August 2, 2011 / 11:55 AM / 8 years ago

UPDATE 3-Och-Ziff profit beats estimates, shares rise

* Distributable earnings at 16 cent a share

* Analysts were expecting 15 cents a share

* Raises dividend a penny to 14 cents a share

* Och-Ziff shares rise 1.5 percent (Updates with quotes, share price movement)

By Ashley Lau

NEW YORK, Aug 2 (Reuters) - Hedge fund company Och-Ziff Capital Management Group said its second-quarter profit rose 19 percent, beating Wall Street estimates, as investors poured more than $1 billion in new money into its funds.

New York-based Och-Ziff (OZM.N), one of only a handful of publicly traded hedge fund firms, said on Tuesday that its distributable earnings rose to $67.7 million, or 16 cents a share, from $57 million, or 14 cents a share, a year earlier.

The earnings beat Wall Street estimates by a penny a share, according to Thomson Reuters I/B/E/S.

In what has been a rough year for the $2 trillion hedge fund industry, Och-Ziff’s flagship Master Fund is up 3.4 percent. Based on performance, Och-Ziff founder and Chief Executive Officer Dan Och is having a better than year than other hedge fund titans like John Paulson, David Einhorn and William Ackman.

“Institutional investor interest in Och-Ziff remains strong relative to the hedge fund industry,” said the CEO during a morning conference call to discuss the firm’s results.

“We still took in a large amounts of capital,” he said, despite the shaky economic environment over the past few months. “If anything, investors are more and more understanding of the differentiation of what we do.”

Revenue rose 13.3 percent to $128 million.

Still, the company reported a wider net loss of $93.4 million, or 96 cents a share, compared to $89.4 million, or $1.05 a share, in the year ago period. The company blamed the bigger net loss to costs associated with the vesting of restricted shares.

The company contends distributable earnings is a better way to measure its operating performance because it excludes costs related to the company’s 2007 initial public offering and certain tax adjustments.

Och-Ziff said higher management fees as a result of increased assets under management contributed to its better-than-expected performance.

The company said it would pay a dividend of 14 cents a share for holders of record on Aug. 22, an increase of one penny from the first quarter.

The fund, which oversees money for investors like Calpers, the largest U.S. public pension fund, has benefited from investors’ appetite for alternative investments like hedge funds.

Assets under management at Och-Ziff’s Master Fund rose 13 percent to $20.7 billion from a year earlier.

Overall, the company manages $29.9 billion in assets and said it has taken in $1.1 billion in net new money from investors this year.

Och-Ziff’s flagship Master Fund, which was up 3.4 percent for the year as of July 31, has performed better than many other large hedge funds. In fact, the average hedge fund was down 2.12 percent in the first half of 2011, according to Hedge Fund Research, an industry research firm.

Och-Ziff shares rose 1.5 percent in early trading Tuesday to $12.48, but are still down about 20 percent since the start of the year. (Reporting by Ashley Lau, editing by Gerald E. McCormick, Lisa Von Ahn, Dave Zimmerman)

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