Och-Ziff Clients vs. Shareholders

Chidem Kurdas

The difference is dramatic. Investors in Och-Ziff funds have done alright while  shareholders of the public company have lost a bundle. Does this mean one should not buy the shares of publicly traded hedge fund managers?

Two comments on that. One, Och-Ziff  insiders seem to think the future looks bright, given that they are buying shares. Two, prospects are probably better for Och-Ziff shareholders than for Facebook shareholders, though the latter might get something from those class action suits various law firms are announcing.

That said, in the past 12 months Och-Ziff Capital Management went down around 50%.  On the positive side, founder Daniel Och has been acquiring stock for years and recently indicated he expects to get another $20 million worth.  Other Och-Ziff executive are also buying. Presumably they believe the stock is undervalued.

This month JP Morgan put out a report on Och-Ziff, saying fund performance is solid compared to hedge fund peers and the fact that the master fund is fully invested shows confidence in finding good long and short trades.

That suggests it is not a bad idea to invest in the funds. But the case for the public shares is less clear.

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One Response to “Och-Ziff Clients vs. Shareholders”

  1. Public vs. Private Businesses | HedgeFundSmarts Says:

    […] big holding can be taken as evidence of Mr. Och’s confidence in the future of the business. He eats his own cooking, as private fund investors say approvingly. Indeed, […]

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