5 May 2010
Och-Ziff Capital Management Group has reported a rise in assets under management to $26 billion at May 1 from the end of 2009, reflecting year-to-date capital net inflows of $1.6 billion and performance-related appreciation of $900 million.
Year-to-date estimated net returns through April 30 were: OZ Master Fund, up 3.6%; the OZ Europe Master Fund, up 5.1%; the OZ Asia Master Fund, up 6.3% and the OZ Global Special Investments Master Fund, up 5.0%.
For the 2010 first quarter, Och-Ziff reported a GAAP Net Loss of $88.6 million, or $1.07 per basic and diluted Class A Share, compared to a GAAP Net Loss of $81.9 million, or $1.07 per basic and diluted Class A Share, for the 2009 first quarter. Additionally, the GAAP Net Loss in the 2010 first quarter was driven by non-cash expenses of $30.8 million for the amortization of equity-based compensation.
Distributable earnings for the first quarter were $49.2 million, or $0.12 per adjusted Class A Share, compared with $27.2 million, or $0.07 per Adjusted Class A Share, in the 2009 first quarter. The year-over-year increase was primarily attributable to higher management fees as a result of higher assets under management as well as lower compensation and non-compensation expenses, and lower adjusted income taxes.
Och-Ziff's assets under management were $24.8 billion as of March 31, 2010, 8% higher than the $23.1 billion in assets under management as of December 31, 2009 and 10% higher than the $22.6 billion in assets under management as of March 31, 2009. The $2.2 billion year-over-year increase was driven by performance-related appreciation of $4.2 billion, partially offset by capital net outflows of $2.0 billion during the period. During the 2010 first quarter, the $1.7 billion increase in assets under management was driven by capital net inflows of $1.0 billion and performance-related appreciation of $744 million.
The OZ Master Fund was by far the biggest product with AUM of $18.1 billion. It gained 2.72% in the first quarter, trailing the OZ Europe Master Fund, which gained 4.41%. The OZ Asia Master Fund returned 5.02% and the OZ Global Special Investments Master Fund returned 3.82%. Och Zif said the 2010 first quarter performance was principally driven by structured credit and distressed credit in the U.S. and Europe, long/short equity special situations in the U.S. and Europe, and convertible arbitrage in Asia.
Total Revenues for the 2010 first quarter were $100.0 million, an 8% increase from Total Revenues for the 2009 first quarter of $92.6 million. Management Fees were $99.6 million, 8% higher than Management Fees in the prior year period of $92.4 million.
Total Revenues increased year-over-year due primarily to higher Management Fees resulting from the growth in assets under management from January 1, 2009 to January 1, 2010. This growth was driven by performance-related appreciation during this period, partially offset by capital net outflows. Management Fees are generally charged on assets under management as of the beginning of the quarter.
Compensation and Benefits expenses for the 2010 first quarter totaled $18.0 million, 12% lower than Compensation and Benefits expenses for the 2009 first quarter of $20.4 million. The year-over-year decrease was principally attributable to a lower level of one-time, non-recurring bonus payments. Non-Compensation Expenses for the 2010 first quarter were $19.6 million, a 19% decrease from Non-Compensation Expenses for the 2009 first quarter of $24.1 million. The decrease was primarily due to lower interest expense on the Company's variable rate borrowings resulting from the decline in LIBOR rates and the repayment of approximately $105 million of the Company's term loan in 2009. Also contributing to the decrease were lower insurance costs.
Year-to-date estimated net returns through April 30 were: OZ Master Fund, up 3.6%; the OZ Europe Master Fund, up 5.1%; the OZ Asia Master Fund, up 6.3% and the OZ Global Special Investments Master Fund, up 5.0%.
"We continued to generate consistent, strong risk-adjusted returns during the first quarter and in April," said Daniel Och, Chairman and CEO. "The investment environment today is characterized by a diversified set of opportunities globally that plays to the strengths of our investment process and international capabilities. Our year-to-date results were driven by our multi-strategy, multi-geographic approach, and by opportunities in structured credit, distressed credit and equity restructuring in the U.S. and Europe and convertible arbitrage in Asia. This has allowed us to extend our track record of generating strong investment performance, and to grow assets under management.”
Och added: "We are now seeing that the capital inflow cycle for the hedge fund industry is underway and that we have been a leading beneficiary of these inflows. Based on our dialogue with fund investors, we expect this trend to continue, and as a result we should experience additional growth in assets under management over time. Fund investors continue to indicate strong interest in Och-Ziff, and we remain confident that they view us as a manager of choice."
For the 2010 first quarter, Och-Ziff reported a GAAP Net Loss of $88.6 million, or $1.07 per basic and diluted Class A Share, compared to a GAAP Net Loss of $81.9 million, or $1.07 per basic and diluted Class A Share, for the 2009 first quarter. Additionally, the GAAP Net Loss in the 2010 first quarter was driven by non-cash expenses of $30.8 million for the amortization of equity-based compensation.
Distributable earnings for the first quarter were $49.2 million, or $0.12 per adjusted Class A Share, compared with $27.2 million, or $0.07 per Adjusted Class A Share, in the 2009 first quarter. The year-over-year increase was primarily attributable to higher management fees as a result of higher assets under management as well as lower compensation and non-compensation expenses, and lower adjusted income taxes.
Och-Ziff's assets under management were $24.8 billion as of March 31, 2010, 8% higher than the $23.1 billion in assets under management as of December 31, 2009 and 10% higher than the $22.6 billion in assets under management as of March 31, 2009. The $2.2 billion year-over-year increase was driven by performance-related appreciation of $4.2 billion, partially offset by capital net outflows of $2.0 billion during the period. During the 2010 first quarter, the $1.7 billion increase in assets under management was driven by capital net inflows of $1.0 billion and performance-related appreciation of $744 million.
The OZ Master Fund was by far the biggest product with AUM of $18.1 billion. It gained 2.72% in the first quarter, trailing the OZ Europe Master Fund, which gained 4.41%. The OZ Asia Master Fund returned 5.02% and the OZ Global Special Investments Master Fund returned 3.82%. Och Zif said the 2010 first quarter performance was principally driven by structured credit and distressed credit in the U.S. and Europe, long/short equity special situations in the U.S. and Europe, and convertible arbitrage in Asia.
Total Revenues for the 2010 first quarter were $100.0 million, an 8% increase from Total Revenues for the 2009 first quarter of $92.6 million. Management Fees were $99.6 million, 8% higher than Management Fees in the prior year period of $92.4 million.
Total Revenues increased year-over-year due primarily to higher Management Fees resulting from the growth in assets under management from January 1, 2009 to January 1, 2010. This growth was driven by performance-related appreciation during this period, partially offset by capital net outflows. Management Fees are generally charged on assets under management as of the beginning of the quarter.
Compensation and Benefits expenses for the 2010 first quarter totaled $18.0 million, 12% lower than Compensation and Benefits expenses for the 2009 first quarter of $20.4 million. The year-over-year decrease was principally attributable to a lower level of one-time, non-recurring bonus payments. Non-Compensation Expenses for the 2010 first quarter were $19.6 million, a 19% decrease from Non-Compensation Expenses for the 2009 first quarter of $24.1 million. The decrease was primarily due to lower interest expense on the Company's variable rate borrowings resulting from the decline in LIBOR rates and the repayment of approximately $105 million of the Company's term loan in 2009. Also contributing to the decrease were lower insurance costs.
