Och-Ziff Capital Management Group LLC (NYSE: OZM) (the "Company" or "Och-Ziff")
today reported GAAP Net Income(1) of $10.7 million, or $0.06 per basic and $0.05
per diluted Class A Share, for the second quarter ended June 30, 2014. The
Company also declared a $0.17 per share cash dividend on its Class A Shares for
the 2014 second quarter.
Summary Highlights
-- Distributable Earnings of $90.4 million, or $0.18 per Adjusted Class A
Share, for the 2014 second quarter, 17% higher than $77.5 million, or
$0.16 per Adjusted Class A Share, for the 2013 second quarter.
-- Estimated assets under management of $45.7 billion as of August 1, 2014,
which reflected year-to-date capital net inflows of approximately $4.5
billion and performance-related appreciation of $894.4 million.
-- Estimated year-to-date net returns through July 31, 2014 of the OZ
Master Fund of +2.0%, the OZ Asia Master Fund of -4.4% and the OZ Europe
Master Fund of -1.7%.
"Year-to-date through July 31st, our performance reflected our ability to
actively manage our capital allocations across strategies and geographies," said
Daniel S. Och, Chairman and Chief Executive Officer of Och-Ziff. "The
consistency of our performance and our ability to protect investor capital are
hallmarks of our approach to investing and managing risk, and are at the core of
the value that we deliver to the investors in our funds. We believe that we are
well positioned to create significant, incremental value as we continue to
execute on our strategy of diversifying our product offerings.
"Our assets under management have grown rapidly due to the strong momentum
across our products. Year-to-date through August 1st, our organic net inflows
exceeded our full-year 2013 total by 46%, and investor interest in our platforms
remains high. Globally, we believe that pension funds and other institutions
will continue to increase their allocations to alternative asset managers, and
that we will be a substantial beneficiary of this secular trend as we further
expand and diversify our business."
(1) References to the Company's GAAP Net Income throughout this press release
refer to the Company's GAAP Net Income Allocated to Class A Shareholders.
GAAP NET INCOME ALLOCATED TO CLASS A SHAREHOLDERS
For the 2014 second quarter, Och-Ziff reported GAAP Net Income of $10.7 million,
or $0.06 per basic and $0.05 per diluted Class A Share, compared to $3.8
million, or $0.03 per basic and $0.02 per diluted Class A Share, for the 2013
second quarter. For the 2014 first half, Och-Ziff reported GAAP Net Income of
$34.6 million, or $0.20 per basic and diluted Class A Share, compared to $33.9
million, or $0.22 per basic and diluted Class A Share, for the 2013 first half.
The year-over-year improvement in the Company's second quarter GAAP results was
primarily due to higher management fees, partially offset by lower incentive
income. The year-over-year improvement in the Company's first half GAAP results
was primarily due to higher management fees and lower non-compensation expenses,
partially offset by lower incentive income and increased compensation and
benefits expenses, as discussed in the "Economic Income (Non-GAAP)" section of
this press release.
The Company's GAAP results in the 2014 second quarter and first half included
non-cash expenses of $28.7 million and $55.9 million, respectively, for
equity-based compensation. These expenses primarily relate to Och-Ziff Operating
Group A Units ("Group A Units"), which represent equity interests in the
Company's principal operating subsidiaries (the "Och-Ziff Operating Group"),
granted to executive managing directors, as well as Class A Restricted Share
Units ("RSUs") granted to employees and executive managing directors. Each RSU
represents the right to receive one Class A Share upon vesting. Vested Group A
Units may be exchanged on a one-to-one basis for Class A Shares, subject to
transfer restrictions and minimum retained ownership requirements.
Throughout this press release, the Company presents financial measures that are
not prepared in accordance with GAAP. For a discussion of these non-GAAP
measures, please see the section titled "Non-GAAP Financial Measures" at the end
of this press release.
DISTRIBUTABLE EARNINGS (NON-GAAP)
The Company's Distributable Earnings for the 2014 second quarter were $90.4
million, or $0.18 per Adjusted Class A Share, 17% higher than $77.4 million, or
$0.16 per Adjusted Class A Share, for the 2013 second quarter. Distributable
Earnings for the 2014 first half were $218.2 million, or $0.43 per Adjusted
Class A Share, 2% higher than $214.4 million, or $0.45 per Adjusted Class A
Share, for the 2013 first half.
The year-over-year increases in Distributable Earnings were primarily due to
higher management fees and lower non-compensation expenses, partially offset by
lower incentive income and higher compensation and benefits expenses. Please see
the "Economic Income (Non-GAAP)" section of this press release for a discussion
of the drivers impacting the Company's revenues and operating expenses.
Distributable Earnings is a non-GAAP measure. For reconciliations of
Distributable Earnings to the respective GAAP Net Income for the periods
discussed above, please see Exhibits 2 and 3 that accompany this press release.
Additionally, please see the section titled "Non-GAAP Financial Measures" at the
end of this press release, including the definitions of Distributable Earnings
and Adjusted Class A Shares.
ASSETS UNDER MANAGEMENT
Assets under management by fund:
% Change(1)
-----------------
Jun.
2014 Jun.
vs. 2014 vs.
June 30, December 31, June 30, Dec. Jun.
(dollars in billions) 2014 2013 2013 2013 2013
---------- ------------ ---------- ------- --------
Multi-strategy funds
OZ Master Fund $ 27.1 $ 25.2 $ 22.8 8% 19%
OZ Asia Master Fund 1.4 1.3 1.2 8% 17%
OZ Europe Master Fund 1.3 1.4 1.9 -7% -32%
Other multi-strategy
funds 4.2 3.8 3.3 11% 27%
---------- ------------ ----------
Multi-strategy funds 34.0 31.7 29.2 7% 16%
Credit funds 5.1 4.4 3.8 16% 34%
CLOs 4.0 2.6 2.2 54% 82%
Real estate funds 1.7 0.8 0.9 113% 89%
Other 1.1 0.7 0.5 57% 120%
---------- ------------ ----------
Total $ 45.9 $ 40.2 $ 36.6 14% 25%
========== ============ ==========
(1) Rounding differences may occur.
As of June 30, 2014, assets under management totaled $45.9 billion, an increase
of $9.3 billion, or 25%, from June 30, 2013, which was driven by capital net
inflows of $5.9 billion and performance-related appreciation of $3.4 billion.
These capital net inflows included $1.9 billion related to three CLOs that the
Company closed in the year-over-year period, as well as $1.2 billion related to
the launch of the Company's third real estate fund in 2014.
During the month of June, the Company had approximately $621.9 million of
intra-month capital net inflows, primarily related to a CLO that the Company
closed in June, which are included in the $45.9 billion of assets under
management as of June 30, 2014. Assets under management decreased to an
estimated $45.7 billion as of August 1, 2014. This decrease reflected estimated
performance-related appreciation of approximately $44.6 million in July and
capital net outflows of approximately $252.9 million, which was comprised of
approximately $311.7 million of net outflows on July 1, 2014 and approximately
$58.8 million of net inflows from July 2, 2014 to August 1, 2014.
INVESTMENT PERFORMANCE
For the 2014 first half, the performance of the OZ Master Fund was driven
primarily by its credit-related strategies. The performance of the OZ Asia
Master Fund and the OZ Europe Master Fund was driven by these funds' negative
returns in their long/short equity special situations strategies, partially
offset by positive performance in their credit-related strategies.
Net returns by fund(1):
2014
-----------------------------------------
April May June 2Q 1H - 2014
------ ------ ------ ------ ---------
OZ Master Fund -1.23% 1.53% 1.43% 1.72% 2.15%
OZ Asia Master Fund -2.16% -0.16% 2.40% 0.03% -6.66%
OZ Europe Master Fund -1.24% -1.00% 0.35% -1.89% -1.92%
(1) Please see important disclosures on Exhibit 7 that accompanies this press
release.
ECONOMIC INCOME (NON-GAAP)
In addition to analyzing the Company's results on a GAAP basis, management also
reviews the Company's results on an "Economic Income" basis. Economic Income
excludes certain adjustments that are required for presentation of the Company's
results on a GAAP basis, but that management does not consider when evaluating
operating performance in any given period.
For reconciliations of Economic Income and its components to the respective GAAP
measures, please see Exhibits 2 through 5 that accompany this press release.
Additionally, please see the discussion of "Non-GAAP Financial Measures" at the
end of this press release.
Economic Income Revenues (Non-GAAP)
Economic Income revenues for the 2014 second quarter were $174.2 million, up 10%
from $158.0 million for the 2013 second quarter. Management fees were $159.7
million, 18% higher than management fees of $134.9 million for the prior-year
period. Incentive income was $14.4 million, compared to $22.9 million for the
prior-year period.
Economic Income revenues for the 2014 first half were $388.2 million,
essentially unchanged from the $386.6 million for the 2013 first half.
Management fees were $314.2 million, 20% higher than management fees of $261.3
million for the prior-year period. Incentive income was $73.4 million, compared
to $124.2 million for the prior-year period.
The year-over-year increase in Economic Income revenues for the quarter-to-date
period was primarily due to higher management fees resulting from the
year-over-year growth in assets under management, which was driven by a
combination of performance-related appreciation and capital net inflows. The
year-over-year increase in management fees was partially offset by lower
incentive income related to fund investor redemptions and assets subject to
one-year measurement periods, partially offset by higher incentive income on
certain longer-term credit assets.
The year-over-year increase in Economic Income revenues for the year-to-date
period was primarily due to higher management fees resulting from the
year-over-year growth in assets under management, which was driven by a
combination of performance-related appreciation and capital net inflows. The
year-over-year increase in management fees was partially offset by a decrease in
incentive income. This decrease was primarily related to $69.6 million of
incentive income crystallized in the first quarter of 2013 on certain credit
assets that was not repeated in 2014, partially offset by tax distributions
taken on the Company's longer-term assets.
The average management fee rate was 1.45% for the 2014 second quarter, compared
to 1.53% for the 2013 second quarter, and 1.48% for the 2014 first half,
compared to 1.54% for the 2013 first half. These declines were due primarily to
an increase in assets under management in the Company's dedicated credit
platforms and CLOs, which earn lower management fees as is reflective of the
market for these products. Additionally, the majority of the capital committed
to the Company's third real estate fund in the 2014 first half did not begin to
earn management fees until July 1, 2014.
Compensation and Benefits (Non-GAAP)
Compensation and benefits for the 2014 second quarter totaled $29.8 million, an
18% increase from compensation and benefits of $25.3 million for the 2013 second
quarter. Salaries and benefits totaled $25.1 million, 16% higher than salaries
and benefits of $21.7 million in the prior-year period. Compensation and
benefits for the 2014 first half totaled $59.0 million, a 21% increase from
compensation and benefits of $48.8 million for the 2013 first half. Salaries and
benefits totaled $50.7 million, 18% higher than salaries and benefits of $43.1
million in the prior-year period. The increase in both periods was due primarily
to the Company's hiring activities globally.
The ratio of salaries and benefits to management fees was 16% in each of the
2014 second quarter and first half, respectively, compared to 16% and 17% in the
2013 second quarter and first half, respectively.
Non-Compensation Expenses (Non-GAAP)
Non-compensation expenses for the 2014 second quarter totaled $31.1 million, a
9% decline from non-compensation expenses of $34.1 million for the 2013 second
quarter. Non-compensation expense for the 2014 first half totaled $60.0 million,
8% lower than non-compensation expenses of $64.9 million for the prior-year
period. The decrease for both periods was driven primarily by lower professional
services fees, partially offset by higher insurance costs.
The ratio of non-compensation expenses to management fees was 19% for the 2014
second quarter and first half, respectively, compared to 25% for the 2013 second
quarter and first half, respectively.
Economic Income (Non-GAAP)
Economic Income for the 2014 second quarter was $113.4 million, up 15% from
Economic Income of $98.5 million for the 2013 second quarter. Economic income
for the 2014 first half was $274.2 million, 1% higher than Economic Income of
$272.7 million in the 2013 first half.
The increase in Economic Income for both periods was primarily due to an
increase in management fees and lower non-compensation expenses, partially
offset by a decrease in incentive income and higher compensation and benefits
expenses.
CAPITAL
As of June 30, 2014, the number of Class A Shares outstanding was 171,725,986.
For purposes of calculating Distributable Earnings per Share, the Company
assumes that all the interests held by its executive managing directors and Ziff
Investors Partnership, L.P. II and certain of its affiliates and control persons
(the "Ziffs") (until they exchanged their remaining interests during the 2014
second quarter) in the Och-Ziff Operating Group (collectively, "Partner Units"),
as well as RSUs outstanding during the applicable period, have been converted on
a one-to-one basis into Class A Shares ("Adjusted Class A Shares"). For the
second quarter and first half ended June 30, 2014, the total weighted-average
Adjusted Class A Shares outstanding were 508,640,345 and 506,999,963,
respectively.
DIVIDEND
The Board of Directors of Och-Ziff declared a 2014 second-quarter dividend of
$0.17 per Class A Share. The dividend is payable on August 22, 2014 to holders
of record as of the close of business on August 15, 2014.
For U.S. federal income tax purposes, the dividend will be treated as a
partnership distribution. Based on the best information currently available, the
Company estimates that when calculating withholding taxes, the entire amount of
the 2014 second-quarter dividend will be treated as U.S. source dividend income.
Non-U.S. holders of Class A Shares are generally subject to U.S. federal
withholding tax at a rate of 30% (subject to reduction by applicable treaty or
other exception) on their share of U.S. source dividends and certain other types
of U.S. source income realized by the Company. With respect to interest,
however, no withholding is generally required if proper certification (on an IRS
Form W-8) of a beneficial owner's foreign status has been filed with the
withholding agent. Non-U.S. holders must generally provide the withholding agent
with a properly completed IRS Form W-8 to obtain any reduction in withholding.
The Company will host a conference call today, August 5, 2014, at 8:30 a.m.
Eastern Time to discuss its 2014 second-quarter results. The call will be open
to the public and can be accessed by dialing +1-888-713-4215 (callers inside the
U.S.) or +1-617-213-4867 (callers outside the U.S.). The number should be dialed
at least ten minutes prior to the start of the call and the passcode will be
17712191. A simultaneous webcast of the call will be available to the public on
a listen-only basis through the Class A Shareholders section of the Company's
website (www.ozcap.com).
For those unable to listen to the live broadcast, a replay will be available by
dialing +1-888-286-8010 (callers inside the U.S.) or +1-617-801-6888 (callers
outside the U.S.), passcode 22964442, beginning approximately two hours after
the event for two weeks. A webcast replay of the event will also be available on
the Company's website as noted above.
Non-GAAP Financial Measures
Management evaluates Economic Income for the Och-Ziff Funds segment, the
Company's only reportable segment under GAAP, and for the Company's Other
Operations. Economic Income for the Company equals the sum of Economic Income
for the Och-Ziff Funds segment and the Company's Other Operations.
The Company conducts substantially all of its business through the Och-Ziff
Funds segment, which provides asset management services to its multi-strategy
funds, credit funds, CLOs, equity funds and other alternative investment
vehicles. The Company's Other Operations are primarily comprised of its real
estate business, which provides asset management services to its real estate
funds.
The Company's non-GAAP measures should not be considered as alternatives to the
Company's GAAP Net Income or cash flow from operations, or as indicative of
liquidity or the cash available to fund operations. The Company's non-GAAP
measures may not be comparable to similarly titled measures used by other
companies.
For reconciliations of the Company's non-GAAP measures to the most directly
comparable GAAP measures, please see Exhibits 2 through 5 that accompany this
press release.
Economic Income
In addition to analyzing the Company's results on a GAAP basis, management also
reviews the Company's results on an "Economic Income" basis. Economic Income
excludes the adjustments described below that are required for presentation of
the Company's results on a GAAP basis, but that management does not consider
when evaluating the operating performance of the Company in any given period.
Management uses Economic Income as the basis on which it evaluates the financial
performance of the Company and makes resource allocation and other operating
decisions. Management considers it important that investors review the same
operating information that it uses.
Economic Income is a measure of pre-tax operating performance that excludes the
following from the Company's results on a GAAP basis:
-- Income allocations to the Company's executive managing directors and the
Ziffs (until they exchanged their remaining interests during the 2014
second quarter) on their direct interests in the Och-Ziff Operating
Group. Management reviews operating performance at the Och-Ziff
Operating Group level, where substantially all of the Company's
operations are performed, prior to making any income allocations.
-- Reorganization expenses related to the Company's IPO, equity-based
compensation expenses and depreciation and amortization expenses, as
management does not consider these non-cash expenses to be reflective of
operating performance. However, the fair value of RSUs that are settled
in cash to employees or executive managing directors is included as an
expense at the time of settlement.
-- Changes in the tax receivable agreement liability and net gains (losses)
on investments in Och-Ziff funds, as management does not consider these
items to be reflective of operating performance.
-- Amounts related to the consolidated Och-Ziff funds, including the
related eliminations of management fees and incentive income, as
management reviews the total amount of management fees and incentive
income earned in relation to total assets under management and fund
performance. The Company also defers the recognition of incentive income
allocations from the consolidated Och-Ziff funds until all clawback
contingencies are resolved, consistent with the revenue recognition
policy for the funds the Company does not consolidate.
In addition, expenses related to compensation and profit-sharing arrangements
based on fund investment performance are recognized at the end of the relevant
performance measurement period, as management reviews the total compensation
expense related to these arrangements in relation to any incentive income earned
by the relevant fund.
As a result of the adjustments described above, as well as an adjustment to
present management fees net of recurring placement and related service fees
(rather than considering these fees an expense), management fees, incentive
income, compensation and benefits, non-compensation expenses and net income
allocated to noncontrolling interests as presented on an Economic Income basis
are also non-GAAP measures.
Distributable Earnings
Distributable Earnings is a non-GAAP measure of after-tax operating performance
and equals Economic Income less Adjusted Income Taxes. Adjusted Income Taxes are
estimated assuming the conversion of all outstanding Partner Units into Class A
Shares, on a one-to-one basis, and include the impact of payments under the tax
receivable agreement. Therefore, all income (loss) of the Och-Ziff Operating
Group allocated to the Partner Units is treated as if it were allocated to
Och-Ziff Capital Management Group LLC. Partner Units represent interests in the
Och-Ziff Operating Group held by the Company's executive managing directors and
the Ziffs (until they exchanged their remaining interests during the 2014 second
quarter), including the Group A Units and Group D Units. Distributable Earnings
per Share is equal to Distributable Earnings divided by the weighted-average
number of Adjusted Class A Shares.
Management believes Distributable Earnings provides useful information to
investors because it uses Distributable Earnings, among other financial
information, to determine the earnings available to distribute as dividends to
holders of the Company's Class A Shares and to the Company's executive managing
directors with respect to their Partner Units.
Forward-Looking Statements
This press release may contain forward-looking statements within the meaning of
Section 27A of the Securities Act of 1933, as amended, and Section 21E of the
Securities Exchange Act of 1934, as amended, that reflect the Company's current
views with respect to, among other things, future events and financial
performance. The Company generally identifies forward-looking statements by
terminology such as "outlook," "believe," "expect," "potential," "continue,"
"may," "will," "should," "could," "seek," "approximately," "predict," "intend,"
"plan," "estimate," "anticipate," "opportunity," "comfortable," "assume,"
"remain," "maintain," "sustain," "achieve," "see," "think," "position" or the
negative version of those words or other comparable words.
Any forward-looking statements contained herein are based upon historical
information and on our current plans, estimates and expectations. The inclusion
of this or other forward-looking information should not be regarded as a
representation by us or any other person that the future plans, estimates or
expectations contemplated by us will be achieved. We caution that
forward-looking statements are subject to numerous assumptions, estimates, risks
and uncertainties, including but not limited to the following: global economic,
business, market and geopolitical conditions, including Euro-zone sovereign debt
issues; U.S. and foreign regulatory developments relating to, among other
things, financial institutions and markets, government oversight, fiscal and tax
policy; conditions impacting the alternative asset management industry; our
ability to successfully compete for fund investors, assets, professional talent
and investment opportunities; our ability to retain our active executive
managing directors, managing directors and other investment professionals; our
successful formulation and execution of our business and growth strategies; our
ability to appropriately manage conflicts of interest and tax and other
regulatory factors relevant to our business; and assumptions relating to our
operations, investment performance, financial results, financial condition,
business prospects, growth strategy and liquidity.
If one or more of these or other risks or uncertainties materialize, or if our
assumptions or estimates prove to be incorrect, our actual results may vary
materially from those indicated in these statements. These factors are not and
should not be construed as exhaustive and should be read in conjunction with the
other cautionary statements and risks that are included in our filings with the
Securities and Exchange Commission ("SEC"), including but not limited to our
annual report on Form 10-K for the year ended December 31, 2013, filed on March
18, 2014, which we refer to as our "Annual Report." There may be additional
risks, uncertainties and factors that we do not currently view as material or
that are not known. The forward-looking statements contained in this press
release are made only as of the date of this press release. We do not undertake
to update any forward-looking statement because of new information, future
developments or otherwise.
This press release does not constitute an offer of any Och-Ziff fund.
About Och-Ziff Capital Management Group LLC
Och-Ziff Capital Management Group LLC is one of the largest institutional
alternative asset managers in the world with offices in New York, London, Hong
Kong, Mumbai, Beijing and Dubai. Och-Ziff provides asset management services to
institutional investors globally through its multi-strategy funds, credit funds,
CLOs, real estate funds, equity funds and other alternative investment vehicles.
Och-Ziff seeks to generate consistent, positive, absolute returns across market
cycles, with low volatility compared to the broader markets, and with an
emphasis on preservation of capital. Och-Ziff's funds invest across multiple
strategies and geographies, consistent with the investment objectives for each
fund. The global investment strategies Och-Ziff employs include convertible and
derivative arbitrage, corporate credit, long/short equity special situations,
merger arbitrage, private investments and structured credit. As of August 1,
2014, Och-Ziff had approximately $45.7 billion in assets under management. For
more information, please visit Och-Ziff's website (www.ozcap.com).
EXHIBIT 1
OCH-ZIFF CAPITAL MANAGEMENT GROUP LLC
Consolidated Statements of Comprehensive Income (Unaudited)
(dollars in thousands, except per share amounts)
----------------------------------------------------------------------------
Three Months Ended Six Months Ended
June 30, June 30,
------------------------- -------------------------
2014 2013 2014 2013
------------ ------------ ------------ ------------
Revenues
Management fees $ 164,031 $ 137,365 $ 322,801 $ 266,163
Incentive income 10,918 22,905 63,011 123,065
Other revenues 201 222 647 1,183
Income of consolidated
Och-Ziff funds 87,319 68,672 161,490 124,964
------------ ------------ ------------ ------------
Total Revenues 262,469 229,164 547,949 515,375
------------ ------------ ------------ ------------
Expenses
Compensation and
benefits 66,694 69,283 132,549 120,698
Reorganization
expenses 4,021 4,021 8,042 8,042
Interest expense 1,693 1,735 3,359 3,465
General,
administrative and
other 43,231 41,722 79,143 79,595
Expenses of
consolidated Och-Ziff
funds 38,456 23,511 77,133 38,837
------------ ------------ ------------ ------------
Total Expenses 154,095 140,272 300,226 250,637
------------ ------------ ------------ ------------
Other Income
Net gains on
investments in Och-
Ziff funds and joint
ventures 390 417 5,873 722
Net gains of
consolidated Och-Ziff
funds 65,768 35,763 120,267 143,013
------------ ------------ ------------ ------------
Total Other Income 66,158 36,180 126,140 143,735
------------ ------------ ------------ ------------
Income before Income
Taxes 174,532 125,072 373,863 408,473
Income taxes 21,328 13,103 54,919 38,398
------------ ------------ ------------ ------------
Consolidated Net Income $ 153,204 $ 111,969 $ 318,944 $ 370,075
============ ============ ============ ============
Allocation of
Consolidated Net Income
Class A Shareholders $ 10,716 $ 3,818 $ 34,568 $ 33,853
Noncontrolling
interests 128,596 107,721 260,661 333,513
Redeemable
noncontrolling
interests 13,892 430 23,715 2,709
------------ ------------ ------------ ------------
$ 153,204 $ 111,969 $ 318,944 $ 370,075
============ ============ ============ ============
Earnings Per Class A
Share
Basic $ 0.06 $ 0.03 $ 0.20 $ 0.22
============ ============ ============ ============
Diluted $ 0.05 $ 0.02 $ 0.20 $ 0.22
============ ============ ============ ============
Weighted-Average Class A
Shares Outstanding
Basic 172,733,171 152,016,631 172,329,212 151,335,477
============ ============ ============ ============
Diluted 479,894,909 155,900,015 176,821,370 153,756,866
============ ============ ============ ============
EXHIBIT 2
OCH-ZIFF CAPITAL MANAGEMENT GROUP LLC
Reconciliation of Non-GAAP Measures to the Respective GAAP Measures
(Unaudited)
(dollars in thousands, except per share amounts)
---------------------------------------------------------------------------
Three Months Ended June 30, 2014
------------------------------------
Och-Ziff
Funds Other Total
Segment Operations Company
---------- ---------- ------------
Net income (loss) allocated to Class A
Shareholders-GAAP $ 12,992 $ (2,276) $ 10,716
Net income allocated to the Och-Ziff
Operating Group A Units 48,981 - 48,981
Equity-based compensation 28,422 317 28,739
Income taxes 21,217 111 21,328
Incentive income allocations from
consolidated funds subject to
clawback (10,575) 769 (9,806)
Allocations to Och-Ziff Operating
Group D Units 4,317 - 4,317
Reorganization expenses 4,021 - 4,021
Adjustment for expenses related to
compensation arrangements based on
fund investment performance 2,192 1,671 3,863
Depreciation and amortization 1,617 186 1,803
Changes in tax receivable agreement
liability (4) - (4)
Other (371) (236) (607)
---------- ---------- ------------
Economic Income-Non-GAAP $ 112,809 $ 542 113,351
========== ==========
Adjusted Income Taxes-Non-GAAP(1) (22,905)
------------
Distributable Earnings-Non-GAAP $ 90,446
============
Weighted-Average Class A Shares
Outstanding 172,733,171
Weighted-Average Partner Units 320,719,223
Weighted-Average Class A Restricted
Share Units (RSUs) 15,187,951
------------
Weighted-Average Adjusted Class A
Shares 508,640,345
============
Distributable Earnings Per Adjusted
Class A Share-Non-GAAP $ 0.18
============
Three Months Ended June 30, 2013
------------------------------------
Och-Ziff
Funds Other Total
Segment Operations Company
---------- ---------- ------------
Net income (loss) allocated to Class A
Shareholders-GAAP $ 1,962 $ 1,856 $ 3,818
Net income allocated to the Och-Ziff
Operating Group A Units 29,693 - 29,693
Equity-based compensation 40,319 - 40,319
Income taxes 13,103 - 13,103
Incentive income allocations from
consolidated funds subject to
clawback 3,175 (1,447) 1,728
Allocations to Och-Ziff Operating
Group D Units 1,390 - 1,390
Reorganization expenses 4,021 - 4,021
Adjustment for expenses related to
compensation arrangements based on
fund investment performance 2,276 - 2,276
Depreciation and amortization 1,816 186 2,002
Changes in tax receivable agreement
liability (2) - (2)
Other (62) 226 164
---------- ---------- ------------
Economic Income-Non-GAAP $ 97,691 $ 821 98,512
========== ==========
Adjusted Income Taxes-Non-GAAP(1) (21,039)
------------
Distributable Earnings-Non-GAAP $ 77,473
============
Weighted-Average Class A Shares
Outstanding 152,016,631
Weighted-Average Partner Units 317,825,945
Weighted-Average Class A Restricted
Share Units (RSUs) 14,038,651
------------
Weighted-Average Adjusted Class A
Shares 483,881,227
============
Distributable Earnings Per Adjusted
Class A Share-Non-GAAP $ 0.16
============
(1) Presents an estimate of income tax expense by assuming the conversion of all
Partner Units into Class A Shares, on a one-to-one basis, as well as the impact
of payments under the tax receivable agreement. Therefore, all income (loss) of
the Och-Ziff Operating Group allocated to the Partner Units is treated as if it
were allocated to Och-Ziff Capital Management Group LLC.
EXHIBIT 3
OCH-ZIFF CAPITAL MANAGEMENT GROUP LLC
Reconciliation of Non-GAAP Measures to the Respective GAAP Measures
(Unaudited)
(dollars in thousands, except per share amounts)
---------------------------------------------------------------------------
Six Months Ended June 30, 2014
------------------------------------
Och-Ziff
Funds Other Total
Segment Operations Company
---------- ---------- ------------
Net income (loss) allocated to Class A
Shareholders-GAAP $ 37,437 $ (2,869) $ 34,568
Net income allocated to the Och-Ziff
Operating Group A Units 122,562 - 122,562
Equity-based compensation 55,552 317 55,869
Income taxes 54,808 111 54,919
Incentive income allocations from
consolidated funds subject to
clawback (18,219) 96 (18,123)
Allocations to Och-Ziff Operating
Group D Units 9,474 - 9,474
Adjustment for expenses related to
compensation arrangements based on
fund investment performance 3,293 4,936 8,229
Reorganization expenses 8,042 - 8,042
Changes in tax receivable agreement
liability (3,819) - (3,819)
Depreciation and amortization 3,260 371 3,631
Other (983) (178) (1,161)
---------- ---------- ------------
Economic Income-Non-GAAP $ 271,407 $ 2,784 274,191
========== ==========
Adjusted Income Taxes-Non-GAAP(1) (55,944)
------------
Distributable Earnings-Non-GAAP $ 218,247
============
Weighted-Average Class A Shares
Outstanding 172,329,212
Weighted-Average Partner Units 320,777,704
Weighted-Average Class A Restricted
Share Units (RSUs) 13,893,047
------------
Weighted-Average Adjusted Class A
Shares 506,999,963
============
Distributable Earnings Per Adjusted
Class A Share-Non-GAAP $ 0.43
============
Six Months Ended June 30, 2013
------------------------------------
Och-Ziff
Funds Other Total
Segment Operations Company
---------- ---------- ------------
Net income (loss) allocated to Class A
Shareholders-GAAP $ 22,310 $ 11,543 $ 33,853
Net income allocated to the Och-Ziff
Operating Group A Units 135,572 - 135,572
Equity-based compensation 63,037 - 63,037
Income taxes 38,398 - 38,398
Incentive income allocations from
consolidated funds subject to
clawback (9,118) (12,600) (21,718)
Allocations to Och-Ziff Operating
Group D Units 5,590 - 5,590
Adjustment for expenses related to
compensation arrangements based on
fund investment performance 3,279 - 3,279
Reorganization expenses 8,042 - 8,042
Changes in tax receivable agreement
liability 17 - 17
Depreciation and amortization 3,951 371 4,322
Other (152) 2,487 2,335
---------- ---------- ------------
Economic Income-Non-GAAP $ 270,926 $ 1,801 272,727
========== ==========
Adjusted Income Taxes-Non-GAAP(1) (58,334)
------------
Distributable Earnings-Non-GAAP $ 214,393
============
Weighted-Average Class A Shares
Outstanding 151,335,477
Weighted-Average Partner Units 315,484,494
Weighted-Average Class A Restricted
Share Units (RSUs) 12,414,468
------------
Weighted-Average Adjusted Class A
Shares 479,234,439
============
Distributable Earnings Per Adjusted
Class A Share-Non-GAAP $ 0.45
============
(1) Presents an estimate of income tax expense by assuming the conversion of all
Partner Units into Class A Shares, on a one-to-one basis, as well as the impact
of payments under the tax receivable agreement. Therefore, all income (loss) of
the Och-Ziff Operating Group allocated to the Partner Units is treated as if it
were allocated to Och-Ziff Capital Management Group LLC.
EXHIBIT 4
OCH-ZIFF CAPITAL MANAGEMENT GROUP LLC
Components of Economic Income and Reconciliation of These Non-GAAP Measures
to the Respective GAAP Measures (Unaudited)
(dollars in thousands)
---------------------------------------------------------------------------
Three Months Ended June 30, 2014
----------------------------------
Och-Ziff
Funds Other Total
Segment Operations Company
---------- ---------- ----------
Management fees-GAAP $ 161,463 $ 2,568 $ 164,031
Adjustment to management fees(1) (4,377) - (4,377)
---------- ---------- ----------
Management Fees-Economic Income Basis-
Non-GAAP 157,086 2,568 159,654
---------- ---------- ----------
Incentive income-GAAP 10,918 - 10,918
Adjustment to incentive income(2) 3,461 - 3,461
---------- ---------- ----------
Incentive Income-Economic Income Basis-
Non-GAAP 14,379 - 14,379
---------- ---------- ----------
Other revenues(3) 194 7 201
---------- ---------- ----------
Total Revenues-Economic Income Basis-
Non-GAAP $ 171,659 $ 2,575 $ 174,234
========== ========== ==========
Compensation and benefits-GAAP $ 63,640 $ 3,054 $ 66,694
Adjustment to compensation and
benefits(4) (34,929) (1,989) (36,918)
---------- ---------- ----------
Compensation and Benefits-Economic
Income Basis-Non-GAAP $ 28,711 $ 1,065 $ 29,776
========== ========== ==========
Interest expense and general,
administrative and other expenses-GAAP $ 43,770 $ 1,154 $ 44,924
Adjustment to interest expense and
general, administrative and other
expenses(5) (13,631) (186) (13,817)
---------- ---------- ----------
Non-Compensation Expenses-Economic
Income Basis-Non-GAAP $ 30,139 $ 968 $ 31,107
========== ========== ==========
Net gains on investments in Och-Ziff
funds and joint ventures-GAAP $ 390 $ - $ 390
Adjustment to net gains on investments
in Och-Ziff funds and joint ventures(6) (390) - (390)
---------- ---------- ----------
Net Gains on Joint Ventures-GAAP $ - $ - $ -
========== ========== ==========
Net income allocated to noncontrolling
interests-GAAP $ 95,303 $ 33,293 $ 128,596
Adjustment to net income allocated to
noncontrolling interests(7) (95,303) (33,293) (128,596)
---------- ---------- ----------
Net Income (Loss) Allocated to
Noncontrolling Interests-Economic
Income Basis-Non-GAAP $ - $ - $ -
========== ========== ==========
Three Months Ended June 30, 2013
----------------------------------
Och-Ziff
Funds Other Total
Segment Operations Company
---------- ---------- ----------
Management fees-GAAP $ 134,702 $ 2,663 $ 137,365
Adjustment to management fees(1) (2,504) - (2,504)
---------- ---------- ----------
Management Fees-Economic Income Basis-
Non-GAAP 132,198 2,663 134,861
---------- ---------- ----------
Incentive income-GAAP 22,905 - 22,905
Adjustment to incentive income(2) - - -
---------- ---------- ----------
Incentive Income-Economic Income Basis-
Non-GAAP 22,905 - 22,905
---------- ---------- ----------
Other revenues(3) 219 3 222
---------- ---------- ----------
Total Revenues-Economic Income Basis-
Non-GAAP $ 155,322 $ 2,666 $ 157,988
========== ========== ==========
Compensation and benefits-GAAP $ 68,199 $ 1,084 $ 69,283
Adjustment to compensation and
benefits(4) (43,986) - (43,986)
---------- ---------- ----------
Compensation and Benefits-Economic
Income Basis-Non-GAAP $ 24,213 $ 1,084 $ 25,297
========== ========== ==========
Interest expense and general,
administrative and other expenses-GAAP $ 42,872 $ 585 $ 43,457
Adjustment to interest expense and
general, administrative and other
expenses(5) (9,148) (185) (9,333)
---------- ---------- ----------
Non-Compensation Expenses-Economic
Income Basis-Non-GAAP $ 33,724 $ 400 $ 34,124
========== ========== ==========
Net gains on investments in Och-Ziff
funds and joint ventures-GAAP $ 417 $ - $ 417
Adjustment to net gains on investments
in Och-Ziff funds and joint ventures(6) (112) - (112)
---------- ---------- ----------
Net Gains on Joint Ventures-GAAP $ 305 $ - $ 305
========== ========== ==========
Net income allocated to noncontrolling
interests-GAAP $ 59,849 $ 47,872 $ 107,721
Adjustment to net income allocated to
noncontrolling interests(7) (59,850) (47,511) (107,361)
---------- ---------- ----------
Net Income (Loss) Allocated to
Noncontrolling Interests-Economic
Income Basis-Non-GAAP $ (1) $ 361 $ 360
========== ========== ==========
(1) Adjustment to present management fees net of recurring placement and related
service fees, as management considers these fees a reduction in management fees,
not an expense. The impact of eliminations related to the consolidated Och-Ziff
funds is also removed.
(2) Adjustment to exclude the impact of eliminations related to the consolidated
Och-Ziff funds.
(3) These items are presented on a GAAP basis, accordingly no adjustment to or
reconciliation of these items is presented.
(4) Adjustment to exclude equity-based compensation, as management does not
consider these non-cash expenses to be reflective of the operating performance
of the Company. However, the fair value of RSUs that are settled in cash to
employees or executive managing directors is included as an expense at the time
of settlement. Further, expenses related to compensation and profit-sharing
arrangements based on fund investment performance are recognized at the end of
the relevant performance measurement period, as management reviews the total
compensation expense related to these arrangements in relation to any incentive
income earned by the relevant fund. Distributions to the Och-Ziff Operating
Group D Units are also excluded, as management reviews operating performance at
the Och-Ziff Operating Group level, where substantially all of the Company's
operations are performed, prior to making any income allocations.
(5) Adjustment to exclude depreciation, amortization and changes in the tax
receivable agreement liability, as management does not consider these items to
be reflective of the operating performance of the Company. Additionally,
recurring placement and related service fees are excluded, as management
considers these fees a reduction in management fees, not an expense.
(6) Adjustment to exclude net gains (losses) on investments in Och-Ziff funds,
as management does not consider these gains (losses) to be reflective of the
operating performance of the Company.
(7) Adjustment to exclude amounts allocated to the executive managing directors
and the Ziffs (until they exchanged their remaining interests during the 2014
second quarter) on their interests in the Och-Ziff Operating Group, as
management reviews the operating performance of the Company at the Och-Ziff
Operating Group level. The Company conducts substantially all of its activities
through the Och-Ziff Operating Group. Additionally, the impact of the
consolidated Och-Ziff funds, including the allocation of earnings (losses) to
investors in those funds, is also removed.
EXHIBIT 5
OCH-ZIFF CAPITAL MANAGEMENT GROUP LLC
Components of Economic Income and Reconciliation of These Non-GAAP Measures
to the Respective GAAP Measures (Unaudited)
(dollars in thousands)
---------------------------------------------------------------------------
Six Months Ended June 30, 2014
----------------------------------
Och-Ziff
Funds Other Total
Segment Operations Company
---------- ---------- ----------
Management fees-GAAP $ 317,559 $ 5,242 $ 322,801
Adjustment to management fees(1) (8,587) - (8,587)
---------- ---------- ----------
Management Fees-Economic Income Basis-
Non-GAAP 308,972 5,242 314,214
---------- ---------- ----------
Incentive income-GAAP 63,011 - 63,011
Adjustment to incentive income(2) 10,376 - 10,376
---------- ---------- ----------
Incentive Income-Economic Income Basis-
Non-GAAP 73,387 - 73,387
---------- ---------- ----------
Other revenues(3) 633 14 647
---------- ---------- ----------
Total Revenues-Economic Income Basis-
Non-GAAP $ 382,992 $ 5,256 $ 388,248
========== ========== ==========
Compensation and benefits-GAAP $ 125,153 $ 7,396 $ 132,549
Adjustment to compensation and
benefits(4) (68,318) (5,254) (73,572)
---------- ---------- ----------
Compensation and Benefits-Economic
Income Basis-Non-GAAP $ 56,835 $ 2,142 $ 58,977
========== ========== ==========
Interest expense and general,
administrative and other expenses-GAAP $ 81,801 $ 701 $ 82,502
Adjustment to interest expense and
general, administrative and other
expenses(5) (22,176) (371) (22,547)
---------- ---------- ----------
Non-Compensation Expenses-Economic
Income Basis-Non-GAAP $ 59,625 $ 330 $ 59,955
========== ========== ==========
Net gains on investments in Och-Ziff
funds and joint ventures-GAAP $ 5,873 $ - $ 5,873
Adjustment to net gains on investments
in Och-Ziff funds and joint ventures(6) (999) - (999)
---------- ---------- ----------
Net Gains on Joint Ventures-GAAP $ 4,874 $ - $ 4,874
========== ========== ==========
Net income allocated to noncontrolling
interests-GAAP $ 191,532 $ 69,129 $ 260,661
Adjustment to net income allocated to
noncontrolling interests(7) (191,533) (69,129) (260,662)
---------- ---------- ----------
Net Income (Loss) Allocated to
Noncontrolling Interests-Economic
Income Basis-Non-GAAP $ (1) $ - $ (1)
========== ========== ==========
Six Months Ended June 30, 2013
----------------------------------
Och-Ziff
Funds Other Total
Segment Operations Company
---------- ---------- ----------
Management fees-GAAP $ 260,623 $ 5,540 $ 266,163
Adjustment to management fees(1) (4,910) - (4,910)
---------- ---------- ----------
Management Fees-Economic Income Basis-
Non-GAAP 255,713 5,540 261,253
---------- ---------- ----------
Incentive income-GAAP 123,065 - 123,065
Adjustment to incentive income(2) 1,114 - 1,114
---------- ---------- ----------
Incentive Income-Economic Income Basis-
Non-GAAP 124,179 - 124,179
---------- ---------- ----------
Other revenues(3) 1,176 7 1,183
---------- ---------- ----------
Total Revenues-Economic Income Basis-
Non-GAAP $ 381,068 $ 5,547 $ 386,615
========== ========== ==========
Compensation and benefits-GAAP $ 118,552 $ 2,146 $ 120,698
Adjustment to compensation and
benefits(4) (71,906) - (71,906)
---------- ---------- ----------
Compensation and Benefits-Economic
Income Basis-Non-GAAP $ 46,646 $ 2,146 $ 48,792
========== ========== ==========
Interest expense and general,
administrative and other expenses-GAAP $ 81,879 $ 1,181 $ 83,060
Adjustment to interest expense and
general, administrative and other
expenses(5) (17,835) (370) (18,205)
---------- ---------- ----------
Non-Compensation Expenses-Economic
Income Basis-Non-GAAP $ 64,044 $ 811 $ 64,855
========== ========== ==========
Net gains on investments in Och-Ziff
funds and joint ventures-GAAP $ 722 $ - $ 722
Adjustment to net gains on investments
in Och-Ziff funds and joint ventures(6) (182) - (182)
---------- ---------- ----------
Net Gains on Joint Ventures-GAAP $ 540 $ - $ 540
========== ========== ==========
Net income allocated to noncontrolling
interests-GAAP $ 209,529 $ 123,984 $ 333,513
Adjustment to net income allocated to
noncontrolling interests(7) (209,537) (123,195) (332,732)
---------- ---------- ----------
Net Income (Loss) Allocated to
Noncontrolling Interests-Economic
Income Basis-Non-GAAP $ (8) $ 789 $ 781
========== ========== ==========
(1) Adjustment to present management fees net of recurring placement and related
service fees, as management considers these fees a reduction in management fees,
not an expense. The impact of eliminations related to the consolidated Och-Ziff
funds is also removed.
(2) Adjustment to exclude the impact of eliminations related to the consolidated
Och-Ziff funds.
(3) These items are presented on a GAAP basis, accordingly no adjustment to or
reconciliation of these items is presented.
(4) Adjustment to exclude equity-based compensation, as management does not
consider these non-cash expenses to be reflective of the operating performance
of the Company. However, the fair value of RSUs that are settled in cash to
employees or executive managing directors is included as an expense at the time
of settlement. Further, expenses related to compensation and profit-sharing
arrangements based on fund investment performance are recognized at the end of
the relevant performance measurement period, as management reviews the total
compensation expense related to these arrangements in relation to any incentive
income earned by the relevant fund. Distributions to the Och-Ziff Operating
Group D Units are also excluded, as management reviews operating performance at
the Och-Ziff Operating Group level, where substantially all of the Company's
operations are performed, prior to making any income allocations.
(5) Adjustment to exclude depreciation, amortization and changes in the tax
receivable agreement liability, as management does not consider these items to
be reflective of the operating performance of the Company. Additionally,
recurring placement and related service fees are excluded, as management
considers these fees a reduction in management fees, not an expense.
(6) Adjustment to exclude net gains (losses) on investments in Och-Ziff funds,
as management does not consider these gains (losses) to be reflective of the
operating performance of the Company.
(7) Adjustment to exclude amounts allocated to the executive managing directors
and the Ziffs (until they exchanged their remaining interests during the 2014
second quarter) on their interests in the Och-Ziff Operating Group, as
management reviews the operating performance of the Company at the Och-Ziff
Operating Group level. The Company conducts substantially all of its activities
through the Och-Ziff Operating Group. Additionally, the impact of the
consolidated Och-Ziff funds, including the allocation of earnings (losses) to
investors in those funds, is also removed.
EXHIBIT 6
OCH-ZIFF CAPITAL MANAGEMENT GROUP LLC
Financial Supplement (Unaudited)
(dollars in millions)
---------------------------------------------------------------------------
Year Ended December 31,
----------------------------
Three Six
Months Months
Ended Ended
June 30, June 30,
2014 2014 2013 2012 2011
-------- -------- -------- -------- --------
Total Assets Under
Management(1)
Beginning of period
balance $ 42,626 $ 40,239 $ 32,604 $ 28,766 $ 27,935
Net flows 2,585 4,795 3,104 480 1,116
Appreciation
(depreciation)(2) 673 850 4,531 3,358 (285)
-------- -------- -------- -------- --------
End of Period Balance $ 45,884 $ 45,884 $ 40,239 $ 32,604 $ 28,766
======== ======== ======== ======== ========
Assets Under Management by
Fund(1)
OZ Master Fund $ 27,137 $ 25,211 $ 21,780 $ 20,198
OZ Asia Master Fund 1,378 1,342 1,394 1,620
OZ Europe Master Fund 1,303 1,437 1,961 2,272
Net Returns(3)
OZ Master Fund 1.7% 2.2% 13.9% 11.6% -0.5%
OZ Asia Master Fund 0.0% -6.7% 13.5% 7.0% -3.8%
OZ Europe Master Fund -1.9% -1.9% 12.4% 8.6% -4.9%
Past performance is no indication or guarantee of future results.
(1) Includes amounts invested by the Company, its executive managing directors,
employees and certain other related parties for which the Company charged no
management fees and received no incentive income for the periods presented.
Amounts presented in this table are not the amounts used to calculate management
fees and incentive income for the respective periods.
(2) Appreciation (depreciation) reflects the aggregate net capital appreciation
(depreciation) for the entire period and is presented on a total return basis,
net of all fees and expenses (except incentive income on unrealized gains
attributable to investments that the Company, as investment manager, determines
lack a readily ascertainable fair value, are illiquid or otherwise should be
held until the resolution of a special event or circumstance ("Special
Investments") that could reduce returns on these investments at the time of
realization), and includes the reinvestment of all dividends and other income.
Management fees and incentive income vary by product.
(3) Net return represents a composite of the average return of the feeder funds
that comprise each of the master funds presented. Net return is presented on a
total return basis, net of all fees and expenses (except incentive income on
Special Investments that could reduce returns on these investments at the time
of realization), and includes the reinvestment of all dividends and other
income. Performance includes realized and unrealized gains and losses
attributable to Special Investments and initial public offering investments that
are not allocated to all investors in the feeder funds. Investors that were not
allocated Special Investments and/or initial public offering investments may
experience materially different returns.
EXHIBIT 7
OCH-ZIFF CAPITAL MANAGEMENT GROUP LLC
Fund Performance of Certain Och-Ziff Funds (Unaudited)
----------------------------------------------------------------------------
2014
--------------------------------------------------------------
1H -
January February March 1Q April May June 2Q 2014
------ ------- ------ ------ ------ ------ ----- ------ ------
Net
Returns(1)
OZ Master
Fund -0.16% 2.51% -1.87% 0.43% -1.23% 1.53% 1.43% 1.72% 2.15%
OZ Asia
Master
Fund -3.20% 0.51% -4.09% -6.69% -2.16% -0.16% 2.40% 0.03% -6.66%
OZ Europe
Master
Fund -0.03% 1.29% -1.28% -0.04% -1.24% -1.00% 0.35% -1.89% -1.92%
S&P 500
Index(2) -3.46% 4.57% 0.84% 1.81% 0.74% 2.35% 2.07% 5.23% 7.13%
MSCI World
Index(2) -3.22% 4.26% 0.24% 1.15% 0.78% 2.34% 1.42% 4.61% 5.82%
2013
------------------------------------------------
January February March April May June
------- -------- ----- ------ ------ ------
Net Returns(1)
OZ Master Fund 2.37% 0.41% 1.18% 1.78% 1.28% -0.69%
OZ Asia Master Fund 3.64% 0.31% 1.56% 4.68% -0.93% -0.90%
OZ Europe Master Fund 3.41% 0.29% 0.14% -0.45% 1.51% -0.01%
S&P 500 Index(2) 5.18% 1.36% 3.75% 1.93% 2.34% -1.33%
MSCI World Index(2) 5.40% 1.53% 2.73% 2.86% 1.53% -2.38%
2013
-------------------------------------------------------
July August September October November December FY2013
----- ------ --------- ------- -------- -------- ------
Net Returns(1)
OZ Master Fund 1.07% 0.07% 1.91% 1.15% 1.04% 1.53% 13.87%
OZ Asia Master
Fund -0.51% 0.31% 1.54% 0.10% 1.59% 1.51% 13.51%
OZ Europe Master
Fund 1.67% -0.45% 1.53% 2.05% 1.49% 0.60% 12.36%
S&P 500 Index(2) 5.09% -2.90% 3.14% 4.60% 3.05% 2.53% 32.39%
MSCI World
Index(2) 4.76% -2.02% 3.77% 3.98% 2.22% 2.13% 29.57%
Past performance is no indication or guarantee of future results.
(1) Net return represents a composite of the average return of the feeder funds
that comprise each of the master funds presented. Net return is presented on a
total return basis, net of all fees and expenses (except incentive income on
unrealized gains attributable to investments that the Company, as investment
manager, determines lack a readily ascertainable fair value, are illiquid or
otherwise should be held until the resolution of a special event or circumstance
("Special Investments") that could reduce returns on these investments at the
time of realization), and includes the reinvestment of all dividends and other
income. Performance includes realized and unrealized gains and losses
attributable to Special Investments and initial public offering investments that
are not allocated to all investors in the feeder funds. Investors that were not
allocated Special Investments and/or initial public offering investments may
experience materially different returns.
(2) This comparison shows the returns of the S&P 500 Index (SPTR) and the MSCI
World Index (GDDLWI) ("Broader Market Indices") against certain Och-Ziff funds
(the "funds"). This comparison is intended solely for illustrative purposes to
show a historical comparison of the funds to the broader equity markets, as
represented by the Broader Market Indices, and should not be considered as an
indication of how the funds will perform relative to the Broader Market Indices
in the future. The Broader Market Indices are not performance benchmarks of the
funds. The funds are not managed to correlate in any way with the returns or
composition of the Broader Market Indices, which are unmanaged. It is not
possible to invest in an unmanaged index. You should not assume that there is
any material overlap between the securities in the funds and those that comprise
the Broader Market Indices. The S&P 500 Index is an equity index whose value is
calculated as the free-float weighted average of the share prices of the 500
large-cap companies listed on the NYSE and NASDAQ. The MSCI World Index is a
free-float adjusted market capitalization weighted index that is designed to
measure the equity market performance of developed markets. Returns of the
Broader Market Indices have not been reduced by fees and expenses associated
with investing in securities and include the reinvestment of dividends.
EXHIBIT 8
OCH-ZIFF CAPITAL MANAGEMENT GROUP LLC
Financial Supplement (Unaudited)
As of July 1, 2014
---------------------------------------------------------------------------
OZ Master Fund by Investment
Strategy Investors by Type(1)
Long/Short Equity Special
Situations 64% Pensions 32%
Structured Credit 15% Private Banks 17%
Corporate, Institutional and
Corporate Credit 8% Other 15%
Convertible and Derivative
Arbitrage 7% Fund-of-Funds 14%
Merger Arbitrage 5% Foundations and Endowments 10%
Private Investments 1% Family Offices and Individuals 6%
Cash 0% Related Parties 6%
Assets Under Management by
Geography(2) Investors by Geography(1)
North America 69% North America 72%
Europe 19% Europe 16%
Asia 12% Asia and Other 12%
(1) Presents the composition of the Company's fund investor base across its
funds excluding investors in its CLOs.
(2) The North American exposure includes the United States, Canada, Central
America and South America. The European exposure includes Africa and the Middle
East. The Asian exposure includes Australia and New Zealand.
FOR FURTHER INFORMATION PLEASE CONTACT:
Investor Relations Contact:
Tina Madon
Managing Director
Head of Investor Relations
Och-Ziff Capital Management Group LLC
+1-212-719-7381
tina.madon@ozcap.com
Media Relations Contact:
George Sard or Jonathan Gasthalter
Sard Verbinnen & Co
+1-212-687-8080
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