug. 15. In May it paid a dividend of 23 cents.

Assets under management have grown 25 percent since the end of the second quarter of 2013, the company said. Clients added $5.9 billion in new money during that time while $3.4 billion came from performance-related appreciation. Pension funds, private bank clients, and foreign governments have invested with Och-Ziff in recent years, choosing its relatively conservative investment style.

The company has taken in more new money in the first seven months of 2014 than all of 2013.

Year to date through August 1st, our organic net inflows exceeded our full-year 2013 total by 46 percent, Daniel Och, chairman and chief executive officer, said in a statement.

He said he expected pension funds and other institutions to continue to increase their allocations to alternative asset managers. “We will be a substantial beneficiary of his secular trend as we further expand and diversify our business,” Och said.

The bulk of the assets were invested in its multistrategy hedge funds, including $27 billion in the flagship OZ Master Fund, but credit portfolios and collateralized loan obligations also grew, with a 34 percent and 82 percent jump in demand, respectively, from a year ago.

In the first half of the year OZ Master returned 2.15 percent while the OZ Asia Master Fund lost 6.6 percent and the OZ Europe Master Fund lost 1.92 percent. (Editing by Lisa Von Ahn and Jeffrey Benkoe)

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