Why Och-Ziff Clients Disregard Lawsuits

Chidem Kurdas

This is a dramatic example of how the interests of financial company stakeholders can

Och Beset by Foreign Corruption Lawsuits

Chidem Kurdas

Class action lawyers are circling NYSE-listed Och-Ziff Capital Management Group like a posse of Indian braves whooping around a wagon.

Och-Ziff Clients vs. Shareholders

Chidem Kurdas

The difference is dramatic. Investors in Och-Ziff funds

Market Beats Hedge Fund; Now What?

Chidem Kurdas

Last year hedge funds on the whole did not perform well. Nevertheless, investors appear to

Some Can Borrow, but with Covenants

Chidem Kurdas

Credit is still tight and it’s almost impossible for many fund managers to get loans—just like small businesses in general. But there are exceptions, notably

Och-Ziff vs. the Index

Investors on occasion express doubt as to whether hedge funds are worth the trouble. So let’s compare the performance of  Daniel Och, a well-established and highly regarded manager, with a broad-gauge investable index.

The largest fund Mr. Och manages, the Och-Ziff Master Fund with around $19 billion in assets as of November, made 8.44% in 2010. The MSCI All Country World Investable Market Index made 11.4%—almost three percentage points more than OZ Master Fund. Should institutions just put their capital into an index? 

Advertisement

Are Och-Ziff Returns Almost Absolute?

Chidem Kurdas

Investors complain that hedge funds promise positive performance in all types of markets and then lose money. What happened to the supposed absolute returns, they ask.  For their part, hedge fund people point out how much smaller their losses are relative to, say, the S&P 500 Index.

Och-Ziff Capital offered an interesting comparison at this week’s earnings conference call.  Daniel Och suggested that his fund’s performance over 16 years demonstrates the ability to generate absolute returns and alpha.

Strictly speaking, the OZ Master Fund did not escape losses during bad years. But the losses were sufficiently limited to justify Mr. Och’s claim of preserving capital in down markets.

Daniel Och’s Compensation

Chidem Kurdas

The chief executive of Och-Ziff Capital, Daniel Och, received $9.4 million in company stock and did not get any non-equity incentive compensation in 2009. All other pay he received was minor, as best I can tell. He took Och-Ziff public in 2007.

The number for 2009 sounds very modest compared to past estimates of how much Mr. Och made.