Public vs. Private Businesses

Daniel Och owns or has a right to receive 67% of Och-Ziff Capital Management’s Class A shares—according to a filing this month. He retained a large chunk of shares when the company went public in November 2007 and accumulated more over the years.

While it is usual for the founder and chief officer of a hedge fund business to own the management firm, it is not usual for one person to control such a large piece of a public company.

The 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, investors sometimes demand that a manager keep much of his wealth in the funds he manages.

But Mr. Och owning shares of the public company did not help the shareholders who bought in 2007, when the stock went as high as $30. It recently traded around $11, an increase from last year. Who knows, one day it might even get back to the 2007 level.

Institutional investors like the hedge funds the company manages. But as far as the public shares go, Och-Ziff has a long way to go.


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