QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the Quarterly Period Ended September 30, 2017 |
Delaware | 26-0354783 | |
(State of Incorporation) | (I.R.S. Employer Identification Number) |
Large accelerated filer | þ | Accelerated filer | ¨ | |||
Non-accelerated filer | ¨ (Do not check if a smaller reporting company) | Smaller reporting company | ¨ | |||
Emerging growth company | ¨ | |||||
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. | ¨ |
Page | ||
PART I — FINANCIAL INFORMATION | ||
Item 1. | ||
Item 2. | ||
Item 3. | ||
Item 4. | ||
PART II — OTHER INFORMATION | ||
Item 1. | ||
Item 1A. | ||
Item 2. | ||
Item 3. | ||
Item 4. | ||
Item 5. | ||
Item 6. | ||
2007 Offerings | Refers collectively to our IPO and the concurrent private offering of approximately 38.1 million Class A Shares to DIC Sahir Limited, a wholly owned indirect subsidiary of Dubai Holdings LLC | |
active executive managing directors | Executive managing directors who remain active in our business | |
Annual Report | Our annual report on Form 10-K for the year ended December 31, 2016, dated March 1, 2017 and filed with the SEC | |
Class A Shares | Our Class A Shares, representing Class A limited liability company interests of Och-Ziff Capital Management Group LLC, which are publicly traded and listed on the NYSE | |
Class B Shares | Class B Shares of Och-Ziff Capital Management Group LLC, which are not publicly traded, are currently held solely by our executive managing directors and have no economic rights but entitle the holders thereof to one vote per share together with the holders of our Class A Shares | |
CLOs | Collateralized loan obligations | |
Exchange Act | Securities Exchange Act of 1934, as amended | |
executive managing directors | The current limited partners of the Oz Operating Group entities other than our intermediate holding companies, including our founder, Daniel S. Och, and, except where the context requires otherwise, include certain limited partners who are no longer active in the business of the Company | |
funds | The multi-strategy, opportunistic credit, real estate and equity funds, Institutional Credit Strategies products and other alternative investment vehicles for which we provide asset management services | |
GAAP | U.S. generally accepted accounting principles | |
Group A Units | Refers collectively to one Class A operating group unit in each of the Oz Operating Partnerships. Group A Units are equity interests held by our executive managing directors | |
Group B Units | Refers collectively to one Class B operating group unit in each of the Oz Operating Partnerships. Group B Units are equity interests held by our intermediate holding companies | |
Group D Units | Refers collectively to one Class D operating group unit in each of the Oz Operating Partnerships. Group D Units are non-equity, limited partner profits interests held by our executive managing directors | |
Group P Units | Refers collectively to one Class P operating group unit in each of the Oz Operating Partnerships. Group P Units are equity interests held by our executive managing directors | |
Institutional Credit Strategies | Our asset management platform that invests in performing credits, including leveraged loans, high-yield bonds, private credit/bespoke financing and investment grade credit via CLOs and other customized solutions | |
intermediate holding companies | Refers collectively to Oz Corp and Oz Holding, both of which are wholly owned subsidiaries of Och-Ziff Capital Management Group LLC | |
IPO | Our initial public offering of 36.0 million Class A Shares that occurred in November 2007 | |
NYSE | New York Stock Exchange | |
the Company, the firm, we, us, our | Refers, unless the context requires otherwise, to Och-Ziff Capital Management Group LLC, a Delaware limited liability company, and its consolidated subsidiaries, including the Oz Operating Group | |
Oz Corp | Och-Ziff Holding Corporation, a Delaware corporation | |
Oz Holding | Och-Ziff Holding LLC, a Delaware limited liability company | |
Oz Operating Group | Refers collectively to the Oz Operating Partnerships and their consolidated subsidiaries | |
Oz Operating Partnerships | Refers collectively to OZ Management LP, OZ Advisors LP and OZ Advisors II LP | |
Partner Equity Units | Refers collectively to the Group A Units and Group P Units. | |
Preferred Units | One Class A cumulative preferred unit in each of the Oz Operating Group entities collectively represents one “Preferred Unit.” Certain of our executive managing directors collectively own 100% of the Preferred Units | |
Registrant | Och-Ziff Capital Management Group LLC, a Delaware limited liability company | |
SEC | U.S. Securities and Exchange Commission | |
Securities Act | Securities Act of 1933, as amended | |
Special Investments | Investments that we, as investment manager, believe lack a readily ascertainable market value, are illiquid or should be held until the resolution of a special event or circumstance | |
Ziffs | Refers collectively to Ziff Investors Partnership, L.P. II and certain of its affiliates and control persons |
September 30, 2017 | December 31, 2016 | ||||||
(dollars in thousands) | |||||||
Assets | |||||||
Cash and cash equivalents | $ | 317,917 | $ | 329,813 | |||
Investments (includes assets measured at fair value of $289,525 and $21,341 as of September 30, 2017 and December 31, 2016, respectively) | 304,648 | 37,980 | |||||
Income and fees receivable | 77,847 | 176,638 | |||||
Due from related parties | 22,802 | 20,494 | |||||
Deferred income tax assets | 683,152 | 695,441 | |||||
Other assets, net | 83,517 | 169,984 | |||||
Assets of consolidated funds: | |||||||
Investments of consolidated funds, at fair value | 41,074 | 37,661 | |||||
Other assets of consolidated funds | 12,416 | 17,544 | |||||
Total Assets | $ | 1,543,373 | $ | 1,485,555 | |||
Liabilities and Shareholders’ (Deficit) Equity | |||||||
Liabilities | |||||||
Compensation payable | $ | 53,143 | $ | 206,106 | |||
Due to related parties | 521,948 | 522,101 | |||||
Debt obligations | 541,016 | 577,128 | |||||
Other liabilities (includes liabilities measured at fair value of $0 and $8,204 as of September 30, 2017 and December 31, 2016, respectively) | 180,443 | 174,994 | |||||
Liabilities of consolidated funds: | |||||||
Other liabilities of consolidated funds | 8,965 | 15,197 | |||||
Total Liabilities | 1,305,515 | 1,495,526 | |||||
Commitments and Contingencies (Note 15) | |||||||
Redeemable Noncontrolling Interests (Note 3) | 445,142 | 284,121 | |||||
Shareholders’ (Deficit) Equity | |||||||
Class A Shares, no par value, 1,000,000,000 shares authorized, 185,312,439 and 184,843,255 shares issued and outstanding as of September 30, 2017 and December 31, 2016, respectively | — | — | |||||
Class B Shares, no par value, 750,000,000 shares authorized, 339,339,478 and 297,317,019 shares issued and outstanding as of September 30, 2017 and December 31, 2016, respectively | — | — | |||||
Paid-in capital | 3,087,247 | 3,097,431 | |||||
Accumulated deficit | (3,558,633 | ) | (3,563,452 | ) | |||
Shareholders’ deficit attributable to Class A Shareholders | (471,386 | ) | (466,021 | ) | |||
Shareholders’ equity attributable to noncontrolling interests | 264,102 | 171,929 | |||||
Total Shareholders’ (Deficit) Equity | (207,284 | ) | (294,092 | ) | |||
Total Liabilities, Redeemable Noncontrolling Interests and Shareholders’ (Deficit) Equity | $ | 1,543,373 | $ | 1,485,555 |
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||
2017 | 2016 | 2017 | 2016 | ||||||||||||
(dollars in thousands) | |||||||||||||||
Revenues | |||||||||||||||
Management fees | $ | 77,171 | $ | 128,513 | $ | 243,508 | $ | 428,822 | |||||||
Incentive income | 51,249 | 18,754 | 168,990 | 57,477 | |||||||||||
Other revenues | 1,524 | 380 | 4,081 | 1,544 | |||||||||||
Income of consolidated funds | 2,055 | 458 | 3,518 | 1,262 | |||||||||||
Total Revenues | 131,999 | 148,105 | 420,097 | 489,105 | |||||||||||
Expenses | |||||||||||||||
Compensation and benefits | 74,490 | 57,758 | 214,112 | 169,762 | |||||||||||
Interest expense | 5,611 | 6,129 | 17,043 | 17,452 | |||||||||||
General, administrative and other | 33,136 | 56,125 | 114,229 | 596,321 | |||||||||||
Expenses of consolidated funds | 8,824 | 17 | 9,368 | 316 | |||||||||||
Total Expenses | 122,061 | 120,029 | 354,752 | 783,851 | |||||||||||
Other Income | |||||||||||||||
Changes in tax receivable agreement liability | — | 11,819 | — | 11,990 | |||||||||||
Net gains on investments in funds and joint ventures | 264 | 803 | 1,050 | 1,302 | |||||||||||
Net gains of consolidated funds | 7,658 | 821 | 8,278 | 2,182 | |||||||||||
Total Other Income | 7,922 | 13,443 | 9,328 | 15,474 | |||||||||||
Income (Loss) Before Income Taxes | 17,860 | 41,519 | 74,673 | (279,272 | ) | ||||||||||
Income taxes | 1,942 | 9,986 | 17,242 | 39,436 | |||||||||||
Consolidated and Comprehensive Net Income (Loss) | 15,918 | 31,533 | 57,431 | (318,708 | ) | ||||||||||
Less: (Income) loss attributable to noncontrolling interests | (9,760 | ) | (16,570 | ) | (41,680 | ) | 186,867 | ||||||||
Less: Income attributable to redeemable noncontrolling interests | (432 | ) | (678 | ) | (1,238 | ) | (1,801 | ) | |||||||
Net Income (Loss) Attributable to Och-Ziff Capital Management Group LLC | 5,726 | 14,285 | 14,513 | (133,642 | ) | ||||||||||
Less: Change in redemption value of Preferred Units | — | — | (2,853 | ) | — | ||||||||||
Net Income (Loss) Attributable to Class A Shareholders | $ | 5,726 | $ | 14,285 | $ | 11,660 | $ | (133,642 | ) | ||||||
Earnings (Loss) per Class A Share | |||||||||||||||
Income (Loss) per Class A Share - basic | $ | 0.03 | $ | 0.08 | $ | 0.06 | $ | (0.73 | ) | ||||||
Income (Loss) per Class A Share - diluted | $ | 0.03 | $ | 0.05 | $ | 0.06 | $ | (0.75 | ) | ||||||
Weighted-average Class A Shares outstanding - basic | 186,235,651 | 182,521,225 | 186,201,389 | 182,508,296 | |||||||||||
Weighted-average Class A Shares outstanding - diluted | 186,235,651 | 479,838,244 | 186,201,389 | 479,825,416 | |||||||||||
Dividends Paid per Class A Share | $ | 0.02 | $ | — | $ | 0.05 | $ | — |
Och-Ziff Capital Management Group LLC | |||||||||||||||||||||||||
Number of Class A Shares | Number of Class B Shares | Paid-in Capital | Accumulated Deficit | Shareholders' Deficit Attributable to Class A Shareholders | Shareholders' Equity Attributable to Noncontrolling Interests | Total Shareholders’ Equity (Deficit) | |||||||||||||||||||
(dollars in thousands) | |||||||||||||||||||||||||
As of December 31, 2016 | 184,843,255 | 297,317,019 | $ | 3,097,431 | $ | (3,563,452 | ) | $ | (466,021 | ) | $ | 171,929 | $ | (294,092 | ) | ||||||||||
Capital contributions | — | — | — | — | — | 783 | 783 | ||||||||||||||||||
Capital distributions | — | — | — | — | — | (16,317 | ) | (16,317 | ) | ||||||||||||||||
Cash dividends declared on Class A Shares | — | — | — | (9,256 | ) | (9,256 | ) | — | (9,256 | ) | |||||||||||||||
Equity-based compensation, net of taxes | 469,184 | 172,459 | 25,716 | — | 25,716 | 37,135 | 62,851 | ||||||||||||||||||
Dividend equivalents on Class A restricted share units | — | — | 438 | (438 | ) | — | — | — | |||||||||||||||||
Relinquishment of Group A Units (Note 3) | — | (30,000,000 | ) | — | — | — | — | — | |||||||||||||||||
Class B Shares granted to holders of Group P Units (Note 3) | — | 71,850,000 | — | — | — | — | — | ||||||||||||||||||
Impact of changes in Oz Operating Group ownership (Note 3) | — | — | (12,266 | ) | — | (12,266 | ) | 12,266 | — | ||||||||||||||||
Dilution of proceeds from tax receivable agreement waiver (Note 3) | — | — | (21,219 | ) | — | (21,219 | ) | 21,219 | — | ||||||||||||||||
Change in redemption value of Preferred Units | — | — | (2,853 | ) | — | (2,853 | ) | (4,593 | ) | (7,446 | ) | ||||||||||||||
Comprehensive net income, excluding amounts attributable to redeemable noncontrolling interests | — | — | — | 14,513 | 14,513 | 41,680 | 56,193 | ||||||||||||||||||
As of September 30, 2017 | 185,312,439 | 339,339,478 | $ | 3,087,247 | $ | (3,558,633 | ) | $ | (471,386 | ) | $ | 264,102 | $ | (207,284 | ) |
Nine Months Ended September 30, | |||||||
2017 | 2016 | ||||||
(dollars in thousands) | |||||||
Cash Flows from Operating Activities | |||||||
Consolidated net income (loss) | $ | 57,431 | $ | (318,708 | ) | ||
Adjustments to reconcile consolidated net income to net cash provided by operating activities: | |||||||
Amortization of equity-based compensation | 63,696 | 56,311 | |||||
Depreciation, amortization and net gains and losses on fixed assets | 7,693 | 14,947 | |||||
Deferred income taxes | 12,395 | 31,038 | |||||
Net gains on investments in funds and joint ventures | (1,050 | ) | (1,302 | ) | |||
Operating cash flows due to changes in: | |||||||
Income and fees receivable | 98,791 | 77,760 | |||||
Due from related parties | (2,308 | ) | (9,888 | ) | |||
Other assets, net | 27,175 | 9,762 | |||||
Due to related parties | (153 | ) | (12,133 | ) | |||
Compensation payable | (152,838 | ) | (153,875 | ) | |||
Other liabilities | 5,286 | 398,686 | |||||
Consolidated funds related items: | |||||||
Net gains of consolidated funds | (8,278 | ) | (2,182 | ) | |||
Purchases of investments | (383,184 | ) | (185,940 | ) | |||
Proceeds from sale of investments | 146,907 | 175,131 | |||||
Other assets of consolidated funds | (306,453 | ) | 9,078 | ||||
Other liabilities of consolidated funds | 78,044 | 558 | |||||
Net Cash (Used in) Provided by Operating Activities | (356,846 | ) | 89,243 | ||||
Cash Flows from Investing Activities | |||||||
Purchases of fixed assets | (3,857 | ) | (7,559 | ) | |||
Proceeds from sale of fixed assets (Note 7) | 57,599 | — | |||||
Purchases of United States government obligations | (112,400 | ) | (29,915 | ) | |||
Maturities of United States government obligations | — | 18,500 | |||||
Investments in funds | (132,102 | ) | (12,734 | ) | |||
Return of investments in funds | 4,310 | 1,493 | |||||
Other, net | — | (17 | ) | ||||
Net Cash Used in Investing Activities | (186,450 | ) | (30,232 | ) | |||
Nine Months Ended September 30, | |||||||
2017 | 2016 | ||||||
(dollars in thousands) | |||||||
Cash Flows from Financing Activities | |||||||
Issuance and sale of Preferred Units, net of issuance costs | 150,054 | — | |||||
Contributions from noncontrolling and redeemable noncontrolling interests | 3,066 | 2,551 | |||||
Distributions to noncontrolling and redeemable noncontrolling interests | (16,317 | ) | (225 | ) | |||
Dividends on Class A Shares | (9,256 | ) | — | ||||
Proceeds from debt obligations | 127,864 | 120,000 | |||||
Repayment of debt obligations | (167,319 | ) | (2,738 | ) | |||
Proceeds from debt obligations of consolidated CLO | 666,712 | — | |||||
Repayment of debt obligations of consolidated CLO | (222,434 | ) | — | ||||
Withholding taxes paid on vested RSUs | (840 | ) | (2,340 | ) | |||
Other, net | (130 | ) | 141 | ||||
Net Cash Provided by Financing Activities | 531,400 | 117,389 | |||||
Net Change in Cash and Cash Equivalents | (11,896 | ) | 176,400 | ||||
Cash and Cash Equivalents, Beginning of Period | 329,813 | 254,070 | |||||
Cash and Cash Equivalents, End of Period | $ | 317,917 | $ | 430,470 | |||
Supplemental Disclosure of Cash Flow Information | |||||||
Cash paid during the period: | |||||||
Interest | $ | 11,199 | $ | 10,374 | |||
Income taxes | $ | 3,196 | $ | 10,563 | |||
Non-cash transactions: | |||||||
Assets related to the initial consolidation of CLO | $ | 100,156 | $ | — | |||
Liabilities related to the initial consolidation of CLO | $ | 99,878 | $ | — | |||
Assets related to the deconsolidation of CLO | $ | 653,629 | $ | — | |||
Liabilities related to the deconsolidation of CLO | $ | 629,282 | $ | — | |||
Increase in paid in capital as a result of waiver of payments under tax receivable agreement (Note 15) | $ | — | $ | 54,112 |
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||
2017 | 2016 | 2017 | 2016 | ||||||||||||
(dollars in thousands) | |||||||||||||||
Group A Units | $ | 9,500 | $ | 16,313 | $ | 41,145 | $ | (187,338 | ) | ||||||
Consolidated funds | — | — | — | 262 | |||||||||||
Other | 260 | 257 | 535 | 209 | |||||||||||
$ | 9,760 | $ | 16,570 | $ | 41,680 | $ | (186,867 | ) |
September 30, 2017 | December 31, 2016 | ||||||
(dollars in thousands) | |||||||
Group A Units | $ | 260,011 | $ | 166,521 | |||
Other | 4,091 | 5,408 | |||||
$ | 264,102 | $ | 171,929 |
Nine Months Ended September 30, 2017 | |||||||||||
Consolidated Funds | Preferred Units | Total | |||||||||
(dollars in thousands) | |||||||||||
Beginning balance | $ | 21,621 | $ | 262,500 | $ | 284,121 | |||||
Change in redemption value of Preferred Units | — | 7,446 | 7,446 | ||||||||
Preferred Units issuance, net of issuance costs | — | 150,054 | 150,054 | ||||||||
Capital contributions | 2,283 | — | 2,283 | ||||||||
Comprehensive income | 1,238 | — | 1,238 | ||||||||
Ending Balance | $ | 25,142 | $ | 420,000 | $ | 445,142 |
September 30, 2017 | December 31, 2016 | ||||||
(dollars in thousands) | |||||||
United States government obligations, at fair value(1) | $ | 112,722 | $ | — | |||
CLOs, at fair value | 176,803 | 21,341 | |||||
Other funds and joint ventures, equity method | 15,123 | 16,639 | |||||
Total Investments | $ | 304,648 | $ | 37,980 |
• | Level I – Fair value is determined using quoted prices that are available in active markets for identical assets or liabilities. The types of assets and liabilities that would generally be included in this category are certain listed equities, U.S. government obligations and certain listed derivatives. |
• | Level II – Fair value is determined using quotations received from dealers making a market for these assets or liabilities (“broker quotes”), valuations obtained from independent third-party pricing services, the use of models or other valuation methodologies based on pricing inputs that are either directly or indirectly market observable as of the measurement date. The types of assets and liabilities that would generally be included in this category are certain corporate bonds, certain credit default swap contracts, certain bank debt securities, certain commercial real estate debt, less liquid equity securities, forward contracts and certain over the-counter (“OTC”) derivatives. |
• | Level III – Fair value is determined using pricing inputs that are unobservable in the market and includes situations where there is little, if any, market activity for the asset or liability. The fair value of assets and liabilities in this category may require significant judgment or estimation in determining fair value of the assets or liabilities. The fair value of these assets and liabilities may be estimated using a combination of observed transaction prices, independent pricing services, relevant broker quotes, models or other valuation methodologies based on pricing inputs that are neither directly or indirectly market observable. The types of assets and liabilities that would generally be included in this category include real estate investments, equity and debt securities issued by private entities, limited partnerships, certain corporate bonds, certain credit default swap contracts, certain bank debt securities, certain commercial real estate debt, certain OTC derivatives, residential and commercial mortgage-backed securities, asset-backed securities, collateralized debt obligations and investments in affiliated credit funds. |
As of September 30, 2017 | |||||||||||||||
Level I | Level II | Level III | Total | ||||||||||||
(dollars in thousands) | |||||||||||||||
Assets, at Fair Value | |||||||||||||||
Included within investments: | |||||||||||||||
United States government obligations | $ | 112,722 | $ | — | $ | — | $ | 112,722 | |||||||
CLOs(1) | $ | — | $ | — | $ | 176,803 | $ | 176,803 | |||||||
Investments of consolidated funds: | |||||||||||||||
Bank debt | $ | — | $ | 17,737 | $ | 23,337 | $ | 41,074 |
As of December 31, 2016 | |||||||||||||||
Level I | Level II | Level III | Total | ||||||||||||
(dollars in thousands) | |||||||||||||||
Assets, at Fair Value | |||||||||||||||
Included within cash and cash equivalents: | |||||||||||||||
United States government obligations | $ | 139,974 | $ | — | $ | — | $ | 139,974 | |||||||
Included within investments: | |||||||||||||||
CLOs(1) | $ | — | $ | — | $ | 21,341 | $ | 21,341 | |||||||
Investments of consolidated funds: | |||||||||||||||
Bank debt | $ | — | $ | 19,534 | $ | 18,127 | $ | 37,661 | |||||||
Liabilities, at Fair Value | |||||||||||||||
Included within other liabilities: | |||||||||||||||
Obligation to deliver loans subject to forward sale agreement included within other liabilities | $ | — | $ | 8,204 | $ | — | $ | 8,204 |
June 30, 2017 | Transfers In | Transfers Out | Investment Purchases | Investment Sales / Settlements | Gains / Losses | September 30, 2017 | |||||||||||||||||||||
(dollars in thousands) | |||||||||||||||||||||||||||
Assets, at Fair Value | |||||||||||||||||||||||||||
Included within investments: | |||||||||||||||||||||||||||
CLOs | $ | 43,723 | $ | — | $ | — | $ | 132,685 | $ | — | $ | 395 | $ | 176,803 | |||||||||||||
Investments of consolidated funds: | |||||||||||||||||||||||||||
Bank debt | $ | 39,338 | $ | 8,840 | $ | (21,900 | ) | $ | 30,470 | $ | (33,975 | ) | $ | 564 | $ | 23,337 |
June 30, 2016 | Transfers In | Transfers Out | Investment Purchases | Investment Sales / Settlements | Gains / Losses | September 30, 2016 | |||||||||||||||||||||
(dollars in thousands) | |||||||||||||||||||||||||||
Assets, at Fair Value | |||||||||||||||||||||||||||
Investments of consolidated funds: | |||||||||||||||||||||||||||
Bank debt | $ | 8,868 | $ | — | $ | (925 | ) | $ | 19,317 | $ | (11,325 | ) | $ | 315 | $ | 16,250 |
December 31, 2016 | Transfers In | Transfers Out | Investment Purchases | Investment Sales / Settlements | Gains / Losses | September 30, 2017 | |||||||||||||||||||||
(dollars in thousands) | |||||||||||||||||||||||||||
Assets, at Fair Value | |||||||||||||||||||||||||||
Included within investments: | |||||||||||||||||||||||||||
CLOs | $ | 21,341 | $ | — | $ | — | $ | 152,885 | $ | — | $ | 2,577 | $ | 176,803 | |||||||||||||
Investments of consolidated funds: | |||||||||||||||||||||||||||
Bank debt | $ | 18,127 | $ | 767 | $ | (17,311 | ) | $ | 87,611 | $ | (67,082 | ) | $ | 1,225 | $ | 23,337 |
December 31, 2015 | Transfers In | Transfers Out | Investment Purchases | Investment Sales / Settlements | Gains / Losses | September 30, 2016 | |||||||||||||||||||||
(dollars in thousands) | |||||||||||||||||||||||||||
Assets, at Fair Value | |||||||||||||||||||||||||||
Investments of consolidated funds: | |||||||||||||||||||||||||||
Bank debt | $ | 1,998,423 | $ | — | $ | (466 | ) | $ | 66,545 | $ | (2,049,067 | ) | $ | 815 | $ | 16,250 | |||||||||||
Real estate investments | 719,957 | — | — | — | (719,957 | ) | — | — | |||||||||||||||||||
Residential mortgage-backed securities | 323,571 | — | — | — | (323,571 | ) | — | — | |||||||||||||||||||
Collateralized debt obligations | 83,759 | — | — | — | (83,759 | ) | — | — | |||||||||||||||||||
Energy and natural resources limited partnerships | 70,604 | — | — | — | (70,604 | ) | — | — | |||||||||||||||||||
Commercial real estate debt | 18,295 | — | — | — | (18,295 | ) | — | — | |||||||||||||||||||
Asset-backed securities | 23,739 | — | — | — | (23,739 | ) | — | — | |||||||||||||||||||
Commercial mortgage-backed securities | 13,803 | — | — | — | (13,803 | ) | — | — | |||||||||||||||||||
Other investments (including derivatives, net) | 1,938 | — | — | — | (1,938 | ) | — | — | |||||||||||||||||||
$ | 3,254,089 | $ | — | $ | (466 | ) | $ | 66,545 | $ | (3,304,733 | ) | $ | 815 | $ | 16,250 |
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||
2017 | 2016 | 2017 | 2016 | ||||||||||||
(dollars in thousands) | |||||||||||||||
Assets, at Fair Value | |||||||||||||||
Included within investments: | |||||||||||||||
CLOs | $ | 178 | $ | — | $ | 2,360 | $ | — | |||||||
Investments of consolidated funds: | |||||||||||||||
Bank debt | $ | 61 | $ | 242 | $ | 142 | $ | 322 |
September 30, 2017 | December 31, 2016 | ||||||
(dollars in thousands) | |||||||
Assets | |||||||
Assets of consolidated funds: | |||||||
Investments of consolidated funds, at fair value | $ | 41,074 | $ | 37,661 | |||
Other assets of consolidated funds | 12,416 | 17,544 | |||||
Total Assets | $ | 53,490 | $ | 55,205 | |||
Liabilities | |||||||
Liabilities of consolidated funds: | |||||||
Other liabilities of consolidated funds | 8,965 | 15,197 | |||||
Total Liabilities | $ | 8,965 | $ | 15,197 |
September 30, 2017 | December 31, 2016 | ||||||
(dollars in thousands) | |||||||
Net assets of unconsolidated VIEs in which the Company has a variable interest | $ | 7,177,884 | $ | 4,069,617 | |||
Maximum risk of loss as a result of the Company's involvement with VIEs: | |||||||
Unearned revenues | 123,194 | 96,409 | |||||
Income and fees receivable | 6,811 | 13,074 | |||||
Investments in funds | 187,819 | 35,868 | |||||
Maximum Exposure to Loss | $ | 317,824 | $ | 145,351 |
September 30, 2017 | December 31, 2016 | ||||||
(dollars in thousands) | |||||||
Fixed Assets: | |||||||
Leasehold improvements | $ | 53,419 | $ | 54,414 | |||
Computer hardware and software | 42,437 | 40,093 | |||||
Furniture, fixtures and equipment | 8,571 | 8,919 | |||||
Corporate aircraft held for sale | — | 56,251 | |||||
Accumulated depreciation and amortization | (56,056 | ) | (49,890 | ) | |||
Fixed assets, net | 48,371 | 109,787 | |||||
Goodwill | 22,691 | 22,691 | |||||
Prepaid expenses | 9,415 | 12,753 | |||||
Trades receivable for loans subject to forward sale agreement | — | 10,391 | |||||
Loans held for sale | — | 8,204 | |||||
Other | 3,040 | 6,158 | |||||
Total Other Assets, Net | $ | 83,517 | $ | 169,984 |
September 30, 2017 | December 31, 2016 | ||||||
(dollars in thousands) | |||||||
Unearned incentive income | $ | 122,833 | $ | 96,079 | |||
Accrued expenses | 28,232 | 30,728 | |||||
Deferred rent credit | 8,874 | 15,046 | |||||
Interest payable | 7,083 | 2,654 | |||||
Loan trades payable | — | 10,391 | |||||
Obligation to deliver loans subject to forward sale agreement, at fair value | — | 8,204 | |||||
Other | 13,421 | 11,892 | |||||
Total Other Liabilities | $ | 180,443 | $ | 174,994 |
• | Incurring certain additional indebtedness or issuing certain equity interest. |
• | Creating liens. |
• | Paying dividends or making certain other payments when there is a default or event of default under the Revolving Credit Facility. |
• | Merging, consolidating, selling or otherwise disposing of its assets. |
• | Engaging in certain transactions with shareholders or affiliates. |
• | Engaging in a substantially different line of business. |
• | Amending its organizational documents in a manner materially adverse to the lenders. |
Borrowing Date | Contractual Rate | Final Maturity Date | Carrying Value | |||||||||
September 2017 | December 2016 | |||||||||||
(dollars in thousands) | ||||||||||||
December 15, 2016 | EURIBOR plus 2.23% | December 15, 2023 | $ | 17,744 | $ | 15,801 | ||||||
June 7, 2017 | LIBOR plus 1.48% | November 16, 2029 | 17,037 | — | ||||||||
July 21, 2017 | LIBOR plus 1.43% | January 22, 2029 | 21,671 | — | ||||||||
August 2, 2017 | LIBOR plus 1.41% | January 21, 2030 | 21,633 | — | ||||||||
August 17, 2017 | LIBOR plus 1.43% | April 30, 2030 | 22,890 | — | ||||||||
September 14, 2017 | LIBOR plus 1.41% | April 22, 2030 | 25,410 | — | ||||||||
September 14, 2017 | EURIBOR plus 2.21% | September 14, 2024 | 19,206 | — | ||||||||
$ | 145,591 | $ | 15,801 |
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||
2017 | 2016 | 2017 | 2016 | ||||||||||||
(dollars in thousands) | |||||||||||||||
Professional services | $ | 9,414 | $ | 18,179 | $ | 31,170 | $ | 61,374 | |||||||
Occupancy and equipment | 7,391 | 9,412 | 25,868 | 27,903 | |||||||||||
Information processing and communications | 6,611 | 7,997 | 20,822 | 26,671 | |||||||||||
Recurring placement and related service fees | 4,829 | 8,808 | 15,490 | 31,362 | |||||||||||
Insurance | 1,843 | 3,999 | 5,727 | 12,030 | |||||||||||
Business development | 644 | 2,458 | 5,614 | 10,916 | |||||||||||
Other expenses | 2,404 | 7,456 | 9,538 | 13,964 | |||||||||||
33,136 | 58,309 | 114,229 | 184,220 | ||||||||||||
Settlements expense | — | (2,184 | ) | — | 412,101 | ||||||||||
Total General, Administrative and Other | $ | 33,136 | $ | 56,125 | $ | 114,229 | $ | 596,321 |
Three Months Ended September 30, 2017 | Net Income Attributable to Class A Shareholders | Weighted-Average Class A Shares Outstanding | Earnings Per Class A Share | Number of Antidilutive Units Excluded from Diluted Calculation | |||||||||
(dollars in thousands, except per share amounts) | |||||||||||||
Basic | $ | 5,726 | 186,235,651 | $ | 0.03 | ||||||||
Effect of dilutive securities: | |||||||||||||
Group A Units | — | — | 267,489,478 | ||||||||||
RSUs | — | — | 22,538,548 | ||||||||||
Diluted | $ | 5,726 | 186,235,651 | $ | 0.03 |
Three Months Ended September 30, 2016 | Net Income Attributable to Class A Shareholders | Weighted-Average Class A Shares Outstanding | Earnings Per Class A Share | Number of Antidilutive Units Excluded from Diluted Calculation | |||||||||
(dollars in thousands, except per share amounts) | |||||||||||||
Basic | $ | 14,285 | 182,521,225 | $ | 0.08 | ||||||||
Effect of dilutive securities: | |||||||||||||
Group A Units | 9,782 | 297,317,019 | — | ||||||||||
RSUs | — | — | 14,470,201 | ||||||||||
Diluted | $ | 24,067 | 479,838,244 | $ | 0.05 |
Nine Months Ended September 30, 2017 | Net Income Attributable to Class A Shareholders | Weighted-Average Class A Shares Outstanding | Earnings Per Class A Share | Number of Antidilutive Units Excluded from Diluted Calculation | |||||||||
(dollars in thousands, except per share amounts) | |||||||||||||
Basic | $ | 11,660 | 186,201,389 | $ | 0.06 | ||||||||
Effect of dilutive securities: | |||||||||||||
Group A Units | — | — | 273,923,088 | ||||||||||
RSUs | — | — | 21,733,730 | ||||||||||
Diluted | $ | 11,660 | 186,201,389 | $ | 0.06 |
Nine Months Ended September 30, 2016 | Net Loss Attributable to Class A Shareholders | Weighted-Average Class A Shares Outstanding | Loss Per Class A Share | Number of Antidilutive Units Excluded from Diluted Calculation | |||||||||
(dollars in thousands, except per share amounts) | |||||||||||||
Basic | $ | (133,642 | ) | 182,508,296 | $ | (0.73 | ) | ||||||
Effect of dilutive securities: | |||||||||||||
Group A Units | (226,476 | ) | 297,317,120 | — | |||||||||
RSUs | — | — | 14,092,299 | ||||||||||
Diluted | $ | (360,118 | ) | 479,825,416 | $ | (0.75 | ) |
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||
2017 | 2016 | 2017 | 2016 | ||||||||||||
(dollars in thousands) | |||||||||||||||
Fees charged on investments held by related parties: | |||||||||||||||
Management fees | $ | 2,703 | $ | 4,472 | $ | 8,037 | $ | 13,731 | |||||||
Incentive income | $ | 141 | $ | 825 | $ | 2,476 | $ | 2,825 |
Unearned Incentive Income | |||
(dollars in thousands) | |||
Balance as of December 31, 2016 | $ | 96,079 | |
Incentive income collected but subject to clawback | 30,024 | ||
Incentive income recognized | (3,270 | ) | |
Balance as of September 30, 2017 | $ | 122,833 |
• | Income allocations to the Company’s executive managing directors on their direct interests in the Oz Operating Group. Management reviews operating performance at the Oz Operating Group level, where the Company’s operations are performed, prior to making any income allocations. |
• | Equity-based compensation expenses, depreciation and amortization expenses, and gains and losses on fixed assets, as management does not consider these items 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 gains and losses on investments in funds, as management does not consider these to be reflective of operating performance. |
• | Amounts related to the consolidated 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. |
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||
2017 | 2016 | 2017 | 2016 | ||||||||||||
(dollars in thousands) | |||||||||||||||
Oz Funds Segment: | |||||||||||||||
Economic Income Revenues | $ | 119,390 | $ | 131,101 | $ | 380,999 | $ | 433,542 | |||||||
Economic Income | $ | 49,768 | $ | 52,725 | $ | 157,891 | $ | (229,800 | ) |
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||
2017 | 2016 | 2017 | 2016 | ||||||||||||
(dollars in thousands) | |||||||||||||||
Total consolidated revenues | $ | 131,999 | $ | 148,105 | $ | 420,097 | $ | 489,105 | |||||||
Adjustment to management fees(1) | (4,827 | ) | (8,808 | ) | (15,488 | ) | (31,362 | ) | |||||||
Adjustment to other revenues(2) | 141 | — | (1,117 | ) | — | ||||||||||
Other Operations revenues | (5,868 | ) | (7,738 | ) | (18,975 | ) | (22,939 | ) | |||||||
Income of consolidated funds | (2,055 | ) | (458 | ) | (3,518 | ) | (1,262 | ) | |||||||
Economic Income Revenues - Oz Funds Segment | $ | 119,390 | $ | 131,101 | $ | 380,999 | $ | 433,542 |
(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 funds is also removed. |
(2) | Adjustment to exclude realized gains on sale of fixed assets. |
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||
2017 | 2016 | 2017 | 2016 | ||||||||||||
(dollars in thousands) | |||||||||||||||
Net Income (Loss) Attributable to Class A Shareholders—GAAP | $ | 5,726 | $ | 14,285 | $ | 11,660 | $ | (133,642 | ) | ||||||
Change in redemption value of Preferred Units | — | — | 2,853 | — | |||||||||||
Net Income (Loss) Attributable to Och-Ziff Capital Management Group LLC—GAAP | $ | 5,726 | $ | 14,285 | $ | 14,513 | $ | (133,642 | ) | ||||||
Net income (loss) attributable to Group A Units | 9,500 | 16,313 | 41,145 | (187,338 | ) | ||||||||||
Equity-based compensation, net of RSUs settled in cash | 22,128 | 18,298 | 63,566 | 56,311 | |||||||||||
Income taxes | 1,942 | 9,986 | 17,242 | 39,436 | |||||||||||
Allocations to Group D Units | 1,554 | 950 | 4,914 | 2,850 | |||||||||||
Adjustment for expenses related to compensation and profit-sharing arrangements based on fund investment performance | 7,470 | 2,741 | 13,242 | 5,430 | |||||||||||
Changes in tax receivable agreement liability | — | (11,819 | ) | — | (11,990 | ) | |||||||||
Depreciation, amortization and net gains and losses on fixed assets | 2,237 | 7,965 | 7,693 | 14,947 | |||||||||||
Other adjustments | (568 | ) | (1,299 | ) | (2,177 | ) | (2,672 | ) | |||||||
Other Operations | (221 | ) | (4,695 | ) | (2,247 | ) | (13,132 | ) | |||||||
Economic Income - Oz Funds Segment | $ | 49,768 | $ | 52,725 | $ | 157,891 | $ | (229,800 | ) |
Three Months Ended September 30, 2017 | |||||||||||||||||||
June 30, 2017 | Inflows / (Outflows) | Distributions / Other Reductions | Appreciation / (Depreciation) | September 30, 2017 | |||||||||||||||
(dollars in thousands) | |||||||||||||||||||
Multi-strategy funds | $ | 16,091,042 | $ | (1,810,922 | ) | $ | — | $ | 345,756 | $ | 14,625,876 | ||||||||
Credit | |||||||||||||||||||
Opportunistic credit funds | 5,341,522 | (9,969 | ) | (16,510 | ) | 119,655 | 5,434,698 | ||||||||||||
Institutional Credit Strategies | 8,514,811 | 924,089 | — | 14,473 | 9,453,373 | ||||||||||||||
Real estate funds | 2,617,832 | 8,079 | (28,344 | ) | (43 | ) | 2,597,524 | ||||||||||||
Other | 632,452 | (31,573 | ) | (1,078 | ) | 3,903 | 603,704 | ||||||||||||
Total | $ | 33,197,659 | $ | (920,296 | ) | $ | (45,932 | ) | $ | 483,744 | $ | 32,715,175 |
Three Months Ended September 30, 2016 | |||||||||||||||||||
June 30, 2016 | Inflows / (Outflows) | Distributions / Other Reductions | Appreciation / (Depreciation) | September 30, 2016 | |||||||||||||||
(dollars in thousands) | |||||||||||||||||||
Multi-strategy funds | $ | 26,094,394 | $ | (3,452,066 | ) | $ | — | $ | 735,076 | $ | 23,377,404 | ||||||||
Credit | |||||||||||||||||||
Opportunistic credit funds | 5,192,756 | (11,375 | ) | (206,973 | ) | 301,937 | 5,276,345 | ||||||||||||
Institutional Credit Strategies | 7,245,508 | 15,432 | — | 4,871 | 7,265,811 | ||||||||||||||
Real estate funds | 2,213,821 | 8,494 | (76,620 | ) | (838 | ) | 2,144,857 | ||||||||||||
Other | 1,233,959 | 20,895 | (50,284 | ) | 34,794 | 1,239,364 | |||||||||||||
Total | $ | 41,980,438 | $ | (3,418,620 | ) | $ | (333,877 | ) | $ | 1,075,840 | $ | 39,303,781 |
Nine Months Ended September 30, 2017 | |||||||||||||||||||
December 31, 2016 | Inflows / (Outflows) | Distributions / Other Reductions | Appreciation / (Depreciation) | September 30, 2017 | |||||||||||||||
(dollars in thousands) | |||||||||||||||||||
Multi-strategy funds | $ | 21,084,548 | $ | (8,175,198 | ) | $ | — | $ | 1,716,526 | $ | 14,625,876 | ||||||||
Credit | |||||||||||||||||||
Opportunistic credit funds | 5,376,080 | (249,550 | ) | (36,279 | ) | 344,447 | 5,434,698 | ||||||||||||
Institutional Credit Strategies | 8,019,510 | 1,437,740 | — | (3,877 | ) | 9,453,373 | |||||||||||||
Real estate funds | 2,213,364 | 459,476 | (75,943 | ) | 627 | 2,597,524 | |||||||||||||
Other | 1,186,801 | (597,581 | ) | (31,094 | ) | 45,578 | 603,704 | ||||||||||||
Total | $ | 37,880,303 | $ | (7,125,113 | ) | $ | (143,316 | ) | $ | 2,103,301 | $ | 32,715,175 |
Nine Months Ended September 30, 2016 | |||||||||||||||||||
December 31, 2015 | Inflows / (Outflows) | Distributions / Other Reductions | Appreciation / (Depreciation) | September 30, 2016 | |||||||||||||||
(dollars in thousands) | |||||||||||||||||||
Multi-strategy funds | $ | 29,510,248 | $ | (6,213,273 | ) | $ | — | $ | 80,429 | $ | 23,377,404 | ||||||||
Credit | |||||||||||||||||||
Opportunistic credit funds | 5,383,629 | (54,727 | ) | (495,373 | ) | 442,816 | 5,276,345 | ||||||||||||
Institutional Credit Strategies | 7,241,680 | 29,608 | — | (5,477 | ) | 7,265,811 | |||||||||||||
Real estate funds | 2,048,559 | 239,489 | (137,985 | ) | (5,206 | ) | 2,144,857 | ||||||||||||
Other | 1,310,745 | (553 | ) | (50,284 | ) | (20,544 | ) | 1,239,364 | |||||||||||
Total | $ | 45,494,861 | $ | (5,999,456 | ) | $ | (683,642 | ) | $ | 492,018 | $ | 39,303,781 |
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||
2017 | 2016 | 2017 | 2016 | ||||||||||||
(dollars in thousands) | |||||||||||||||
Weighted-average assets under management | $ | 32,032,309 | $ | 38,794,212 | $ | 32,532,857 | $ | 41,640,771 | |||||||
Average management fee rates | 0.90 | % | 1.23 | % | 0.94 | % | 1.27 | % |
Assets Under Management as of September 30, | Returns for the Nine Months Ended September 30, | Annualized Returns Since Inception Through September 30, 2017 | ||||||||||||||||||||||||
2017 | 2016 | |||||||||||||||||||||||||
2017 | 2016 | Gross | Net | Gross | Net | Gross | Net | |||||||||||||||||||
Fund | (dollars in thousands) | |||||||||||||||||||||||||
OZ Master Fund(1) | $ | 12,133,186 | $ | 19,777,558 | 13.6 | % | 9.7 | % | 2.7 | % | 1.1 | % | 16.9 | % | (1) | 11.9 | % | (1) | ||||||||
OZ Asia Master Fund | 702,375 | 1,018,175 | 23.1 | % | 18.1 | % | -2.1 | % | -3.4 | % | 10.2 | % | 6.1 | % | ||||||||||||
OZ Europe Master Fund | 260,525 | 467,741 | 7.5 | % | 4.8 | % | 2.5 | % | 1.2 | % | 11.6 | % | 7.6 | % | ||||||||||||
OZ Enhanced Master Fund | 654,062 | 824,597 | 22.9 | % | 16.8 | % | 4.0 | % | 2.3 | % | 15.0 | % | 10.2 | % | ||||||||||||
Other funds | 875,728 | 1,289,333 | n/m | n/m | n/m | n/m | n/m | n/m | ||||||||||||||||||
$ | 14,625,876 | $ | 23,377,404 |
(1) | The annualized returns since inception are those of the Och-Ziff Multi-Strategy Composite, which represents the composite performance of all accounts that were managed in accordance with our broad multi-strategy mandate that were not subject to portfolio investment restrictions or other factors that limited our investment discretion since inception on April 1, 1994. Performance is calculated using the total return of all such accounts net of all investment fees and expenses of such accounts, except incentive income on unrealized gains attributable to Special Investments that could reduce returns in these investments at the time of realization, and the returns include the reinvestment of all dividends and other income. The performance calculation for the OZ Master Fund excludes realized and unrealized gains and losses attributable to currency hedging specific to certain investors investing in OZ Master Fund in currencies other than the U.S. Dollar. For the period from April 1, 1994 through December 31, 1997, the returns are gross of certain overhead expenses that were reimbursed by the accounts. Such reimbursement arrangements were terminated at the inception of the OZ Master Fund on January 1, 1998. The size of the accounts comprising the composite during the time period shown vary materially. Such differences impacted our investment decisions and the diversity of the investment strategies followed. Furthermore, the composition of the investment strategies we follow is subject to our discretion, has varied materially since inception and is expected to vary materially in the future. As of September 30, 2017, the gross and net annualized returns since the OZ Master Fund’s inception on January 1, 1998 were 13.2% and 8.9%, respectively. |
Assets Under Management as of September 30, | |||||||
2017 | 2016 | ||||||
(dollars in thousands) | |||||||
Opportunistic credit funds | $ | 5,434,698 | $ | 5,276,345 | |||
Institutional Credit Strategies | 9,453,373 | 7,265,811 | |||||
$ | 14,888,071 | $ | 12,542,156 |
Assets Under Management as of September 30, | Returns for the Nine Months Ended September 30, | Annualized Returns Since Inception Through September 30, 2017 | |||||||||||||||||||||||
2017 | 2016 | 2017 | 2016 | ||||||||||||||||||||||
Gross | Net | Gross | Net | Gross | Net | ||||||||||||||||||||
Fund | (dollars in thousands) | ||||||||||||||||||||||||
OZ Credit Opportunities Master Fund | $ | 1,739,676 | $ | 1,728,712 | 11.8 | % | 8.0 | % | 13.1 | % | 11.4 | % | 17.3 | % | 12.8 | % | |||||||||
Customized Credit Focused Platform | 2,918,757 | 2,630,186 | 9.4 | % | 7.0 | % | 15.6 | % | 11.8 | % | 19.4 | % | 14.7 | % | |||||||||||
Closed-end opportunistic credit funds | 308,278 | 458,102 | See below for return information on our closed-end opportunistic credit funds. | ||||||||||||||||||||||
Other funds | 467,987 | 459,345 | n/m | n/m | n/m | n/m | n/m | n/m | |||||||||||||||||
$ | 5,434,698 | $ | 5,276,345 |
Assets Under Management as of September 30, | Inception to Date as of September 30, 2017 | ||||||||||||||||||||||
IRR | |||||||||||||||||||||||
2017 | 2016 | Total Commitments | Total Invested Capital(1) | Gross(2) | Net(3) | Gross MOIC(4) | |||||||||||||||||
Fund (Investment Period) | (dollars in thousands) | ||||||||||||||||||||||
OZ European Credit Opportunities Fund (2012-2015)(5) | $ | 64,538 | $ | 110,418 | $ | 459,600 | $ | 305,487 | 16.5 | % | 12.5 | % | 1.5x | ||||||||||
OZ Structured Products Domestic Fund II (2011-2014)(5) | 111,596 | 156,860 | 326,850 | 326,850 | 19.5 | % | 15.2 | % | 2.0x | ||||||||||||||
OZ Structured Products Offshore Fund II (2011-2014)(5) | 118,512 | 158,404 | 304,531 | 304,531 | 16.9 | % | 13.0 | % | 1.8x | ||||||||||||||
OZ Structured Products Offshore Fund I (2010-2013)(5) | 5,627 | 11,573 | 155,098 | 155,098 | 24.0 | % | 19.2 | % | 2.1x | ||||||||||||||
OZ Structured Products Domestic Fund I (2010-2013)(5) | 5,055 | 7,901 | 99,986 | 99,986 | 22.9 | % | 18.2 | % | 2.0x | ||||||||||||||
Other funds | 2,950 | 12,946 | 298,250 | 298,250 | n/m | n/m | n/m | ||||||||||||||||
$ | 308,278 | $ | 458,102 | $ | 1,644,315 | $ | 1,490,202 |
(1) | Represents funded capital commitments net of recallable distributions to investors. |
(2) | Gross IRR for our closed-end opportunistic credit funds represents the estimated, unaudited, annualized return based on the timing of cash inflows and outflows for the fund as of September 30, 2017, including the fair value of unrealized investments as of such date, together with any appreciation or depreciation from related hedging activity. Gross IRR does not include the effects of management fees or incentive income, which would reduce the return, and includes the reinvestment of all fund income. |
(3) | Net IRR is calculated as described in footnote (2), but is reduced by all management fees, as well as paid incentive and accrued incentive income that will be payable upon the distribution of each fund’s capital in accordance with the terms of the relevant fund. Accrued incentive income may be higher or lower at such time. The net IRR represents a composite rate of return for a fund and does not reflect the net IRR specific to any individual investor. |
(4) | Gross MOIC for our closed-end opportunistic credit funds is calculated by dividing the sum of the net asset value of the fund, accrued incentive income, life-to-date incentive income and management fees paid and any non-recallable distributions made from the fund by the invested capital. |
(5) | These funds have concluded their investment periods, and therefore we expect assets under management for these funds to decrease as investments are sold and the related proceeds are distributed to the investors in these funds. |
Assets Under Management as of September 30, | |||||||||||||
Initial Closing Date | Initial Deal Size | 2017 | 2016 | ||||||||||
(dollars in thousands) | |||||||||||||
CLOs | |||||||||||||
OZLM I | July 19, 2012 | $ | 510,700 | $ | 496,684 | $ | 497,908 | ||||||
OZLM II | November 1, 2012 | 560,100 | 509,048 | 513,343 | |||||||||
OZLM III | February 20, 2013 | 653,250 | 608,852 | 612,283 | |||||||||
OZLM IV | June 27, 2013 | 600,000 | 535,978 | 541,515 | |||||||||
OZLM V | December 17, 2013 | 501,250 | 467,159 | 469,042 | |||||||||
OZLM VI | April 16, 2014 | 621,250 | 595,547 | 597,638 | |||||||||
OZLM VII | June 26, 2014 | 824,750 | 793,458 | 796,600 | |||||||||
OZLM VIII | September 9, 2014 | 622,250 | 595,657 | 596,991 | |||||||||
OZLM IX | December 22, 2014 | 510,208 | 499,437 | 495,255 | |||||||||
OZLM XI | March 12, 2015 | 510,500 | 490,284 | 491,540 | |||||||||
OZLM XII | May 28, 2015 | 565,650 | 549,377 | 547,914 | |||||||||
OZLM XIII | August 6, 2015 | 511,600 | 495,529 | 496,370 | |||||||||
OZLM XIV | December 21, 2015 | 507,420 | 502,433 | 497,179 | |||||||||
OZLM XV | December 20, 2016 | 409,250 | 395,804 | — | |||||||||
OZLME I | December 15, 2016 | 430,490 | 470,404 | — | |||||||||
OZLM XVI | June 8, 2017 | 410,250 | 401,172 | — | |||||||||
OZLM XVII | August 3, 2017 | 512,000 | 499,692 | — | |||||||||
OZLME II | September 14, 2017 | 494,708 | 468,738 | — | |||||||||
9,755,626 | 9,375,253 | 7,153,578 | |||||||||||
Other funds | n/a | n/a | 78,120 | 112,233 | |||||||||
$ | 9,755,626 | $ | 9,453,373 | $ | 7,265,811 |
Assets Under Management as of September 30, | |||||||
2017 | 2016 | ||||||
Fund | (dollars in thousands) | ||||||
Och-Ziff Real Estate Fund I | $ | 13,102 | $ | 16,554 | |||
Och-Ziff Real Estate Fund II | 286,003 | 307,108 | |||||
Och-Ziff Real Estate Fund III | 1,453,133 | 1,455,032 | |||||
Och-Ziff Real Estate Credit Fund I | 695,464 | 285,522 | |||||
Other funds | 149,822 | 80,641 | |||||
$ | 2,597,524 | $ | 2,144,857 |
Inception to Date as of September 30, 2017 | ||||||||||||||||||||||||||||||||
Total Investments | Realized/Partially Realized Investments(1) | |||||||||||||||||||||||||||||||
Total Commitments | Invested Capital(2) | Total Value(3) | Gross IRR(4) | Net IRR(5) | Gross MOIC(6) | Invested Capital | Total Value | Gross IRR(4) | Gross MOIC(6) | |||||||||||||||||||||||
Fund (Investment Period) | (dollars in thousands) | |||||||||||||||||||||||||||||||
Och-Ziff Real Estate Fund I(7) (2005-2010) | $ | 408,081 | $ | 385,457 | $ | 811,342 | 25.1 | % | 15.7 | % | 2.1x | $ | 372,355 | $ | 807,672 | 26.6 | % | 2.2x | ||||||||||||||
Och-Ziff Real Estate Fund II(7) (2011-2014) | 839,508 | 762,588 | 1,422,955 | 32.7 | % | 21.2 | % | 1.9x | 573,690 | 1,197,277 | 38.4 | % | 2.1x | |||||||||||||||||||
Och-Ziff Real Estate Fund III(8) (2014-2019) | 1,500,000 | 606,679 | 843,218 | n/m | n/m | n/m | 182,134 | 291,895 | n/m | n/m | ||||||||||||||||||||||
Och-Ziff Real Estate Credit Fund I(8) (2015-2019) | 736,225 | 97,396 | 116,247 | n/m | n/m | n/m | 48,771 | 58,468 | n/m | n/m | ||||||||||||||||||||||
Other funds | 292,671 | 121,619 | 230,735 | n/m | n/m | n/m | — | — | n/m | n/m | ||||||||||||||||||||||
$ | 3,776,485 | $ | 1,973,739 | $ | 3,424,497 | $ | 1,176,950 | $ | 2,355,312 |
Unrealized Investments as of September 30, 2017 | |||||||||
Invested Capital | Total Value | Gross MOIC(6) | |||||||
Fund (Investment Period) | (dollars in thousands) | ||||||||
Och-Ziff Real Estate Fund I (2005-2010)(7) | $ | 13,102 | $ | 3,670 | 0.3x | ||||
Och-Ziff Real Estate Fund II (2011-2014)(7) | 188,898 | 225,678 | 1.2x | ||||||
Och-Ziff Real Estate Fund III (2014-2019)(8) | 424,545 | 551,323 | n/m | ||||||
Och-Ziff Real Estate Credit Fund I (2015-2019)(8) | 48,625 | 57,779 | n/m | ||||||
Other funds | 121,619 | 230,735 | n/m | ||||||
$ | 796,789 | $ | 1,069,185 |
(1) | An investment is considered partially realized when the total amount of proceeds received, including dividends, interest or other distributions of income and return of capital, represents at least 50% of invested capital. |
(2) | Invested capital represents total aggregate contributions made for investments by the fund. |
(3) | Total value represents the sum of realized distributions and the fair value of unrealized and partially realized investments as of September 30, 2017. Total value will be impacted (either positively or negatively) by future economic and other factors. Accordingly, the total value ultimately realized will likely be higher or lower than the amounts presented as of September 30, 2017. |
(4) | Gross IRR for our real estate funds represents the estimated, unaudited, annualized return based on the timing of cash inflows and outflows for the aggregated investments as of September 30, 2017, including the fair value of unrealized and partially realized investments as of such date, together with any unrealized appreciation or depreciation from related hedging activity. Gross IRR is not adjusted for estimated management fees, incentive income or other fees or expenses to be paid by the fund, which would reduce the return. |
(5) | Net IRR is calculated as described in footnote (4), but is reduced by all management fees and other fund-level fees and expenses not adjusted for in the calculation of gross IRR. Net IRR is further reduced by paid incentive and accrued incentive income that will be payable upon the distribution of each fund’s capital in accordance with the terms of the relevant fund. Accrued incentive income may be higher or lower at such time. The net IRR represents a composite rate of return for a fund and does not reflect the net IRR specific to any individual investor. |
(6) | Gross MOIC for our real estate funds is calculated by dividing the value of a fund’s investments by the invested capital, prior to adjustments for incentive income, management fees or other expenses to be paid by the fund. |
(7) | These funds have concluded their investment periods, and therefore we expect assets under management for these funds to decrease as investments are sold and the related proceeds are distributed to the investors in these funds. |
(8) | These funds recently launched and have only invested a small portion of their committed capital; therefore, IRR and MOIC information is not presented, as it is not meaningful. |
September 30, 2017 | |||||||
Longer-Term Assets Under Management | Accrued Unrecognized Incentive Income | ||||||
(dollars in thousands) | |||||||
Multi-strategy funds | $ | 631,526 | $ | 24,362 | |||
Credit | |||||||
Opportunistic credit funds | 3,873,188 | 210,774 | |||||
Institutional Credit Strategies | 9,408,698 | — | |||||
Real estate funds | 2,597,524 | 165,720 | |||||
Other | 287,055 | 1,628 | |||||
$ | 16,797,991 | $ | 402,484 |
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||
2017 | 2016 | 2017 | 2016 | ||||||||||||
(dollars in thousands) | |||||||||||||||
Management fees | $ | 77,171 | $ | 128,513 | $ | 243,508 | $ | 428,822 | |||||||
Incentive income | 51,249 | 18,754 | 168,990 | 57,477 | |||||||||||
Other revenues | 1,524 | 380 | 4,081 | 1,544 | |||||||||||
Income of consolidated funds | 2,055 | 458 | 3,518 | 1,262 | |||||||||||
Total Revenues | $ | 131,999 | $ | 148,105 | $ | 420,097 | $ | 489,105 |
• | A $51.3 million decrease in management fees, driven primarily by lower assets under management in our multi-strategy funds, as well as lower average management fee rates. See “Assets Under Management and Fund Performance—Weighted-Average Assets Under Management and Average Management Fee Rate” above for information regarding our average management fee rate. |
• | A $32.5 million increase in incentive income, primarily due to the following: |
• | A $185.3 million decrease in management fees, driven primarily by lower assets under management in our multi-strategy funds, as well as lower average management fee rates. See “Assets Under Management and Fund Performance—Weighted-Average Assets Under Management and Average Management Fee Rate” above for information regarding our average management fee rate. |
• | A $111.5 million increase in incentive income, primarily due to the following: |
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||
2017 | 2016 | 2017 | 2016 | ||||||||||||
(dollars in thousands) | |||||||||||||||
Compensation and benefits | $ | 74,490 | $ | 57,758 | $ | 214,112 | $ | 169,762 | |||||||
Interest expense | 5,611 | 6,129 | 17,043 | 17,452 | |||||||||||
General, administrative and other | 33,136 | 56,125 | 114,229 | 596,321 | |||||||||||
Expenses of consolidated funds | 8,824 | 17 | 9,368 | 316 | |||||||||||
Total Expenses | $ | 122,061 | $ | 120,029 | $ | 354,752 | $ | 783,851 |
• | A $16.7 million increase in compensation and benefits expenses, primarily driven by the following: (i) a $15.0 million increase in bonus expense primarily due to the decision to provide and accrue for minimum discretionary bonuses; and (ii) a $4.0 million increase in equity-based compensation. The increase in equity-based compensation expenses was primarily driven by $6.1 million of Group P Units amortization, which units were granted in 2017, partially offset by a $3.1 million decrease in Group A Units amortization due to a lower number of unvested units outstanding. These increases in compensation and benefits expenses were partially offset by a $2.8 million decrease in salaries and benefits, primarily due to lower headcount as our global headcount decreased to 491 as of September 30, 2017 from 548 as of September 30, 2016. |
• | An $8.8 million increase in expenses of consolidated funds was primarily due to consolidation of a CLO in warehouse during the second and third quarters of 2017. The CLO was deconsolidated at launch in September of 2017. |
• | An offsetting $23.0 million decrease in general, administrative and other expenses driven primarily by the following: (i) an $8.8 million decrease in professional services, which was driven primarily by lower legal fees; (ii) a $4.4 million decrease in the prior year period related to one of our corporate aircraft that was reclassified as held for sale during the third quarter of 2016; (iii) a $4.0 million decrease in recurring placement and related service fees; and (iv) a $2.2 million decrease in insurance expense. The remainder of the decrease was due to reductions across various other expenses. |
• | An offsetting $518 thousand decrease in interest expense, primarily due to the repayments of the Revolving Credit Facility and the Aircraft Loan in the first quarter of 2017. These decreases were partially offset by increases due to interest expense on the CLO Investments Loans that were entered into in November 2016 and throughout 2017. |
• | A $482.1 million decrease in general, administrative and other expenses driven primarily by $412.1 million of settlements expense accrued in 2016, as well as a $30.2 million decrease in professional services, which was driven primarily by lower legal fees, as well as reductions across various other expenses. |
• | An offsetting $44.4 million increase in compensation and benefits expenses primarily driven by the following: (i) a $46.9 million increase in bonus expense primarily due to the decision to provide and accrue for minimum discretionary bonuses; and (ii) a $7.4 million increase in equity-based compensation expense. The increase in equity-based compensation expense was primarily driven by $14.2 million of Group P Units amortization, which units were granted in 2017, and a $2.6 million increase in RSU amortization, offset by a $9.4 million decrease in Group A Units amortization due to a lower number of unvested units outstanding. Further contributing to the increase in compensation and benefits expenses was a $2.1 million increase in distributions accrued on the Group D Units. These increases were partially offset by a $12.0 million decrease in salaries and benefits, which was primarily due to lower headcount, as discussed above. |
• | A $9.1 million increase in expenses of consolidated funds was primarily due to consolidation of a CLO in warehouse during the second and third quarters of 2017. The CLO was deconsolidated at launch in September of 2017. |
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||
2017 | 2016 | 2017 | 2016 | ||||||||||||
(dollars in thousands) | |||||||||||||||
Changes in tax receivable agreement liability | $ | — | $ | 11,819 | $ | — | $ | 11,990 | |||||||
Net gains on investments in funds and joint ventures | 264 | 803 | 1,050 | 1,302 | |||||||||||
Net gains of consolidated funds | 7,658 | 821 | 8,278 | 2,182 | |||||||||||
Total Other Income | $ | 7,922 | $ | 13,443 | $ | 9,328 | $ | 15,474 |
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||
2017 | 2016 | 2017 | 2016 | ||||||||||||
(dollars in thousands) | |||||||||||||||
Income taxes | $ | 1,942 | $ | 9,986 | $ | 17,242 | $ | 39,436 |
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||
2017 | 2016 | 2017 | 2016 | ||||||||||||
(dollars in thousands) | |||||||||||||||
Group A Units | $ | 9,500 | $ | 16,313 | $ | 41,145 | $ | (187,338 | ) | ||||||
Consolidated funds | — | — | — | 262 | |||||||||||
Other | 260 | 257 | 535 | 209 | |||||||||||
Total | $ | 9,760 | $ | 16,570 | $ | 41,680 | $ | (186,867 | ) | ||||||
Redeemable noncontrolling interests | $ | 432 | $ | 678 | $ | 1,238 | $ | 1,801 |
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||
2017 | 2016 | 2017 | 2016 | ||||||||||||
(dollars in thousands) | |||||||||||||||
Net income (loss) attributable to Class A Shareholders | $ | 5,726 | $ | 14,285 | $ | 11,660 | $ | (133,642 | ) |
• | Income allocations to our executive managing directors on their direct interests in the Oz Operating Group. Management reviews operating performance at the Oz Operating Group level, where our operations are performed, prior to making any income allocations. |
• | Equity-based compensation expenses, depreciation and amortization expenses, and gains and losses on fixed assets, as management does not consider these items 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 gains and losses on investments in funds, as management does not consider these items to be reflective of operating performance. |
• | Amounts related to the consolidated 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. |
Three Months Ended September 30, 2017 | Three Months Ended September 30, 2016 | ||||||||||||||||||||||
Oz Funds Segment | Other Operations | Total Company | Oz Funds Segment | Other Operations | Total Company | ||||||||||||||||||
(dollars in thousands) | |||||||||||||||||||||||
Economic Income Basis | |||||||||||||||||||||||
Management fees | $ | 67,287 | $ | 5,057 | $ | 72,344 | $ | 114,521 | $ | 5,184 | $ | 119,705 | |||||||||||
Incentive income | 50,476 | 773 | 51,249 | 16,202 | 2,552 | 18,754 | |||||||||||||||||
Other revenues | 1,627 | 38 | 1,665 | 378 | 2 | 380 | |||||||||||||||||
Total Economic Income Revenues | $ | 119,390 | $ | 5,868 | $ | 125,258 | $ | 131,101 | $ | 7,738 | $ | 138,839 |
• | A $47.4 million decrease in management fees, driven primarily by lower assets under management in our multi-strategy funds, as well as lower average management fee rates. See “Assets Under Management and Fund Performance—Weighted-Average Assets Under Management and Average Management Fee Rate” above for information regarding our average management fee rate. |
• | A $32.5 million increase in incentive income, primarily due to the following: |
Nine Months Ended September 30, 2017 | Nine Months Ended September 30, 2016 | ||||||||||||||||||||||
Oz Funds Segment | Other Operations | Total Company | Oz Funds Segment | Other Operations | Total Company | ||||||||||||||||||
(dollars in thousands) | |||||||||||||||||||||||
Economic Income Basis | |||||||||||||||||||||||
Management fees | $ | 212,420 | $ | 15,600 | $ | 228,020 | $ | 381,904 | $ | 15,556 | $ | 397,460 | |||||||||||
Incentive income | 165,719 | 3,271 | 168,990 | 50,105 | 7,372 | 57,477 | |||||||||||||||||
Other revenues | 2,860 | 104 | 2,964 | 1,533 | 11 | 1,544 | |||||||||||||||||
Total Economic Income Revenues | $ | 380,999 | $ | 18,975 | $ | 399,974 | $ | 433,542 | $ | 22,939 | $ | 456,481 |
• | A $169.4 million decrease in management fees, driven primarily by lower assets under management in our multi-strategy funds, as well as lower average management fee rates. See “Assets Under Management and Fund Performance—Weighted-Average Assets Under Management and Average Management Fee Rate” above for information regarding our average management fee rate. |
• | A $111.5 million increase in incentive income, primarily due to the following: |
Three Months Ended September 30, 2017 | Three Months Ended September 30, 2016 | ||||||||||||||||||||||
Oz Funds Segment | Other Operations | Total Company | Oz Funds Segment | Other Operations | Total Company | ||||||||||||||||||
(dollars in thousands) | |||||||||||||||||||||||
Economic Income Basis | |||||||||||||||||||||||
Compensation and benefits | $ | 38,500 | $ | 5,090 | $ | 43,590 | $ | 33,506 | $ | 2,438 | $ | 35,944 | |||||||||||
Non-compensation expenses | 31,124 | 557 | 31,681 | 44,877 | 605 | 45,482 | |||||||||||||||||
Total Economic Income Expenses | $ | 69,624 | $ | 5,647 | $ | 75,271 | $ | 78,383 | $ | 3,043 | $ | 81,426 |
• | A $13.8 million decrease in non-compensation expenses was primarily due to an $8.8 million decrease in professional services, which was driven by lower legal fees, as well as a $2.2 million decrease in insurance expense. The remainder of the decrease was due to reductions across various other expenses. |
• | A $7.6 million increase in compensation and benefit expenses primarily due to a $10.5 million increase in bonus expense, which was driven by the decision to provide and accrue for minimum discretionary bonuses, partially offset by a $2.8 million decrease in salaries and benefits expense, which was driven by lower headcount. |
Nine Months Ended September 30, 2017 | Nine Months Ended September 30, 2016 | ||||||||||||||||||||||
Oz Funds Segment | Other Operations | Total Company | Oz Funds Segment | Other Operations | Total Company | ||||||||||||||||||
(dollars in thousands) | |||||||||||||||||||||||
Economic Income Basis | |||||||||||||||||||||||
Compensation and benefits | $ | 118,168 | $ | 14,887 | $ | 133,055 | $ | 98,604 | $ | 7,092 | $ | 105,696 | |||||||||||
Non-compensation expenses | 104,942 | 1,841 | 106,783 | 564,750 | 2,715 | 567,465 | |||||||||||||||||
Total Economic Income Expenses | $ | 223,110 | $ | 16,728 | $ | 239,838 | $ | 663,354 | $ | 9,807 | $ | 673,161 |
• | A $460.7 million decrease in non-compensation expenses, driven primarily by $412.1 million of settlements expense accrued in 2016, as well as a $30.2 million decrease in professional services, which was driven primarily by lower legal fees, as well as reductions across various other expenses. |
• | A $27.4 million increase in compensation expenses primarily due to a $39.3 million increase in bonus expense, which was driven by the decision to provide and accrue for minimum discretionary bonuses, partially offset by a $12.0 million decrease in salaries and benefits expense, which was driven by lower headcount. |
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||
2017 | 2016 | 2017 | 2016 | ||||||||||||
(dollars in thousands) | |||||||||||||||
Economic Income: | |||||||||||||||
Oz Funds Segment | $ | 49,768 | $ | 52,725 | $ | 157,891 | $ | (229,800 | ) | ||||||
Other Operations | 221 | 4,695 | 2,247 | 13,132 | |||||||||||
Total Company | $ | 49,989 | $ | 57,420 | $ | 160,138 | $ | (216,668 | ) |
• | Provide capital to facilitate the growth of our business, including making risk retention investments in CLOs managed by us. |
• | Pay income taxes as well as compensation-related tax withholding obligations. |
• | Make cash distributions in accordance with our distribution policy as discussed below under “—Dividends and Distributions.” |
• | Support the future growth in our business. |
• | Create new or enhance existing products and investment platforms. |
• | Repay borrowings. |
• | Pursue new investment opportunities. |
• | Develop new distribution channels. |
• | Cover potential costs incurred in connection with the legal and regulatory matters described in the notes to our consolidated financial statements included in this report. |
• | The amount and timing of the income of Oz Corp will impact the payments to be made under the tax receivable agreement. To the extent that Oz Corp does not have sufficient taxable income to utilize the amortization deductions available as a result of the increased tax basis in the Oz Operating Partnerships’ assets, payments required under the tax receivable agreement would be reduced. |
• | The price of our Class A Shares at the time of any exchange will determine the actual increase in tax basis of the Oz Operating Partnerships’ assets resulting from such exchange; payments under the tax receivable agreement resulting from future exchanges, if any, will be dependent in part upon such actual increase in tax basis. |
• | The composition of the Oz Operating Partnerships’ assets at the time of any exchange will determine the extent to which Oz Corp may benefit from amortizing its increased tax basis in such assets and thus will impact the amount of future payments under the tax receivable agreement resulting from any future exchanges. |
• | The extent to which future exchanges are taxable will impact the extent to which Oz Corp will receive an increase in tax basis of the Oz Operating Partnerships’ assets as a result of such exchanges, and thus will impact the benefit derived by Oz Corp and the resulting payments, if any, to be made under the tax receivable agreement. |
• | The tax rates in effect at the time any potential tax savings are realized, which would affect the amount of any future payments under the tax receivable agreement. |
Class A Shares | ||||||||||
Payment Date | Record Date | Dividend per Share | Related Distributions to Executive Managing Directors (dollars in thousands) | |||||||
August 21, 2017 | August 14, 2017 | $ | 0.02 | $ | 6,904 | |||||
May 19, 2017 | May 12, 2017 | $ | 0.02 | $ | 6,904 | |||||
March 6, 2017 | February 27, 2017 | $ | 0.01 | $ | 3,228 |
Three Months Ended September 30, 2017 | |||||||||||
Oz Funds Segment | Other Operations | Total Company | |||||||||
(dollars in thousands) | |||||||||||
Net Income (Loss) Attributable to Class A Shareholders—GAAP | $ | 13,530 | $ | (7,804 | ) | $ | 5,726 | ||||
Change in redemption value of Preferred Units | — | — | — | ||||||||
Net Income (Loss) Allocated to Och-Ziff Capital Management Group LLC—GAAP | 13,530 | (7,804 | ) | 5,726 | |||||||
Net income allocated to Group A Units | 9,500 | — | 9,500 | ||||||||
Equity-based compensation, net of RSUs settled in cash | 21,448 | 680 | 22,128 | ||||||||
Income taxes | 1,766 | 176 | 1,942 | ||||||||
Allocations to Group D Units | 1,529 | 25 | 1,554 | ||||||||
Adjustment for expenses related to compensation and profit-sharing arrangements based on fund investment performance | 310 | 7,160 | 7,470 | ||||||||
Changes in tax receivable agreement liability | — | — | — | ||||||||
Depreciation, amortization and net gains and losses on fixed assets | 2,237 | — | 2,237 | ||||||||
Other adjustments | (552 | ) | (16 | ) | (568 | ) | |||||
Economic Income—Non-GAAP | $ | 49,768 | $ | 221 | $ | 49,989 |
Three Months Ended September 30, 2016 | |||||||||||
Oz Funds Segment | Other Operations | Total Company | |||||||||
(dollars in thousands) | |||||||||||
Net Income Attributable to Class A Shareholders—GAAP | $ | 13,160 | $ | 1,125 | $ | 14,285 | |||||
Change in redemption value of Preferred Units | — | — | — | ||||||||
Net Income Allocated to Och-Ziff Capital Management Group LLC—GAAP | $ | 13,160 | $ | 1,125 | $ | 14,285 | |||||
Net income allocated to Group A Units | 16,313 | — | 16,313 | ||||||||
Equity-based compensation, net of RSUs settled in cash | 17,709 | 589 | 18,298 | ||||||||
Income taxes | 9,887 | 99 | 9,986 | ||||||||
Allocations to Group D Units | 950 | — | 950 | ||||||||
Adjustment for expenses related to compensation and profit-sharing arrangements based on fund investment performance | — | 2,741 | 2,741 | ||||||||
Changes in tax receivable agreement liability | (11,819 | ) | — | (11,819 | ) | ||||||
Depreciation and amortization | 7,776 | 189 | 7,965 | ||||||||
Other adjustments | (1,251 | ) | (48 | ) | (1,299 | ) | |||||
Economic Income—Non-GAAP | $ | 52,725 | $ | 4,695 | $ | 57,420 |
Nine Months Ended September 30, 2017 | |||||||||||
Oz Funds Segment | Other Operations | Total Company | |||||||||
(dollars in thousands) | |||||||||||
Net Income (Loss) Attributable to Class A Shareholders—GAAP | $ | 24,504 | $ | (12,844 | ) | $ | 11,660 | ||||
Change in redemption value of Preferred Units | 2,853 | — | 2,853 | ||||||||
Net Income (Loss) Allocated to Och-Ziff Capital Management Group LLC—GAAP | 27,357 | (12,844 | ) | 14,513 | |||||||
Net income allocated to Group A Units | 41,145 | — | 41,145 | ||||||||
Equity-based compensation, net of RSUs settled in cash | 61,433 | 2,133 | 63,566 | ||||||||
Income taxes | 17,062 | 180 | 17,242 | ||||||||
Allocations to Group D Units | 4,839 | 75 | 4,914 | ||||||||
Adjustment for expenses related to compensation and profit-sharing arrangements based on fund investment performance | 310 | 12,932 | 13,242 | ||||||||
Changes in tax receivable agreement liability | — | — | — | ||||||||
Depreciation, amortization and net gains and losses on fixed assets | 7,693 | — | 7,693 | ||||||||
Other adjustments | (1,948 | ) | (229 | ) | (2,177 | ) | |||||
Economic Income—Non-GAAP | $ | 157,891 | $ | 2,247 | $ | 160,138 |
Nine Months Ended September 30, 2016 | |||||||||||
Oz Funds Segment | Other Operations | Total Company | |||||||||
(dollars in thousands) | |||||||||||
Net (Loss) Income Attributable to Class A Shareholders—GAAP | $ | (138,649 | ) | $ | 5,007 | $ | (133,642 | ) | |||
Change in redemption value of Preferred Units | — | — | — | ||||||||
Net (Loss) Income Allocated to Och-Ziff Capital Management Group LLC—GAAP | (138,649 | ) | 5,007 | (133,642 | ) | ||||||
Net loss allocated to Group A Units | (187,338 | ) | — | (187,338 | ) | ||||||
Equity-based compensation, net of RSUs settled in cash | 54,364 | 1,947 | 56,311 | ||||||||
Income taxes | 39,337 | 99 | 39,436 | ||||||||
Allocations to Group D Units | 2,850 | — | 2,850 | ||||||||
Adjustment for expenses related to compensation and profit-sharing arrangements based on fund investment performance | — | 5,430 | 5,430 | ||||||||
Changes in tax receivable agreement liability | (11,990 | ) | — | (11,990 | ) | ||||||
Depreciation and amortization | 14,385 | 562 | 14,947 | ||||||||
Other adjustments | (2,759 | ) | 87 | (2,672 | ) | ||||||
Economic Income—Non-GAAP | $ | (229,800 | ) | $ | 13,132 | $ | (216,668 | ) |
Three Months Ended September 30, 2017 | Three Months Ended September 30, 2016 | ||||||||||||||||||||||
Oz Funds Segment | Other Operations | Total Company | Oz Funds Segment | Other Operations | Total Company | ||||||||||||||||||
(dollars in thousands) | |||||||||||||||||||||||
Management fees—GAAP | $ | 72,114 | $ | 5,057 | $ | 77,171 | $ | 123,329 | $ | 5,184 | $ | 128,513 | |||||||||||
Adjustment to management fees(1) | (4,827 | ) | — | (4,827 | ) | (8,808 | ) | — | (8,808 | ) | |||||||||||||
Management Fees—Economic Income Basis—Non-GAAP | 67,287 | 5,057 | 72,344 | 114,521 | 5,184 | 119,705 | |||||||||||||||||
Incentive income—GAAP | 50,476 | 773 | 51,249 | 16,202 | 2,552 | 18,754 | |||||||||||||||||
Adjustment to incentive income(2) | — | — | — | — | — | — | |||||||||||||||||
Incentive Income—Economic Income Basis—Non-GAAP | 50,476 | 773 | 51,249 | 16,202 | 2,552 | 18,754 | |||||||||||||||||
Other revenues—GAAP | 1,486 | 38 | 1,524 | 378 | 2 | 380 | |||||||||||||||||
Adjustment to other revenues(3) | 141 | — | 141 | — | — | — | |||||||||||||||||
Other Revenues—Economic Income Basis—Non-GAAP | 1,627 | 38 | 1,665 | 378 | 2 | 380 | |||||||||||||||||
Total Revenues—Economic Income Basis—Non-GAAP | $ | 119,390 | $ | 5,868 | $ | 125,258 | $ | 131,101 | $ | 7,738 | $ | 138,839 |
Nine Months Ended September 30, 2017 | Nine Months Ended September 30, 2016 | ||||||||||||||||||||||
Oz Funds Segment | Other Operations | Total Company | Oz Funds Segment | Other Operations | Total Company | ||||||||||||||||||
(dollars in thousands) | |||||||||||||||||||||||
Management fees—GAAP | $ | 227,908 | $ | 15,600 | $ | 243,508 | $ | 413,266 | $ | 15,556 | $ | 428,822 | |||||||||||
Adjustment to management fees(1) | (15,488 | ) | — | (15,488 | ) | (31,362 | ) | — | (31,362 | ) | |||||||||||||
Management Fees—Economic Income Basis—Non-GAAP | 212,420 | 15,600 | 228,020 | 381,904 | 15,556 | 397,460 | |||||||||||||||||
Incentive income—GAAP | 165,719 | 3,271 | 168,990 | 50,105 | 7,372 | 57,477 | |||||||||||||||||
Adjustment to incentive income(2) | — | — | — | — | — | — | |||||||||||||||||
Incentive Income—Economic Income Basis—Non-GAAP | 165,719 | 3,271 | 168,990 | 50,105 | 7,372 | 57,477 | |||||||||||||||||
Other revenues—GAAP | 3,977 | 104 | 4,081 | 1,533 | 11 | 1,544 | |||||||||||||||||
Adjustment to other revenues(3) | (1,117 | ) | — | (1,117 | ) | — | — | — | |||||||||||||||
Other Revenues—Economic Income Basis—Non-GAAP | 2,860 | 104 | 2,964 | 1,533 | 11 | 1,544 | |||||||||||||||||
Total Revenues—Economic Income Basis—Non-GAAP | $ | 380,999 | $ | 18,975 | $ | 399,974 | $ | 433,542 | $ | 22,939 | $ | 456,481 |
(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 funds is also removed. |
(2) | Adjustment to exclude the impact of eliminations related to the consolidated funds. |
(3) | Adjustment to exclude realized gains on sale of fixed assets. |
Three Months Ended September 30, 2017 | Three Months Ended September 30, 2016 | ||||||||||||||||||||||
Oz Funds Segment | Other Operations | Total Company | Oz Funds Segment | Other Operations | Total Company | ||||||||||||||||||
(dollars in thousands) | |||||||||||||||||||||||
Compensation and benefits—GAAP | $ | 61,534 | $ | 12,956 | $ | 74,490 | $ | 51,990 | $ | 5,768 | $ | 57,758 | |||||||||||
Adjustment to compensation and benefits(1) | (23,034 | ) | (7,866 | ) | (30,900 | ) | (18,484 | ) | (3,330 | ) | (21,814 | ) | |||||||||||
Compensation and Benefits—Economic Income Basis—Non-GAAP | $ | 38,500 | $ | 5,090 | $ | 43,590 | $ | 33,506 | $ | 2,438 | $ | 35,944 | |||||||||||
Interest expense and general, administrative and other expenses—GAAP | $ | 38,190 | $ | 557 | $ | 38,747 | $ | 61,460 | $ | 794 | $ | 62,254 | |||||||||||
Adjustment to interest expense and general, administrative and other expenses(2) | (7,066 | ) | — | (7,066 | ) | (16,583 | ) | (189 | ) | (16,772 | ) | ||||||||||||
Non-Compensation Expenses—Economic Income Basis—Non-GAAP | $ | 31,124 | $ | 557 | $ | 31,681 | $ | 44,877 | $ | 605 | $ | 45,482 |
Nine Months Ended September 30, 2017 | Nine Months Ended September 30, 2016 | ||||||||||||||||||||||
Oz Funds Segment | Other Operations | Total Company | Oz Funds Segment | Other Operations | Total Company | ||||||||||||||||||
(dollars in thousands) | |||||||||||||||||||||||
Compensation and benefits—GAAP | $ | 184,084 | $ | 30,028 | $ | 214,112 | $ | 155,293 | $ | 14,469 | $ | 169,762 | |||||||||||
Adjustment to compensation and benefits(1) | (65,916 | ) | (15,141 | ) | (81,057 | ) | (56,689 | ) | (7,377 | ) | (64,066 | ) | |||||||||||
Compensation and Benefits—Economic Income Basis—Non-GAAP | $ | 118,168 | $ | 14,887 | $ | 133,055 | $ | 98,604 | $ | 7,092 | $ | 105,696 | |||||||||||
Interest expense and general, administrative and other expenses—GAAP | $ | 129,431 | $ | 1,841 | $ | 131,272 | $ | 610,496 | $ | 3,277 | $ | 613,773 | |||||||||||
Adjustment to interest expense and general, administrative and other expenses(2) | (24,489 | ) | — | (24,489 | ) | (45,746 | ) | (562 | ) | (46,308 | ) | ||||||||||||
Non-Compensation Expenses—Economic Income Basis—Non-GAAP | $ | 104,942 | $ | 1,841 | $ | 106,783 | $ | 564,750 | $ | 2,715 | $ | 567,465 |
(1) | Adjustment to exclude equity-based compensation, as management does not consider these non-cash expenses to be reflective of our 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. Further, expenses related to compensation and profit-sharing arrangements based on fund investment performance are generally recognized at the same time as the related incentive income revenue, 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 Group D Units are also excluded, as management reviews operating performance at the Oz Operating Group level, where our operations are performed, prior to making any income allocations. Further, deferred cash compensation is expensed in full in the year granted for Economic Income, rather than over the service period for GAAP. |
(2) | Adjustment to exclude depreciation, amortization and losses on fixed assets as management does not consider these items to be reflective of our operating performance. Additionally, recurring placement and related service fees are excluded, as management considers these fees a reduction in management fees, not an expense. |
Three Months Ended September 30, 2017 | Three Months Ended September 30, 2016 | ||||||||||||||||||||||
Oz Funds Segment | Other Operations | Total Company | Oz Funds Segment | Other Operations | Total Company | ||||||||||||||||||
(dollars in thousands) | |||||||||||||||||||||||
Net income attributable to noncontrolling interests—GAAP | $ | 9,442 | $ | 318 | $ | 9,760 | $ | 16,454 | $ | 116 | $ | 16,570 | |||||||||||
Adjustment to net income attributable to noncontrolling interests(1) | (9,444 | ) | (318 | ) | (9,762 | ) | (16,461 | ) | (116 | ) | (16,577 | ) | |||||||||||
Net Loss Attributable to Noncontrolling Interests—Economic Income Basis—Non-GAAP | $ | (2 | ) | $ | — | $ | (2 | ) | $ | (7 | ) | $ | — | $ | (7 | ) |
Nine Months Ended September 30, 2017 | Nine Months Ended September 30, 2016 | ||||||||||||||||||||||
Oz Funds Segment | Other Operations | Total Company | Oz Funds Segment | Other Operations | Total Company | ||||||||||||||||||
(dollars in thousands) | |||||||||||||||||||||||
Net income (loss) attributable to noncontrolling interests—GAAP | $ | 41,021 | $ | 659 | $ | 41,680 | $ | (187,213 | ) | $ | 346 | $ | (186,867 | ) | |||||||||
Adjustment to net income (loss) attributable to noncontrolling interests(1) | (41,023 | ) | (659 | ) | (41,682 | ) | 187,201 | (346 | ) | 186,855 | |||||||||||||
Net Loss Attributable to Noncontrolling Interests—Economic Income Basis—Non-GAAP | $ | (2 | ) | $ | — | $ | (2 | ) | $ | (12 | ) | $ | — | $ | (12 | ) |
(1) | Adjustment to exclude amounts allocated to our executive managing directors on their interests in the Oz Operating Group, as management reviews operating performance at the Oz Operating Group level. We conduct substantially all of our activities through the Oz Operating Group. Additionally, the impact of the consolidated funds, including the allocation of earnings to investors in those funds, is also removed. |
Exhibit No. | Description | |
101.INS | XBRL Instance Document | |
101.SCH | XBRL Taxonomy Extension Schema Document | |
101.CAL | XBRL Taxonomy Extension Calculation Linkbase Document | |
101.DEF | XBRL Taxonomy Extension Definition Linkbase Document | |
101.LAB | XBRL Taxonomy Extension Label Linkbase Document | |
101.PRE | XBRL Taxonomy Extension Presentation Linkbase Document |
OCH-ZIFF CAPITAL MANAGEMENT GROUP LLC | |||
By: | /s/ Alesia J. Haas | ||
Alesia J. Haas | |||
Chief Financial Officer and Executive Managing Director |
1. | I have reviewed this Quarterly Report on Form 10-Q of Och-Ziff Capital Management Group LLC; |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
4. | The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
a. | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
b. | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
c. | Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
d. | Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and |
5. | The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions): |
a. | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and |
b. | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting. |
Date: | November 2, 2017 | /s/ Daniel S. Och | ||
Name: | Daniel S. Och | |||
Title: | Chief Executive Officer and Executive Managing Director |
1. | I have reviewed this Quarterly Report on Form 10-Q of Och-Ziff Capital Management Group LLC; |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
4. | The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
a. | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
b. | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
c. | Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
d. | Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and |
5. | The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions): |
a. | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and |
b. | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting. |
Date: | November 2, 2017 | /s/ Alesia J. Haas | ||
Name: | Alesia J. Haas | |||
Title: | Chief Financial Officer and Executive Managing Director |
i. | The Form 10-Q fully complies with the requirements of Section 13(a) or Section 15(d) of the Securities Exchange Act of 1934 (15 U.S.C. 78m(a) or 78o(d)); and |
ii. | The information contained in the Form 10-Q fairly presents, in all material respects, the financial condition and results of operations of the Company. |
Date: | November 2, 2017 | /s/ Daniel S. Och | ||
Name: | Daniel S. Och | |||
Title: | Chief Executive Officer and Executive Managing Director | |||
Date: | November 2, 2017 | /s/ Alesia J. Haas | ||
Name: | Alesia J. Haas | |||
Title: | Chief Financial Officer and Executive Managing Director |
Document and Entity Information - shares |
9 Months Ended | |
---|---|---|
Sep. 30, 2017 |
Oct. 30, 2017 |
|
Document Information [Line Items] | ||
Document Type | 10-Q | |
Amendment Flag | false | |
Document Period End Date | Sep. 30, 2017 | |
Current Fiscal Year End Date | --12-31 | |
Document Fiscal Year Focus | 2017 | |
Document Fiscal Period Focus | Q3 | |
Trading Symbol | OZM | |
Entity Registrant Name | Och-Ziff Capital Management Group LLC | |
Entity Central Index Key | 0001403256 | |
Entity Filer Category | Large Accelerated Filer | |
Class A Shares | ||
Document Information [Line Items] | ||
Entity Common Stock, Shares Outstanding | 185,436,163 | |
Class B Shares | ||
Document Information [Line Items] | ||
Entity Common Stock, Shares Outstanding | 339,339,478 |
Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands |
Sep. 30, 2017 |
Dec. 31, 2016 |
---|---|---|
Investments measured at fair value | $ 289,585 | $ 21,341 |
Other liabilities, at fair value | $ 0 | $ 8,204 |
Class A Shares | ||
Common stock, no par value (in dollars per share) | $ 0 | $ 0 |
Common stock, shares authorized | 1,000,000,000 | 1,000,000,000 |
Common stock, shares issued | 185,312,439 | 184,843,255 |
Common stock, shares outstanding | 185,312,439 | 184,843,255 |
Class B Shares | ||
Common stock, no par value (in dollars per share) | $ 0 | $ 0 |
Common stock, shares authorized | 750,000,000 | 750,000,000 |
Common stock, shares issued | 339,339,478 | 297,317,019 |
Common stock, shares outstanding | 339,339,478 | 297,317,019 |
Overview |
9 Months Ended |
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Sep. 30, 2017 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Overview | OVERVIEW Och-Ziff Capital Management Group LLC (the “Registrant”), a Delaware limited liability company, together with its consolidated subsidiaries (collectively, the “Company”), is a global alternative asset management firm with offices in New York, London, Hong Kong, Mumbai, Beijing, Shanghai and Houston. The Company provides asset management services to its investment funds (the “funds”), which pursue a broad range of global investment opportunities. The Company currently manages multi-strategy funds, dedicated credit funds, including opportunistic credit funds and Institutional Credit Strategies products, real estate funds and other alternative investment vehicles. Through Institutional Credit Strategies, the Company’s asset management platform that invests in performing credits, the Company manages collateralized loan obligations (“CLOs”) and other customized solutions for its clients. The Company’s primary sources of revenues are management fees, which are based on the amount of the Company’s assets under management, and incentive income, which is based on the investment performance of the funds. Accordingly, for any given period, the Company’s revenues will be driven by the combination of assets under management and the investment performance of the funds. The Company currently has two operating segments: the Oz Funds segment and the Company’s real estate business. The Oz Funds segment is currently the Company’s only reportable operating segment under U.S. generally accepted accounting principles (“GAAP”) and provides asset management services to the Company’s multi-strategy funds, dedicated credit funds and other alternative investment vehicles. The Company’s real estate business, which provides asset management services to its real estate funds, is included within Other Operations, as it does not meet the threshold of a reportable operating segment under GAAP. The Company generates substantially all of its revenues in the United States. The liability of the Company’s Class A Shareholders is limited to the extent of their capital contributions. The Company conducts its operations through OZ Management LP, OZ Advisors LP and OZ Advisors II LP (collectively, the “Oz Operating Partnerships,” and collectively with their consolidated subsidiaries, the “Oz Operating Group”). References to the Company’s “executive managing directors” refer to the current limited partners of the Oz Operating Partnerships other than the Company’s intermediate holding companies, and include the Company’s founder, Daniel S. Och, and, except where the context requires otherwise, include certain limited partners who are no longer active in the business of the Company. References to the Company’s “active executive managing directors” refer to executive managing directors who remain active in the Company’s business. References to the “Ziffs” refer collectively to Ziff Investors Partnership, L.P. II and certain of its affiliates and control persons. References to the Company’s “intermediate holding companies” refer, collectively, to Och-Ziff Holding Corporation (“Oz Corp”) and Och-Ziff Holding LLC, both of which are wholly owned subsidiaries of the Registrant. |
Basis of Presentation and Summary of Significant Accounting Policies |
9 Months Ended |
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Sep. 30, 2017 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis of Presentation and Significant Accounting Policies | BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Basis of Presentation These unaudited, interim, consolidated financial statements are prepared in accordance with GAAP as set forth in the Financial Accounting Standards Board’s (“FASB”) Accounting Standards Codification (“ASC”), and should be read in conjunction with the audited consolidated financial statements included in the Company’s annual report on Form 10-K for the year ended December 31, 2016 (the “Annual Report”). In the opinion of management, all adjustments considered necessary for a fair presentation of the Company’s unaudited, interim, consolidated financial statements have been included and are of a normal and recurring nature. The results of operations presented for the interim periods are not necessarily indicative of the results that may be expected for any other interim period or for the entire year, primarily because of the majority of incentive income and actual amounts of discretionary cash bonuses being recorded in the fourth quarter each year. All significant intercompany transactions and balances have been eliminated in consolidation. Interim Accrual of Annual Discretionary Cash Bonus In the first quarter of 2017, the Company decided to provide a minimum annual discretionary cash bonus. As a result of this decision, the Company accrues the minimum annual discretionary cash bonus on a straight-line basis during the year. The total amount of discretionary cash bonuses ultimately recognized for the full year, which is determined in the fourth quarter of each year, could differ materially from the minimum amount accrued, as the total discretionary cash bonus is dependent upon a variety of factors, including fund performance for the year. Reclassifications The Company has reclassified the changes in tax receivable agreement liability from general, administrative and other expenses to other income (loss) in the consolidated statements of comprehensive income (loss). The Company also reclassified its investments in funds, joint ventures and United States government obligations from other assets, net to investments in the Company’s consolidated balance sheets. These reclassifications had no impact on the Company’s financial position or results of operations, and prior period amounts have been reclassified to conform to the current year presentation. Recently Adopted Accounting Pronouncements In March 2016, the FASB issued Accounting Standards Update (“ASU”) 2016-09, Improvements to Employee Share-Based Payment Accounting. The requirements of ASU 2016-09 were effective for the Company beginning in the first quarter of 2017. As permitted under the new guidance, the Company has made an accounting policy election to account for forfeitures on share-based compensation arrangements as they occur. Prior to the adoption of ASU 2016-09, the Company was required to estimate forfeitures. The decision to no longer estimate forfeitures was not material to the financial statements. Additionally, the Company will recognize all income tax effects of awards within consolidated and comprehensive net income when the awards vest or are settled. Prior to the adoption of ASU 2016-09, excess tax benefits were recorded to paid-in capital, while tax deficiencies were recorded in consolidated and comprehensive net income to the extent in excess of previously recorded excess tax benefits. The amendments related to the recognition of excess tax benefits and tax deficiencies in the statement of comprehensive income were applied prospectively. In October 2016, the FASB issued ASU 2016-17, Consolidation (Topic 810): Interests Held through Related Parties that Are under Common Control. The guidance was effective for the Company beginning in the first quarter of 2017. ASU 2016-17 amended the consolidation guidance with respect to a single decision maker’s evaluation of interests held through related parties that are under common control when it is determining whether it is the primary beneficiary of a variable interest entity (“VIE”). Under the amended guidance, a reporting entity considers its indirect economic interests in a VIE held through related parties that are under common control on a proportionate basis, consistent with the way it would evaluate its indirect economic interests held through related parties that are not under common control. The adoption of ASU 2016-17 did not have a material impact on the Company’s consolidated financial statements. None of the other changes to GAAP that went into effect in the nine months ended September 30, 2017 has had a material effect on the Company’s consolidated financial statements. Future Adoption of Accounting Pronouncements In May 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers. ASU 2014-09 supersedes the revenue recognition requirements in ASC 605-Revenue Recognition and most industry-specific revenue recognition guidance throughout the ASC. The core principle of the guidance is that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. The Company is in the process of implementing the new revenue guidance and is continuing to evaluate the effect the ASU will have on its consolidated financial statements, including, whether the Company: (a) will be required to recognize incentive income earlier than as prescribed under current guidance, (b) should present certain revenue streams on a gross or net basis depending on whether it is identified as principal or agent in a transaction where the standard’s core principle is one of control and not risks and rewards, as is the case with the current guidance, and (c) whether certain costs associated with business development and deal origination, which are currently recognized as an expense as incurred, should be initially deferred and subsequently recognized as an expense over a specified period. The ASU also introduces new qualitative and quantitative disclosure requirements and requires disaggregation of revenue information beyond that which is currently required, that will significantly impact the information presented in the notes to the Company’s consolidated financial statements. The Company expects to adopt ASU 2014-09 using a modified retrospective application approach in the first quarter of 2018. In February 2016, the FASB issued ASU 2016-02, Leases. ASU 2016-02 significantly changes accounting for lease arrangements, in particular from the perspective of the lessee. The Company is not currently a lessor in any significant lease arrangements, but is a lessee in several lease arrangements that would be impacted by the ASU. The Company has determined that most of its operating leases will be reported as lease obligations, along with offsetting right to use assets on its consolidated balance sheet at their present value, and will continue to recognize associated expenses within consolidated net income (loss) in a manner similar to the existing accounting for leases (i.e., on a straight-line basis over the lease term). Entities are required to use a modified retrospective approach for leases that exist or are entered into after the beginning of the earliest comparative period in the financial statements. The requirements of ASU 2016-02 are effective for the Company beginning in the first quarter of 2019. See Note 17 of the Company’s Annual Report for details related to the Company’s existing operating lease obligations. None of the other changes to GAAP that are not yet effective are expected to have a material effect on the Company’s consolidated financial statements. |
Noncontrolling Interests |
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Noncontrolling Interest [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Noncontrolling Interests | NONCONTROLLING INTERESTS AND OZ OPERATING GROUP OWNERSHIP Noncontrolling interests represent ownership interests in the Company’s subsidiaries held by parties other than the Company, and primarily relate to the Group A Units held by the Company’s executive managing directors and fund investors’ interests in the consolidated funds. Net income (loss) attributable to the Group A Units is driven by the earnings (losses) of the Oz Operating Group. Net income attributable to fund investors’ interests in consolidated funds is driven by the earnings of those funds. The following table presents the components of the net income (loss) attributable to noncontrolling interests:
The following table presents the components of the shareholders’ equity attributable to noncontrolling interests:
The Preferred Units and fund investors’ interests in certain consolidated funds are redeemable outside of the Company’s control. These interests are classified within redeemable noncontrolling interests in the consolidated balance sheets. The following table presents the activity in redeemable noncontrolling interests:
Oz Operating Group Ownership The Company’s equity interest in the Oz Operating Group increased to 40.9% as of September 30, 2017, from 38.3% as of December 31, 2016, (excluding Group P Units, as they are not yet participating in the economics of the Oz Operating Group). Changes in the Company’s interest in the Oz Operating Group have historically been, and in the future may be, driven by the following: (i) the exchange of Group A Units and Group P Units for an equal number of Class A Shares, at which time the related Class B Shares are also canceled; (ii) the issuance of Class A Shares under the Company’s Amended and Restated 2007 Equity Incentive Plan and 2013 Incentive Plan related to the settlement of RSUs; (iii) the forfeiture of Group A Units and Group P Units by a departing executive managing director; and (iv) the repurchase of Class A Shares and Group A Units. The Company’s interest in the Oz Operating Group is expected to continue to increase over time as additional Class A Shares are issued upon the exchange of Group A Units and Group P Units, as well as the settlement of vested RSUs. These increases will be offset upon any conversion by an executive managing director of Group D Units, which are not considered equity for GAAP purposes, into Group A Units, at which time an equal number of Class B Shares is also issued to the executive managing director. Additionally, the Company’s interest in the Oz Operating Group will decline when Group P Units begin to participate as described below. Group P Units, 2017 Incentive Program and Limited Partnership Agreements Amendments On February 13, 2017, the Company’s board of directors approved the Och-Ziff Capital Management Group LLC 2017 Incentive Program (the “2017 Incentive Program”). Under the terms of the 2017 Incentive Program, the Company granted Group P Units (an “Incentive Award”) to certain executive managing directors. One Class P common unit in each Oz Operating Partnership, collectively, is referred to as a “Group P Unit.” The Company granted 71.9 million Group P Units in March 2017, at the average fair value of $1.25 per unit. The fair value was determined using the Monte-Carlo simulation valuation model, with the following assumptions: volatility of 35.7%, dividend rate of 10.0%, and risk-free discount rate of 2.2%. The requisite service period for these Incentive Awards was estimated to be 3.9 years at the time of the grant. As of September 30, 2017, there were 71.9 million Group P Units outstanding and total unrecognized stock-based compensation expense related to unvested awards was $75.3 million. A grant of Group P Units will conditionally vest upon the applicable executive managing directors satisfying a service condition (the “Service Condition”) and certain market performance-based targets, expressed as percentages (the “Performance Condition”) being satisfied, as follows: 20% of Units vest upon a Performance Condition of 25% being achieved (i.e., total shareholder return from the contractually determined reference price of $3.21); an additional 40% (for a total of 60%) of Units vest upon a Performance Condition of 50% being achieved; an additional 20% (for a total of 80%) of Units vest upon a Performance Condition of 75% being achieved; and an additional 20% (for a total of 100%) of the Units vest upon a Performance Condition of 125% being achieved. Achievement of the applicable Performance Conditions earlier than estimated can materially affect the amount of equity-based compensation expense recognized by the Company in any given period. Executive managing directors will be entitled to receive distributions on their Group P Units only after satisfaction of the Service Condition and the Performance Condition, from which time the executive managing director will be entitled to receive the same distributions per Unit on each Group P Unit as holders of Group A Units and Group D Units. If a holder of an Incentive Award has not satisfied both the Service Condition and the applicable Performance Condition has not been met with respect to the units comprising such Incentive Award by the sixth anniversary of the respective grant date, such units will be forfeited and canceled immediately. Upon satisfaction of the Service Condition and the Performance Condition, Group P Units may be exchanged at the executive managing director’s discretion for Class A Shares (or the cash value thereof, as determined by the Board) provided that sufficient Appreciation (as defined in the Limited Partnership Agreements) has occurred for each Group P Unit to have become economically equivalent to a Group A Unit. Upon the exchange of a Group P Unit for a Class A Share (or the cash equivalent), the exchanging executive managing director will have a right to potential future payments owed to him or her under the tax receivable agreement. Effective March 1, 2017, the Board of Directors approved amendments to the Limited Partnership Agreements of the Oz Operating Partnerships that, in addition to the events discussed above, adjust the measurement thresholds used in determining whether sufficient Appreciation has taken place for Group D Units issued prior to March 1, 2017, to have become economically equivalent to Group A Units. This amendment makes it more likely that outstanding Group D Units will convert to Group A Units. On May 9, 2017, upon approval by the Company’s shareholders of the amendment to the 2013 Incentive Plan, each holder of Group P Units received a number of Class B Shares equal to the number of Group P Units held. One Class B Share will be canceled for each Class A Share issued upon the exchange of a Group P Unit. Relinquishment of Group A Units Oz Corp and Oz Holding, as the general partners of the Oz Operating Partnerships, entered into a Relinquishment Agreement with Daniel S. Och and certain family trusts over which Mr. Och has investment control (the “Och Trusts”) effective as of March 1, 2017 (the “Relinquishment Agreement”). Pursuant to the Relinquishment Agreement, Mr. Och and the Och Trusts agreed to cancel, in the aggregate, 30.0 million of their vested Group A Units. The Relinquishment Agreement provides that if any of the Group D Units granted to James S. Levin on March 1, 2017 are forfeited, such forfeited units (up to an aggregate amount of 30.0 million) shall be reallocated to Mr. Och and the Och Trusts pursuant to the terms of the Limited Partnership Agreements. The Company accounted for the transaction as a repurchase of Group A Units for no consideration. A corresponding number of Class B Shares were also canceled. Dilution of Proceeds from Tax Receivable Agreement Waiver In September 2016, the Company amended the tax receivable agreement to provide that no amounts will be due or payable under the tax receivable agreement by Oz Corp, one of the Company’s wholly owned intermediate holding companies, with respect to the 2015 and 2016 taxable years. During the first quarter of 2017, Oz Corp contributed to the Oz Operating Group the cash previously set aside for such payments, which resulted in a reallocation of such contribution between the Company’s paid-in capital and the paid-in capital of the Group A Units (including within noncontrolling interests). |
Investments and Fair Value Disclosures |
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Fair Value Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value Disclosures | INVESTMENTS AND FAIR VALUE DISCLOSURES The following table presents the components of the Company’s investments as reported in the consolidated balance sheets:
_______________ (1) Held by the Oz Operating Group and of which $99.8 million mature on December 21, 2017 and $12.9 million mature on March 1, 2018. Fair Value Disclosures Fair value represents the price that would be received upon the sale of an asset or paid to transfer a liability in an orderly transaction between market participants as of the measurement date (i.e., an exit price). Due to the inherent uncertainty of valuations of investments that are determined to be illiquid or do not have readily ascertainable fair values, the estimates of fair value may differ from the values ultimately realized, and those differences can be material. GAAP prioritizes the level of market price observability used in measuring assets and liabilities at fair value. Market price observability is impacted by a number of factors, including the type of assets and liabilities and the specific characteristics of the assets and liabilities. Assets and liabilities with readily available, actively quoted prices or for which fair value can be measured from actively-quoted prices generally will have a higher degree of market price observability and lesser degree of judgment used in measuring fair value. Assets and liabilities measured at fair value are classified into one of the following categories:
In certain cases, the inputs used to measure fair value may fall into different levels of the fair value hierarchy. In such cases, an asset or liability’s level within the fair value hierarchy is based on the lowest level of input that is significant to the fair value measurement. The assessment of the significance of a particular input to the fair value measurement in its entirety requires judgment and considers factors specific to the asset or liability. Fair Value Measurements Categorized within the Fair Value Hierarchy The following table summarizes the Company’s investments including assets and liabilities measured at fair value on a recurring basis within the fair value hierarchy as of September 30, 2017:
_______________ (1) As of September 30, 2017, investments in CLOs had contractual principal amounts of $176.6 million outstanding. The following table summarizes assets and liabilities measured at fair value on a recurring basis within the fair value hierarchy as of December 31, 2016:
_______________ (1) As of December 31, 2016, investment in CLO had contractual principal amounts of $21.3 million outstanding. Reconciliation of Fair Value Measurements Categorized within Level III The Company assumes that any transfers between Level I, Level II or Level III occur at the beginning of the reporting period presented. Gains and losses, excluding those of the consolidated funds are recorded within net gains on investments in funds and joint ventures in the consolidated statements of comprehensive income (loss), and gains and losses of the consolidated funds are recorded within net gains (losses) of consolidated funds. Amounts related to the deconsolidation of the Company’s funds upon the adoption of ASU 2015-02 on January 1, 2016, and deconsolidation of the CLO in the third quarter of 2017 are included within investment sales. Amounts related to the initial consolidation of the CLO in the second quarter of 2017 are included within investment purchases. The following tables summarize the changes in the Company’s Level III assets and liabilities for the three months ended September 30, 2017:
The following tables summarize the changes in the Company’s Level III assets for the three months ended September 30, 2016:
The following tables summarize the changes in the Company’s Level III assets and liabilities for the nine months ended September 30, 2017:
The following table summarizes the changes in the Company’s Level III assets for the nine months ended September 30, 2016:
Transfers out of Level III presented in the tables above resulted from the fair values of certain securities becoming market observable, with fair value determined using independent pricing services. Transfers into Level III presented in the table above resulted from the valuation of certain investments with decreased market observability, with fair values determined using broker quotes or independent pricing services. There were no transfers between Levels I and II during the periods presented above. The table below summarizes the net change in unrealized gains and losses on the Company’s Level III assets and liabilities held as of the reporting date. These gains and losses are included within net gains of consolidated funds in the Company’s consolidated statements of comprehensive income (loss):
Valuation Methodologies for Fair Value Measurements Categorized within Levels II and III Investments in CLOs and bank debt are valued using independent pricing services and thus there are no unobservable valuation inputs used in determining their fair value to disclose. For valuation methodologies of investments that were deconsolidated on January 1, 2016, please refer to the Company’s Annual Report. The Company elected to measure its investments in CLOs at fair value through consolidated net income (loss) in order to simplify its accounting for these instruments. Changes in fair value of these investments are included within net gains on investments in funds and joint ventures in the consolidated statements of comprehensive income (loss). The Company accrues interest income on its investments in CLOs using the effective interest method. As further discussed in Note 6, the Company consolidated a CLO warehouse vehicle beginning in the second quarter of 2017, which was then deconsolidated during the third quarter of 2017. The Company elected to measure the debt obligations of the consolidated CLO at fair value through consolidated net income (loss) in order to mitigate the accounting mismatch between the carrying values of the assets and liabilities of the consolidated CLO. For the period the CLO was consolidated, changes in fair value of these assets and liabilities were included within net gains (losses) of consolidated funds in the consolidated statements of comprehensive income (loss). The Company accrued interest income and interest expense of the consolidated CLO using the effective interest method. Valuation Process for Fair Value Measurements Categorized within Level III The Company has established a Valuation Committee to provide oversight of the monthly valuation results of the investments held by the Company and the funds. The Valuation Committee has assigned the responsibility of performing price verification and related quality controls in accordance with the Valuation Policy to the Valuation Controls Group. The Valuation Controls Group performs price verification procedures on all of the investments which include, but are not limited to the following: reviewing independent pricing provided by third-party valuation vendors, reviewing and collecting broker quotes and reviewing valuation models. The Valuation Controls Group performs additional quality controls to support valuation techniques including but not limited to: back testing, stale pricing reviews, and vendor due diligence. When pricing or verification sources cannot be obtained from external sources or if external prices are deemed unreliable, additional procedures are performed by the Valuation Controls Group, which may include comparing unobservable inputs to observable inputs for similar positions, reviewing subsequent market activities, performing comparisons of actual versus projected performance indicators, and reviewing the valuation methodology and key inputs. Independent third party valuation firms may be used to corroborate internal valuations. Fair Value of Other Financial Instruments Management estimates that the carrying value of the Company’s other financial instruments, including its debt obligations, approximated their fair values as of September 30, 2017. The Senior Notes are categorized as Level II and the CLO Investments Loans (as defined in Note 9) are categorized as Level III within the fair value hierarchy. The fair value of the Senior Notes and the CLO Investments Loans were determined using independent pricing services. Assets Measured at Fair Value on a Non-Recurring Basis As of December 31, 2016, the Company measured its aircraft held for sale at fair value, less cost to sell, and loans held for sale at fair value. See Note 7 for the carrying values of these assets. These non-recurring fair value measurements are categorized as Level III for the aircraft and Level II for the loans held for sale. The fair value for the aircraft was determined using recent market sales for comparable aircraft and bids received, and the Company assessed whether recent bids were supportive of transactions seen in recent sales for similar aircraft. The fair value for the loans held for sale was determined using independent pricing services. During the nine months ended September 30, 2017, the Company sold its aircraft and loans held for sale. |
Transfers of Financial Assets |
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Sep. 30, 2017 | |
Transfers and Servicing of Financial Assets [Abstract] | |
Transfers of Financial Assets | TRANSFERS OF FINANCIAL ASSETS Investments in CLOs and Related Transactions During the nine months ended September 30, 2017, the Company sold $45.6 million of loans to CLOs managed by the Company. These loans were previously purchased by the Company in the open market, and were sold for cash at cost to the CLOs. The loans were accounted for as transfers of financial assets and met the criteria for derecognition under GAAP. As of September 30, 2017 and December 31, 2016, the outstanding principal amount on the loans that have been sold to the CLOs was $61.0 million and $19.7 million, respectively. As of September 30, 2017, there were no delinquencies or credit losses related to the loans sold. The Company invests in senior secured and subordinated notes issued by CLOs to which it sold the loans discussed above. These investments represent retained interests to the Company and are in the form of a 5% vertical strip (i.e., 5% of each of the senior and subordinated tranches of notes issues by each CLO) in order to comply with recently enacted risk retention rules in the U.S. and Europe. The retained interests are reported within investments on the Company’s consolidated balance sheet (see Note 4). In the nine months ended September 30, 2017 and in the year ended December 31, 2016, the Company made investments of $45.4 million and $21.5 million, respectively, related to these retained interests. As of September 30, 2017 and December 31, 2016, the Company’s investments in these retained interests had a fair value of $69.6 million and $21.3 million, respectively. The Company is subject to risks associated with the performance of the underlying collateral and the market yield of the assets. The Company’s risk of loss from retained interest is limited to its investments in these interests. The Company receives quarterly payments of interests and principal, as applicable, on these retained interests. In the three and nine months ended September 30, 2017, the Company received $474 thousand of interest payments related to the retained interests. The Company uses independent pricing services to value its investments in the CLOs, and therefore the only key assumption is the price provided by such service. A corresponding adverse change of 10% or 20% on price would have a corresponding impact on the fair value of the Company’s investments in CLOs. |
Variable Interest Entities |
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Organization, Consolidation and Presentation of Financial Statements [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Variable Interest Entities | VARIABLE INTEREST ENTITIES In the ordinary course of business, the Company sponsors the formation of funds that are considered VIEs. See Note 2 of the Company’s Annual Report for a discussion of entities that are VIEs and the evaluation of those entities for consolidation by the Company. In the second quarter of 2017, the Company consolidated one of the CLOs it manages as a result of increasing its investment in the vehicle, which provided the Company with a controlling financial interest in the VIE. In the third quarter of 2017, the CLO issued notes to investors and as a result the Company’s interest in the CLO was limited to a 5% risk retention investment. Due to the reconsideration event, the Company deconsolidated the CLO in the third quarter of 2017. No gains or losses were recognized as a result of the deconsolidation. The table below presents the assets and liabilities of VIEs consolidated by the Company:
The assets presented in the table above belong to the investors in those funds, are available for use only by the fund to which they belong, and are not available for use by the Company. The consolidated funds have no recourse to the general credit of the Company with respect to any liability. The Company’s direct involvement with funds that are VIEs and not consolidated by the Company is generally limited to providing asset management services and, in certain cases, direct investments in the VIEs. The maximum exposure to loss represents the potential loss of current investments or income and fees receivables from these entities, as well as the obligation to repay unearned revenues, primarily incentive income subject to clawback, in the event of any future fund losses. The Company has commitments to certain funds that are VIEs as discussed in Note 15. The Company does not provide, nor is it required to provide, any type of non-contractual financial or other support to its VIEs that are not consolidated. The table below presents the net assets of VIEs in which the Company has variable interests:
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Other Assets, Net |
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Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Other Assets, Net | OTHER ASSETS, NET The following table presents the components of other assets, net as reported in the consolidated balance sheets:
During the first half of 2017, the Company sold its corporate aircraft for $57.6 million. As a result, the Company recognized a net gain on sale of $1.3 million in the period. The gain is included within other revenues in the consolidated statements of comprehensive income (loss). |
Other Liabilities |
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Other Liabilities Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Other Liabilities | OTHER LIABILITIES The following table presents the components of other liabilities as reported in the consolidated balance sheets:
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Debt Obligations |
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Debt Instruments [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Debt Obligations | DEBT OBLIGATIONS As of September 30, 2017, the Company’s outstanding indebtedness was primarily comprised of senior notes (the “Senior Notes”) and secured loans to finance the purchase of the Company’s investments in CLOs (“CLO Investments Loans”). Senior Notes On November 20, 2014, the Company issued $400.0 million of Senior Notes due November 20, 2019, unless earlier redeemed or repurchased. The Senior Notes were issued at a price of 99.417% of the aggregate principal amount and bear interest at a rate per annum of 4.50% payable semiannually in arrears. The Senior Notes are unsecured and unsubordinated obligations issued by a subsidiary of the Company, Och-Ziff Finance Co. LLC (“Och-Ziff Finance”), and are fully and unconditionally guaranteed, jointly and severally, on an unsecured and unsubordinated basis by OZ Management LP, OZ Advisors LP and OZ Advisors II LP (collectively, the “Senior Notes Guarantors”). The Senior Notes may be redeemed from time to time at the Company’s option, in whole or in part, at a redemption price equal to the greater of 100% of the principal amount to be redeemed and a make-whole redemption price (as defined in the Senior Notes indenture), in either case, plus any accrued and unpaid interest. If a change of control repurchase event occurs, the Company will be required to offer to repurchase the Senior Notes at a price equal to 101% of the aggregate principal amount, plus any accrued and unpaid interest. The Senior Notes do not have any financial maintenance covenants. However, the Senior Notes include certain covenants, including limitations on Och-Ziff Finance’s and, as applicable, the Senior Notes Guarantors’ ability to, subject to exceptions, incur indebtedness secured by liens on voting stock or profit participating equity interests of their respective subsidiaries or merge, consolidate or sell, transfer or lease all or substantially all assets. The Senior Notes also provide for customary events of default, bankruptcy, insolvency or reorganization that may cause the Senior Notes to become immediately due and payable, plus any accrued and unpaid interest. Revolving Credit Facility On November 20, 2014, the Company entered into a $150.0 million, 5-year unsecured Revolving Credit Facility, which was subsequently amended on December 29, 2015 and on June 13, 2017, the proceeds of which may be used for working capital, general corporate purposes or other liquidity needs. The facility matures on November 20, 2019. The borrower under the Revolving Credit Facility is OZ Management LP and the facility is guaranteed by OZ Advisors LP, OZ Advisors II LP and Och-Ziff Finance. The Company is able to increase the maximum amount of credit available under the facility to $225.0 million if certain conditions are satisfied. The Company is subject to a fee of 0.10% to 0.25% per annum on undrawn commitments during the term of the Revolving Credit Facility. Outstanding borrowings will bear interest at a rate per annum of LIBOR plus 1.00% to 2.00%, or a base rate plus 0% to 1.00%. The commitment fees and the spreads over LIBOR or the base rate are based on OZ Management LP’s credit rating throughout the term of the facility. As of September 30, 2017, the current rates for borrowings would be LIBOR plus 2.00%, and the undrawn commitment fee was 0.25%. In March 2017, the Company repaid its outstanding obligation under the Revolving Credit Facility in full, and as a result has $150.0 million available under the facility as of September 30, 2017. The Revolving Credit Facility includes two financial maintenance covenants. The first covenant prohibits total fee-paying assets under management as of the last day of any fiscal quarter to be less than $22.0 billion for two successive quarters. The second covenant prohibits the economic income leverage ratio (as defined in the Revolving Credit Facility) from exceeding: (i) 4.00 to 1.00 for each fiscal quarter ending on or prior to December 31, 2017; (ii) 3.50 to 1.00 for each fiscal quarter ending on or after March 31, 2018 but on or prior to December 31, 2018; and (iii) 3.00 to 1.00 for each fiscal quarter ending on or after March 31, 2019. As of September 30, 2017, the Company was in compliance with the financial maintenance covenants. The Revolving Credit Facility allows a limited right to cure an event of default resulting from noncompliance with the economic income leverage ratio test with an equity contribution made to the borrower, OZ Management LP. Such cure right may not be used more than two times in any four-quarter period or more than three times during the term of the facility. The Revolving Credit Facility includes provisions that restrict or limit, among other things, the ability of the Oz Operating Group from:
The Revolving Credit Facility permits the Oz Operating Group to incur, among other things, up to $150.0 million of indebtedness, up to an additional $400.0 million of indebtedness for financing of investments in CLOs in order to comply with risk retention regulatory requirements, and additional indebtedness so long as, after giving effect to the incurrence of such indebtedness, it is in compliance with an economic income leverage ratio as described above and no default or event of default has occurred and is continuing. The facility also permits the Oz Operating Group to create liens to, among other things, secure indebtedness related to financing of CLO risk retention investments, as described above, as well as other indebtedness and obligations of up to $50.0 million. Aircraft Loan In February 2014, the Company entered into the Aircraft Loan to finance installment payments towards the purchase of a corporate aircraft. In March 2017, the Company sold the aircraft and repaid the outstanding principal balance in the amount of $46.4 million. CLO Investments Loans The Company enters into loans to finance portions of its investments in CLOs (collectively “the CLO Investments Loans”). These loans are collateralized by the investments in CLOs held by the Company. In general, the Company will make interest and principal payments on the loans at such time interest payments are received on its investments in the CLOs, and will make principal payments on the loans to the extent principal payments are received on its investments in the CLOs, with any remaining balance due upon maturity. The loans are subject to customary events of default and covenants and includes terms that require the Company’s continued involvement with the CLOs. The table below presents information related to CLO Investments Loans as of September 30, 2017. Carrying values presented below are net of discounts, if any, and unamortized deferred financing costs. The maturity date for each CLO Investments Loan is the earlier of the final maturity date presented in the table below or at such a time when the Company no longer holds a risk retention investment in the respective CLO.
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Preferred Units |
9 Months Ended |
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Sep. 30, 2017 | |
Temporary Equity Disclosure [Abstract] | |
Preferred Units | PREFERRED UNITS Pursuant to a securities purchase agreement, dated September 29, 2016 (the “Purchase Agreement”), certain of the Company’s executive managing directors, including Daniel S. Och (the “EMD Purchasers”), agreed to purchase up to a total of 400,000 Preferred Units for an aggregate amount of up to $400.0 million. On October 5, 2016, the Company completed a $250.0 million issuance and sale of 250,000 Preferred Units. On January 23, 2017, the Company completed an additional $150.0 million issuance and sale of 150,000 Preferred Units. As of September 30, 2017, 400,000 Preferred Units remained issued and outstanding. Distributions on the Preferred Units are payable on the liquidation preference amount and on a cumulative basis at an initial distribution rate of 0% per annum until February 19, 2020 (the “Step-up Date”), after which the distribution rate will increase in stages thereafter to a maximum of 10% per annum on and after the eighth anniversary of the Step-up Date. Subject to certain exceptions, unless distributions on the Preferred Units are declared and paid in cash for the then current distribution period and all preceding periods after the initial closing, the Oz Operating Partnerships may not declare or pay distributions on or repurchase any of their equity securities that rank equal with or junior to the Preferred Units. Following the occurrence of a change of control event, the Oz Operating Partnerships will redeem the Preferred Units at a redemption price equal to the liquidation preference plus all accumulated but unpaid distributions (collectively, the “liquidation value”). For so long as the Oz Operating Partnerships do not redeem all of the outstanding Preferred Units, the distribution rate will increase by 7% per annum, beginning on the 31st day following such change in control. The Oz Operating Partnerships will not be required to effect such redemption until the earlier of (i) 91 days after the maturity date of the Revolving Credit Facility and (ii) the payment in full of all loans and other obligations and the termination of all commitments thereunder. The Oz Operating Partnerships may, at their option, redeem the Preferred Units at a price equal to: (i) 105% of the liquidation value until the day immediately prior to the Step-up Date; (ii) 103% of the liquidation value thereafter until the day immediately prior to the first anniversary of the Step-up Date; (iii) 101% of the liquidation value thereafter until the day immediately prior to the second anniversary of the Step-up Date; and (iv) thereafter at a price equal to the liquidation value. In addition, from and after March 31, 2020, if the amounts that were distributed to partners of the Oz Operating Partnerships in respect of their equity interests in the Oz Operating Partnerships (other than amounts distributed in respect of tax distributions or certain other distributions) or utilized for repurchase of units by such entities (or which were available but not used for such purposes) for the immediately preceding fiscal year were in excess of $100 million in the aggregate, then an amount equal to 20% of such excess shall be utilized to redeem Preferred Units on a pro rata basis for an amount equal to the liquidation value. Furthermore, if the average closing price of the Company’s Class A Shares exceeds $15.00 per share for the previous 20 trading days, the Oz Operating Partnerships have agreed to use their reasonable best efforts to redeem all of the outstanding Preferred Units as promptly as practicable. If such event occurs prior to February 19, 2020, the Company has agreed to use its reasonable best efforts to obtain consents from its lenders in order to redeem the Preferred Units as promptly as practicable. Although the Preferred Units do not have voting rights, the consent of the holders’ committee, which initially consists of Daniel S. Och as sole member, is required to effect (i) any amendment to or waiver of the terms of the Preferred Units or (ii) any amendment to the limited partnership agreements of the Oz Operating Partnerships that would have an adverse effect on any holder of the Preferred Units. Under the terms of the Preferred Units, the Oz Operating Partnerships are prohibited from issuing any equity securities (or any debt or other securities convertible into equity securities of such entity) that rank equally with, or senior to, the Preferred Units, without the prior written consent of the holders’ committee. |
Income Taxes |
9 Months Ended |
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Sep. 30, 2017 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | INCOME TAXES The computation of the effective tax rate and provision at each interim period requires the use of certain estimates and significant judgment including, but not limited to, the expected operating income for the year, projections of the proportion of income earned and taxed in foreign jurisdictions, permanent differences, and the likelihood of recovering deferred tax assets existing as of the balance sheet date. The estimates used to compute the provision for income taxes may change as new events occur, additional information is obtained or as tax laws and regulations change. Additionally, the amount of incentive income and discretionary cash bonuses recorded in any given quarter can have a significant impact on the Company’s effective tax rate. Accordingly, the effective tax rate for interim periods is not indicative of the tax rate expected for a full year. The Registrant and each of the Oz Operating Partnerships are partnerships for U.S. federal income tax purposes. Due to the Company’s legal structure, only a portion of the income earned by the Company is subject to corporate-level tax rates in the United States and in foreign jurisdictions. The provision for income taxes includes federal, state and local taxes in the United States and foreign taxes at an approximate effective tax rate of 10.9% and 24.1% for the three months ended September 30, 2017 and 2016, respectively, and 23.1% and -14.1% for the nine months ended September 30, 2017 and 2016, respectively. The reconciling items from the Company’s statutory rate to the effective tax rate were driven primarily by the following: (i) a portion of the Company’s consolidated net income is not subject to federal, state and local corporate income taxes in the United States, as these amounts are allocated to the executive managing directors on their Group A Units or to fund investors in the Company’s consolidated funds (each of which is included within noncontrolling interests); (ii) a portion of the income earned by the Company is subject to the New York City unincorporated business tax; (iii) certain foreign subsidiaries are subject to foreign corporate income taxes; in addition, in the year-to-date period, the valuation allowance on the Company’s foreign tax credits increased. In accordance with GAAP, the Company recognizes tax benefits for amounts that are “more likely than not” to be sustained upon examination by tax authorities. For uncertain tax positions in which the benefit to be realized does not meet the “more likely than not” threshold, the Company establishes a liability, which is included within other liabilities in the consolidated balance sheets. As of September 30, 2017 and December 31, 2016, the Company had a liability for unrecognized tax benefits of $7.0 million. As of and for the three and nine months ended September 30, 2017, the Company did not accrue interest or penalties related to uncertain tax positions. As of September 30, 2017, the Company does not believe that there will be a significant change to the uncertain tax positions during the next 12 months. The Company’s total unrecognized tax benefits that, if recognized, would affect its effective tax rate was $4.6 million as of September 30, 2017. |
General, Administrative and Other |
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Other Income and Expenses [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
General, Administrative and Other | The following table presents the components of general, administrative and other expenses as reported in the consolidated statements of comprehensive income (loss):
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Earnings (Loss) Per Class A Share |
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Earnings Per Share [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Earnings (Loss) Per Class A Share | EARNINGS (LOSS) PER CLASS A SHARE Basic earnings (loss) per Class A Share is computed by dividing the net income (loss) attributable to Class A Shareholders by the weighted-average number of Class A Shares outstanding for the period. For the three months ended September 30, 2017 and 2016 the Company included 1,011,588 and 1,060,924 RSUs respectively, that have vested but have not been settled in Class A Shares in the weighted-average Class A Shares outstanding used to calculate basic and diluted earnings (loss) per Class A Share. For the nine months ended September 30, 2017 and 2016 the Company included 1,103,969 and 1,162,390 RSUs respectively, that have vested but have not been settled in Class A Shares in the weighted-average Class A Shares outstanding used to calculate basic and diluted earnings (loss) per Class A Share. The Company did not include the Group P Units in the calculations of dilutive earnings (loss) per Class A Share, as the applicable Performance Condition has not yet been met as of September 30, 2017 (see Note 3). The following tables present the computation of basic and diluted earnings (loss) per Class A Share:
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Related Party Transactions |
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Related Party Transactions | RELATED PARTY TRANSACTIONS Due from Related Parties Amounts due from related parties relate primarily to amounts due from the funds for expenses paid on their behalf. These amounts are reimbursed to the Company on an ongoing basis. Due to Related Parties Amounts due to related parties relate primarily to future payments owed to the Company’s executive managing directors and the Ziffs under the tax receivable agreement, as discussed further in Note 15. Management Fees and Incentive Income Earned from the Funds The Company earns substantially all of its management fees and incentive income from the funds, which are considered related parties as the Company manages the operations of and makes investment decisions for these funds. Management Fees and Incentive Income Earned from Related Parties and Waived Fees As of September 30, 2017 and 2016, respectively, approximately $2.8 billion and $2.6 billion, of the Company’s assets under management represented investments by the Company, its executive managing directors, employees and certain other related parties in the Company’s funds. As of September 30, 2017 and 2016, approximately 69% and 51%, respectively, of these affiliated assets under management were not charged management fees and were not subject to an incentive income calculation. The following table presents management fees and incentive income charged on investments held by related parties before the impact of eliminations related to the consolidated funds:
Corporate Aircraft The Company’s corporate aircraft were sold in the first half of 2017. Until that time they were used primarily for business purposes. From time to time, certain executive managing directors used the aircraft for personal use. For the three months ended September 30, 2017 and 2016, the Company charged no fees and $74 thousand, respectively, for personal use of the aircraft by certain executive managing directors. For the nine months ended September 30, 2017 and 2016 the Company charged $360 thousand and $669 thousand, respectively, for personal use of the aircraft by certain executive managing directors. |
Commitments and Contingencies |
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Commitments and Contingencies Disclosure [Abstract] | |||||||||||||||||||||||||||||||||
Commitments and Contingencies | COMMITMENTS AND CONTINGENCIES Tax Receivable Agreement The purchase of Group A Units from the executive managing directors and the Ziffs with the proceeds from the 2007 Offerings, and subsequent taxable exchanges by them of Partner Equity Units for Class A Shares on a one-for-one basis (or, at the Company’s option, a cash equivalent), resulted, and, in the case of future exchanges, are anticipated to result, in an increase in the tax basis of the tangible and intangible assets of the Oz Operating Group that would not otherwise have been available. As a result, the Company expects that its future tax liability will be reduced. Pursuant to the tax receivable agreement entered into among the Company, the executive managing directors and the Ziffs, the Company has agreed to pay to the executive managing directors and the Ziffs 85% of the amount of tax savings, if any, actually realized by the Company. The Company recorded its initial estimate of future payments under the tax receivable agreement as a decrease to paid-in capital and an increase in amounts due to related parties in the consolidated financial statements. Subsequent adjustments to the liability for future payments under the tax receivable agreement related to changes in estimated future tax rates or state income tax apportionment are recognized through current period earnings in the consolidated statements of comprehensive income (loss). In connection with the departure of certain former executive managing directors since the IPO, the right to receive payments under the tax receivable agreement by those former executive managing directors was contributed to the Oz Operating Group. As a result, the Company expects to pay to the remaining executive managing directors and the Ziffs approximately 78% (from 85% at the time of the IPO) of the amount of cash savings, if any, in federal, state and local income taxes in the United States that the Company actually realizes as a result of the increases in tax basis. The estimate of the timing and the amount of future payments under the tax receivable agreement involves several assumptions that do not account for the significant uncertainties associated with these potential payments, including an assumption that Oz Corp will have sufficient taxable income in the relevant tax years to utilize the tax benefits that would give rise to an obligation to make payments. The actual timing and amount of any actual payments under the tax receivable agreement will vary based upon these and a number of other factors. As of September 30, 2017, the estimated future payment under the tax receivable agreement was $520.8 million, which is recorded in due to related parties on the consolidated balance sheets. Lease Obligations The Company has non-cancelable operating leases for its headquarters in New York expiring in 2029 and various other operating leases for its offices in London, Hong Kong, Mumbai, Beijing, Shanghai and Houston expiring on various dates through 2024. The Company also has operating leases for other locations, as well as operating leases on computer hardware. The Company recognizes expense related to its operating leases on a straight-line basis over the lease term taking into account any rent holiday periods. The related lease commitments have not changed materially since December 31, 2016. Litigation From time to time, the Company is involved in litigation and claims incidental to the conduct of the Company’s business. The Company is also subject to extensive scrutiny by regulatory agencies globally that have, or may in the future have, regulatory authority over the Company and its business activities. This has resulted, or may in the future result, in regulatory agency investigations, litigation and subpoenas and costs related to each. On May 5, 2014, a purported class of shareholders filed a lawsuit against the Company in the U.S. District Court for the Southern District of New York (Menaldi v. Och-Ziff Capital Mgmt., et al.). The amended complaint asserted claims under the Securities Exchange Act of 1934 on behalf of all purchasers of Company securities from February 9, 2012 to August 22, 2014. Daniel Och, Joel Frank and Michael Cohen were also named as defendants. On March 16, 2015, all defendants moved to dismiss the amended complaint. On February 17, 2016, the court entered an order granting in part the motion to dismiss filed by the Company and Messrs. Och and Frank and dismissing Mr. Cohen from the action. On March 23, 2016, the Company and Messrs. Och and Frank filed their answer to the amended complaint. On November 18, 2016, plaintiffs filed a second amended complaint asserting claims under the Securities Exchange Act of 1934 on behalf of all purchasers of Company securities from November 18, 2011 to April 11, 2016. The second amended complaint alleges, among other things, breaches of certain disclosure obligations with respect to matters that were under investigation by the SEC and the DOJ, and names the Company and Messrs. Och, Frank and Cohen as defendants. On November 23, 2016, Mr. Cohen objected to being named as a defendant in the second amended complaint on procedural grounds. On December 21, 2016, the court directed the plaintiffs to file a motion for permission to renew their claims against Mr. Cohen. Plaintiffs filed their motion on January 7, 2017. On January 11, 2017, the Company filed a motion to dismiss those portions of the second amended complaint that seek to revive dismissed claims or assert new claims against it, and Messrs. Och and Frank filed motions to dismiss as well. On September 29, 2017, the Court granted the Company’s motion to dismiss in its entirety and dismissed Plaintiffs’ revived claims and new claims against the Company and Messrs. Och and Frank. The Court also dismissed Mr. Cohen from the case entirely and denied Plaintiffs’ request to file a further amended complaint. The Company believes the pending case is without merit and intends to defend it vigorously. The Company is unable to reasonably estimate the amount of loss or range of loss possible for this case. Unearned Incentive Income The Company receives incentive income distributions from certain funds that are subject to clawback in the event of future losses in the respective fund. The Company recognizes this incentive income when it is no longer subject to clawback. These clawback contingencies will be resolved as remaining investments in the respective funds are realized, the timing of which is uncertain. The following table presents the activity in the Company’s unearned incentive income liability:
Investment Commitments From time to time, certain funds consolidated by the Company may have commitments to fund investments. These commitments are funded through contributions from investors in those funds, including the Company if it is an investor in the relevant fund. The Company has unfunded capital commitments of $24.5 million to certain funds it manages. It expects to fund these commitments over the next five years. In addition, certain of the Company’s executive managing directors, collectively, have capital commitments to funds managed by the Company of up to $39.9 million. The Company has guaranteed these commitments in the event any executive managing director fails to fund any portion when called by the fund. The Company has historically not funded any of these commitments and does not expect to in the future, as these commitments are expected to be funded by the Company’s executive managing directors individually. Other Contingencies In the normal course of business, the Company enters into contracts that provide a variety of general indemnifications. Such contracts include those with certain service providers, brokers and trading counterparties. Any exposure to the Company under these arrangements could involve future claims that may be made against the Company. Currently, no such claims exist or are expected to arise and, accordingly, the Company has not accrued any liability in connection with such indemnifications. |
Segment Information |
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Segment Reporting [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Segment Information | SEGMENT INFORMATION The Company’s operating segments are the Oz Funds segment and the Company’s real estate business. The Oz Funds segment, which provides asset management services to the Company’s multi-strategy funds, dedicated credit funds and other alternative investment vehicles, is currently the Company’s only reportable operating segment under GAAP. The Company’s real estate business, which provides asset management services to its real estate funds, is included in the Other Operations, as it does not meet the threshold of a reportable operating segment under GAAP. In addition to analyzing the Company’s results on a GAAP basis, management also reviews its 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 operating performance in any given period. Management uses Economic Income as the basis on which it evaluates the Company’s financial performance 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:
In addition, expenses related to incentive income profit-sharing arrangements are generally recognized at the same time the related incentive income revenue is recognized, as management reviews the total compensation expense related to these arrangements in relation to any incentive income earned by the relevant fund. Further, deferred cash compensation is expensed in full in the year granted for Economic Income, rather than over the service period for GAAP. Finally, management reviews Economic Income revenues by presenting management fees net of recurring placement and related service fees, rather than considering these fees an expense, and by excluding the impact of eliminations related to the consolidated funds. Management does not regularly review assets by operating segment in assessing operating segment performance and the allocation of company resources; therefore, the Company does not present total assets by operating segment. Substantially all interest income and all interest expense related to outstanding indebtedness is allocated to the Oz Funds segment. The Company’s investigation-related settlements were all allocated to the Oz Funds segment. Oz Funds Segment Results
Reconciliation of Oz Funds Segment Revenues to Consolidated Revenues
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Reconciliation of Oz Funds Segment Economic Income to Net Income (Loss) Attributable to Class A Shareholders
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Subsequent Events |
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Sep. 30, 2017 | |
Subsequent Events [Abstract] | |
Subsequent Events | SUBSEQUENT EVENTS Dividend On November 2, 2017, the Company announced a cash dividend of $0.02 per Class A Share. The dividend is payable on November 20, 2017, to holders of record as of the close of business on November 13, 2017. |
Basis of Presentation and Summary of Significant Accounting Policies (Policies) |
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Organization, Consolidation and Presentation of Financial Statements [Abstract] | |||||||||||||
Basis of Presentation | Basis of Presentation These unaudited, interim, consolidated financial statements are prepared in accordance with GAAP as set forth in the Financial Accounting Standards Board’s (“FASB”) Accounting Standards Codification (“ASC”), and should be read in conjunction with the audited consolidated financial statements included in the Company’s annual report on Form 10-K for the year ended December 31, 2016 (the “Annual Report”). In the opinion of management, all adjustments considered necessary for a fair presentation of the Company’s unaudited, interim, consolidated financial statements have been included and are of a normal and recurring nature. The results of operations presented for the interim periods are not necessarily indicative of the results that may be expected for any other interim period or for the entire year, primarily because of the majority of incentive income and actual amounts of discretionary cash bonuses being recorded in the fourth quarter each year. All significant intercompany transactions and balances have been eliminated in consolidation. |
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Interim Accrual of Annual Discretionary Cash Bonus | Interim Accrual of Annual Discretionary Cash Bonus In the first quarter of 2017, the Company decided to provide a minimum annual discretionary cash bonus. As a result of this decision, the Company accrues the minimum annual discretionary cash bonus on a straight-line basis during the year. The total amount of discretionary cash bonuses ultimately recognized for the full year, which is determined in the fourth quarter of each year, could differ materially from the minimum amount accrued, as the total discretionary cash bonus is dependent upon a variety of factors, including fund performance for the year. |
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Reclassifications | Reclassifications The Company has reclassified the changes in tax receivable agreement liability from general, administrative and other expenses to other income (loss) in the consolidated statements of comprehensive income (loss). The Company also reclassified its investments in funds, joint ventures and United States government obligations from other assets, net to investments in the Company’s consolidated balance sheets. These reclassifications had no impact on the Company’s financial position or results of operations, and prior period amounts have been reclassified to conform to the current year presentation. |
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Recently Adopted Accounting Pronouncements | Recently Adopted Accounting Pronouncements In March 2016, the FASB issued Accounting Standards Update (“ASU”) 2016-09, Improvements to Employee Share-Based Payment Accounting. The requirements of ASU 2016-09 were effective for the Company beginning in the first quarter of 2017. As permitted under the new guidance, the Company has made an accounting policy election to account for forfeitures on share-based compensation arrangements as they occur. Prior to the adoption of ASU 2016-09, the Company was required to estimate forfeitures. The decision to no longer estimate forfeitures was not material to the financial statements. Additionally, the Company will recognize all income tax effects of awards within consolidated and comprehensive net income when the awards vest or are settled. Prior to the adoption of ASU 2016-09, excess tax benefits were recorded to paid-in capital, while tax deficiencies were recorded in consolidated and comprehensive net income to the extent in excess of previously recorded excess tax benefits. The amendments related to the recognition of excess tax benefits and tax deficiencies in the statement of comprehensive income were applied prospectively. In October 2016, the FASB issued ASU 2016-17, Consolidation (Topic 810): Interests Held through Related Parties that Are under Common Control. The guidance was effective for the Company beginning in the first quarter of 2017. ASU 2016-17 amended the consolidation guidance with respect to a single decision maker’s evaluation of interests held through related parties that are under common control when it is determining whether it is the primary beneficiary of a variable interest entity (“VIE”). Under the amended guidance, a reporting entity considers its indirect economic interests in a VIE held through related parties that are under common control on a proportionate basis, consistent with the way it would evaluate its indirect economic interests held through related parties that are not under common control. The adoption of ASU 2016-17 did not have a material impact on the Company’s consolidated financial statements. None of the other changes to GAAP that went into effect in the nine months ended September 30, 2017 has had a material effect on the Company’s consolidated financial statements. Future Adoption of Accounting Pronouncements In May 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers. ASU 2014-09 supersedes the revenue recognition requirements in ASC 605-Revenue Recognition and most industry-specific revenue recognition guidance throughout the ASC. The core principle of the guidance is that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. The Company is in the process of implementing the new revenue guidance and is continuing to evaluate the effect the ASU will have on its consolidated financial statements, including, whether the Company: (a) will be required to recognize incentive income earlier than as prescribed under current guidance, (b) should present certain revenue streams on a gross or net basis depending on whether it is identified as principal or agent in a transaction where the standard’s core principle is one of control and not risks and rewards, as is the case with the current guidance, and (c) whether certain costs associated with business development and deal origination, which are currently recognized as an expense as incurred, should be initially deferred and subsequently recognized as an expense over a specified period. The ASU also introduces new qualitative and quantitative disclosure requirements and requires disaggregation of revenue information beyond that which is currently required, that will significantly impact the information presented in the notes to the Company’s consolidated financial statements. The Company expects to adopt ASU 2014-09 using a modified retrospective application approach in the first quarter of 2018. In February 2016, the FASB issued ASU 2016-02, Leases. ASU 2016-02 significantly changes accounting for lease arrangements, in particular from the perspective of the lessee. The Company is not currently a lessor in any significant lease arrangements, but is a lessee in several lease arrangements that would be impacted by the ASU. The Company has determined that most of its operating leases will be reported as lease obligations, along with offsetting right to use assets on its consolidated balance sheet at their present value, and will continue to recognize associated expenses within consolidated net income (loss) in a manner similar to the existing accounting for leases (i.e., on a straight-line basis over the lease term). Entities are required to use a modified retrospective approach for leases that exist or are entered into after the beginning of the earliest comparative period in the financial statements. The requirements of ASU 2016-02 are effective for the Company beginning in the first quarter of 2019. See Note 17 of the Company’s Annual Report for details related to the Company’s existing operating lease obligations. None of the other changes to GAAP that are not yet effective are expected to have a material effect on the Company’s consolidated financial statements. |
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Fair Value Disclosure | Fair value represents the price that would be received upon the sale of an asset or paid to transfer a liability in an orderly transaction between market participants as of the measurement date (i.e., an exit price). Due to the inherent uncertainty of valuations of investments that are determined to be illiquid or do not have readily ascertainable fair values, the estimates of fair value may differ from the values ultimately realized, and those differences can be material. GAAP prioritizes the level of market price observability used in measuring assets and liabilities at fair value. Market price observability is impacted by a number of factors, including the type of assets and liabilities and the specific characteristics of the assets and liabilities. Assets and liabilities with readily available, actively quoted prices or for which fair value can be measured from actively-quoted prices generally will have a higher degree of market price observability and lesser degree of judgment used in measuring fair value. Assets and liabilities measured at fair value are classified into one of the following categories:
In certain cases, the inputs used to measure fair value may fall into different levels of the fair value hierarchy. In such cases, an asset or liability’s level within the fair value hierarchy is based on the lowest level of input that is significant to the fair value measurement. The assessment of the significance of a particular input to the fair value measurement in its entirety requires judgment and considers factors specific to the asset or liability. |
Noncontrolling Interests (Tables) |
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Components of Net Income (Loss) Attributable to Noncontrolling Interests | The following table presents the components of the net income (loss) attributable to noncontrolling interests:
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Components of Shareholders' Equity Attributable to Noncontrolling Interests | The following table presents the components of the shareholders’ equity attributable to noncontrolling interests:
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Redeemable Noncontrolling Interests Roll Forward | The Preferred Units and fund investors’ interests in certain consolidated funds are redeemable outside of the Company’s control. These interests are classified within redeemable noncontrolling interests in the consolidated balance sheets. The following table presents the activity in redeemable noncontrolling interests:
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Investments and Fair Value Disclosures (Tables) |
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Fair Value Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Investments Summary | The following table presents the components of the Company’s investments as reported in the consolidated balance sheets:
_______________ (1) Held by the Oz Operating Group and of which $99.8 million mature on December 21, 2017 and $12.9 million mature on March 1, 2018. |
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Schedule of Fair Value, Assets and Liabilities Measured on Recurring Basis | The following table summarizes the Company’s investments including assets and liabilities measured at fair value on a recurring basis within the fair value hierarchy as of September 30, 2017:
_______________ (1) As of September 30, 2017, investments in CLOs had contractual principal amounts of $176.6 million outstanding. The following table summarizes assets and liabilities measured at fair value on a recurring basis within the fair value hierarchy as of December 31, 2016:
_______________ (1) As of December 31, 2016, investment in CLO had contractual principal amounts of $21.3 million outstanding. |
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Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation | The following tables summarize the changes in the Company’s Level III assets and liabilities for the three months ended September 30, 2017:
The following tables summarize the changes in the Company’s Level III assets for the three months ended September 30, 2016:
The following tables summarize the changes in the Company’s Level III assets and liabilities for the nine months ended September 30, 2017:
The following table summarizes the changes in the Company’s Level III assets for the nine months ended September 30, 2016:
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Fair Value, Measured on Recurring Basis, Gain (Loss) Included in Earnings | The table below summarizes the net change in unrealized gains and losses on the Company’s Level III assets and liabilities held as of the reporting date. These gains and losses are included within net gains of consolidated funds in the Company’s consolidated statements of comprehensive income (loss):
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Variable Interest Entities (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2017 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Variable Interest Entities | The table below presents the assets and liabilities of VIEs consolidated by the Company:
The assets presented in the table above belong to the investors in those funds, are available for use only by the fund to which they belong, and are not available for use by the Company. The consolidated funds have no recourse to the general credit of the Company with respect to any liability. The Company’s direct involvement with funds that are VIEs and not consolidated by the Company is generally limited to providing asset management services and, in certain cases, direct investments in the VIEs. The maximum exposure to loss represents the potential loss of current investments or income and fees receivables from these entities, as well as the obligation to repay unearned revenues, primarily incentive income subject to clawback, in the event of any future fund losses. The Company has commitments to certain funds that are VIEs as discussed in Note 15. The Company does not provide, nor is it required to provide, any type of non-contractual financial or other support to its VIEs that are not consolidated. The table below presents the net assets of VIEs in which the Company has variable interests:
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Other Assets, Net (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2017 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Components of Other Assets | The following table presents the components of other assets, net as reported in the consolidated balance sheets:
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Other Liabilities (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2017 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Other Liabilities Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Components of Other Liabilities | The following table presents the components of other liabilities as reported in the consolidated balance sheets:
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Debt Obligations (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2017 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Debt Instruments [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
CLO Investments Loans Table | The table below presents information related to CLO Investments Loans as of September 30, 2017. Carrying values presented below are net of discounts, if any, and unamortized deferred financing costs. The maturity date for each CLO Investments Loan is the earlier of the final maturity date presented in the table below or at such a time when the Company no longer holds a risk retention investment in the respective CLO.
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General, Administrative and Other (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2017 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Other Income and Expenses [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Components of General, Administrative and Other Expenses | The following table presents the components of general, administrative and other expenses as reported in the consolidated statements of comprehensive income (loss):
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Earnings (Loss) Per Class A Share (Tables) |
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Sep. 30, 2017 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Earnings Per Share [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Computation of Basic and Diluted Earnings Per Class A Share | The following tables present the computation of basic and diluted earnings (loss) per Class A Share:
|
Related Party Transactions (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2017 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Related Party Transactions [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Management Fees and Incentive Income Earned from Related Parties | The following table presents management fees and incentive income charged on investments held by related parties before the impact of eliminations related to the consolidated funds:
|
Commitments and Contingencies (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Sep. 30, 2017 | |||||||||||||||||||||||||||||||||
Commitments and Contingencies Disclosure [Abstract] | |||||||||||||||||||||||||||||||||
Unearned Incentive Income Roll Forward | The Company receives incentive income distributions from certain funds that are subject to clawback in the event of future losses in the respective fund. The Company recognizes this incentive income when it is no longer subject to clawback. These clawback contingencies will be resolved as remaining investments in the respective funds are realized, the timing of which is uncertain. The following table presents the activity in the Company’s unearned incentive income liability:
|
Segment Information (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2017 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Segment Reporting [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Oz Funds Segment Results | Oz Funds Segment Results
|
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Reconciliation of Oz Funds Segment Revenues to Consolidated Revenues | Reconciliation of Oz Funds Segment Revenues to Consolidated Revenues
_______________
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Reconciliation of Oz Funds Economic Income to Net Income (Loss) Attributable to Class A Shareholders | Reconciliation of Oz Funds Segment Economic Income to Net Income (Loss) Attributable to Class A Shareholders
|
Noncontrolling Interests - Components of Net Income (Loss) Attributable to Noncontrolling Interests (Detail) - USD ($) $ in Thousands |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2017 |
Sep. 30, 2016 |
Sep. 30, 2017 |
Sep. 30, 2016 |
|
Noncontrolling Interest [Line Items] | ||||
Net Income (Loss) Attributable to Noncontrolling Interests | $ 9,760 | $ 16,570 | $ 41,680 | $ (186,867) |
Group A Units | ||||
Noncontrolling Interest [Line Items] | ||||
Net Income (Loss) Attributable to Noncontrolling Interests | 9,500 | 16,313 | 41,145 | (187,338) |
Consolidated funds | ||||
Noncontrolling Interest [Line Items] | ||||
Net Income (Loss) Attributable to Noncontrolling Interests | 0 | 0 | 0 | 262 |
Other | ||||
Noncontrolling Interest [Line Items] | ||||
Net Income (Loss) Attributable to Noncontrolling Interests | $ 260 | $ 257 | $ 535 | $ 209 |
Noncontrolling Interests - Components of Shareholders' Equity Attributable to Noncontrolling Interests (Detail) - USD ($) $ in Thousands |
Sep. 30, 2017 |
Dec. 31, 2016 |
---|---|---|
Noncontrolling Interest [Line Items] | ||
Shareholders’ equity attributable to noncontrolling interests | $ 264,102 | $ 171,929 |
Group A Units | ||
Noncontrolling Interest [Line Items] | ||
Shareholders’ equity attributable to noncontrolling interests | 260,011 | 166,521 |
Other | ||
Noncontrolling Interest [Line Items] | ||
Shareholders’ equity attributable to noncontrolling interests | $ 4,091 | $ 5,408 |
Investments and Fair Value Disclosures - Schedule of Investments (Details) - USD ($) $ in Thousands |
9 Months Ended | ||||
---|---|---|---|---|---|
Sep. 30, 2017 |
Dec. 31, 2016 |
||||
Investment [Line Items] | |||||
United States government obligations, at fair value | $ 112,722 | [1] | $ 0 | ||
CLOs, at fair value | 176,803 | 21,341 | |||
Other funds and joint ventures, equity method | 15,123 | 16,639 | |||
Investments | 304,648 | $ 37,980 | |||
Maturity 30 to 90 days | |||||
Investment [Line Items] | |||||
United States government obligations, at fair value | $ 99,800 | ||||
US Government Obligations, Included in Investments, Maturity Date | Dec. 21, 2017 | ||||
Maturity greater than 90 Days | |||||
Investment [Line Items] | |||||
United States government obligations, at fair value | $ 12,900 | ||||
US Government Obligations, Included in Investments, Maturity Date | Mar. 01, 2018 | ||||
|
Investments and Fair Value Disclosures - Schedule of Changes in Company's Level III Assets and Liabilities (Detail) - USD ($) $ in Thousands |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2017 |
Sep. 30, 2016 |
Sep. 30, 2017 |
Sep. 30, 2016 |
|
Consolidated funds | ||||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ||||
Beginning Balance | $ 3,254,089 | |||
Transfers In | 0 | |||
Transfers Out | (466) | |||
Investment Purchases / Issuances | 66,545 | |||
Investment Sales / Settlements | (3,304,733) | |||
Gains / Losses | 815 | |||
Ending Balance | $ 16,250 | 16,250 | ||
Consolidated funds | Bank debt | ||||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ||||
Beginning Balance | $ 39,338 | 8,868 | $ 18,127 | 1,998,423 |
Transfers In | 8,840 | 0 | 767 | 0 |
Transfers Out | (21,900) | (925) | (17,311) | (466) |
Investment Purchases / Issuances | 30,470 | 19,317 | 87,611 | 66,545 |
Investment Sales / Settlements | (33,975) | (11,325) | (67,082) | (2,049,067) |
Gains / Losses | 564 | 315 | 1,225 | 815 |
Ending Balance | 23,337 | 16,250 | 23,337 | 16,250 |
Consolidated funds | Real estate investments | ||||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ||||
Beginning Balance | 719,957 | |||
Transfers In | 0 | |||
Transfers Out | 0 | |||
Investment Purchases / Issuances | 0 | |||
Investment Sales / Settlements | (719,957) | |||
Gains / Losses | 0 | |||
Ending Balance | 0 | 0 | ||
Consolidated funds | Residential mortgage-backed securities | ||||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ||||
Beginning Balance | 323,571 | |||
Transfers In | 0 | |||
Transfers Out | 0 | |||
Investment Purchases / Issuances | 0 | |||
Investment Sales / Settlements | (323,571) | |||
Gains / Losses | 0 | |||
Ending Balance | 0 | 0 | ||
Consolidated funds | Collateralized debt obligations | ||||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ||||
Beginning Balance | 83,759 | |||
Transfers In | 0 | |||
Transfers Out | 0 | |||
Investment Purchases / Issuances | 0 | |||
Investment Sales / Settlements | (83,759) | |||
Gains / Losses | 0 | |||
Ending Balance | 0 | 0 | ||
Consolidated funds | Energy and natural resources limited partnerships | ||||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ||||
Beginning Balance | 70,604 | |||
Transfers In | 0 | |||
Transfers Out | 0 | |||
Investment Purchases / Issuances | 0 | |||
Investment Sales / Settlements | (70,604) | |||
Gains / Losses | 0 | |||
Ending Balance | 0 | 0 | ||
Consolidated funds | Commercial real estate debt | ||||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ||||
Beginning Balance | 18,295 | |||
Transfers In | 0 | |||
Transfers Out | 0 | |||
Investment Purchases / Issuances | 0 | |||
Investment Sales / Settlements | (18,295) | |||
Gains / Losses | 0 | |||
Ending Balance | 0 | 0 | ||
Consolidated funds | Asset-backed securities | ||||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ||||
Beginning Balance | 23,739 | |||
Transfers In | 0 | |||
Transfers Out | 0 | |||
Investment Purchases / Issuances | 0 | |||
Investment Sales / Settlements | (23,739) | |||
Gains / Losses | 0 | |||
Ending Balance | 0 | 0 | ||
Consolidated funds | Commercial mortgage-backed securities | ||||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ||||
Beginning Balance | 13,803 | |||
Transfers In | 0 | |||
Transfers Out | 0 | |||
Investment Purchases / Issuances | 0 | |||
Investment Sales / Settlements | (13,803) | |||
Gains / Losses | 0 | |||
Ending Balance | 0 | 0 | ||
Consolidated funds | Other investments (including derivatives, net) | ||||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ||||
Beginning Balance | 1,938 | |||
Transfers In | 0 | |||
Transfers Out | 0 | |||
Investment Purchases / Issuances | 0 | |||
Investment Sales / Settlements | (1,938) | |||
Gains / Losses | 0 | |||
Ending Balance | $ 0 | $ 0 | ||
Management company related | CLOs | ||||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ||||
Beginning Balance | 43,723 | 21,341 | ||
Transfers In | 0 | 0 | ||
Transfers Out | 0 | 0 | ||
Investment Purchases / Issuances | 132,685 | 152,885 | ||
Investment Sales / Settlements | 0 | 0 | ||
Gains / Losses | 395 | 2,577 | ||
Ending Balance | $ 176,803 | $ 176,803 |
Investments and Fair Value Disclosures - Schedule of Net Unrealized Gains (Losses) on Company's Level III Assets and Liabilities (Detail) - USD ($) $ in Thousands |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2017 |
Sep. 30, 2016 |
Sep. 30, 2017 |
Sep. 30, 2016 |
|
Management company related | CLOs | ||||
Fair Value Assets And Liabilities Measured On Recurring Basis [Line Items] | ||||
Unrealized gains (losses) on Level III assets and liabilities held as of the balance sheet date | $ 178 | $ 0 | $ 2,360 | $ 0 |
Consolidated funds | Bank debt | ||||
Fair Value Assets And Liabilities Measured On Recurring Basis [Line Items] | ||||
Unrealized gains (losses) on Level III assets and liabilities held as of the balance sheet date | $ 61 | $ 242 | $ 142 | $ 322 |
Transfers of Financial Assets - Additional Information (Detail) - USD ($) $ in Thousands |
9 Months Ended | 12 Months Ended |
---|---|---|
Sep. 30, 2017 |
Dec. 31, 2016 |
|
Transfer of Financial Assets Accounted for as Sales [Line Items] | ||
Loans sold to CLOs managed by the Company | $ 45,600 | |
Risk retention percentage | 5.00% | |
Cash Flows Between Transferor and Transferee, Beneficial Interest | $ 45,400 | $ 21,500 |
Investments in retained interests | 69,600 | 21,300 |
Proceeds from collection of retained interest in securitized receivables | 474 | |
Loans held for sale | 0 | 8,204 |
Trades receivable for loans subject to forward sale agreement | 0 | 10,391 |
Obligation to deliver loans subject to forward sale agreement, at fair value | 0 | 8,204 |
Loan trades payable | 0 | 10,391 |
Loans of CLOs Not Consolidated | ||
Transfer of Financial Assets Accounted for as Sales [Line Items] | ||
Principal amount outstanding of loans sold to CLO | $ 61,000 | $ 19,700 |
Variable Interest Entities - Assets and Liabilities of Funds that are VIEs and Consolidated by Company (Detail) - USD ($) $ in Thousands |
Sep. 30, 2017 |
Dec. 31, 2016 |
---|---|---|
Variable Interest Entity [Line Items] | ||
Risk retention percentage | 5.00% | |
Assets of consolidated funds: | ||
Investments of consolidated funds, at fair value | $ 41,074 | $ 37,661 |
Other assets of consolidated funds | 12,416 | 17,544 |
Total Assets | 1,543,373 | 1,485,555 |
Liabilities of consolidated funds: | ||
Other liabilities of consolidated funds | 8,965 | 15,197 |
Total Liabilities | 1,305,515 | 1,495,526 |
Funds | Variable Interest Entity, Primary Beneficiary | ||
Assets of consolidated funds: | ||
Investments of consolidated funds, at fair value | 41,074 | 37,661 |
Other assets of consolidated funds | 12,416 | 17,544 |
Total Assets | 53,490 | 55,205 |
Liabilities of consolidated funds: | ||
Other liabilities of consolidated funds | 8,965 | 15,197 |
Total Liabilities | $ 8,965 | $ 15,197 |
Variable Interest Entities - Assets and Liabilities Related to VIEs that are Not Consolidated (Detail) - USD ($) $ in Thousands |
Sep. 30, 2017 |
Dec. 31, 2016 |
---|---|---|
Maximum risk of loss as a result of the Company's involvement with VIEs | ||
Unearned revenues | $ 122,833 | $ 96,079 |
Income and fees receivable | 77,847 | 176,638 |
Variable Interest Entity, Not Primary Beneficiary | ||
Variable Interest Entity [Line Items] | ||
Net assets of unconsolidated VIEs in which the Company has a variable interest | 7,177,884 | 4,069,617 |
Maximum risk of loss as a result of the Company's involvement with VIEs | ||
Unearned revenues | 123,194 | 96,409 |
Income and fees receivable | 6,811 | 13,074 |
Investments in funds | 187,819 | 35,868 |
Maximum Exposure to Loss | $ 317,824 | $ 145,351 |
Other Assets, Net - Components of Other Assets (Detail) - USD ($) $ in Thousands |
Sep. 30, 2017 |
Dec. 31, 2016 |
---|---|---|
Fixed Assets: | ||
Leasehold improvements | $ 53,419 | $ 54,414 |
Computer hardware and software | 42,437 | 40,093 |
Furniture, fixtures and equipment | 8,571 | 8,919 |
Corporate aircraft held for sale | 0 | 56,251 |
Accumulated depreciation and amortization | (56,056) | (49,890) |
Fixed assets, net | 48,371 | 109,787 |
Goodwill | 22,691 | 22,691 |
Prepaid expenses | 9,415 | 12,753 |
Trades receivable for loans subject to forward sale agreement | 0 | 10,391 |
Loans held for sale | 0 | 8,204 |
Other | 3,040 | 6,158 |
Total Other Assets, Net | $ 83,517 | $ 169,984 |
Other Assets, Net - Additional Information (Detail) $ in Millions |
9 Months Ended |
---|---|
Sep. 30, 2017
USD ($)
| |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | |
Net proceeds from sale of corporate aircraft | $ 57.6 |
Net gain on sale of aircraft | $ 1.3 |
Other Liabilities - Components of Other Liabilities (Detail) - USD ($) $ in Thousands |
Sep. 30, 2017 |
Dec. 31, 2016 |
---|---|---|
Other Liabilities Disclosure [Abstract] | ||
Unearned incentive income | $ 122,833 | $ 96,079 |
Accrued expenses | 28,232 | 30,728 |
Deferred rent credit | 8,874 | 15,046 |
Interest payable | 7,083 | 2,654 |
Loan trades payable | 0 | 10,391 |
Obligation to deliver loans subject to forward sale agreement, at fair value | 0 | 8,204 |
Other | 13,421 | 11,892 |
Total Other Liabilities | $ 180,443 | $ 174,994 |
Debt Obligations - Schedule of CLO Investments Loans (Detail) - USD ($) $ in Thousands |
9 Months Ended | |
---|---|---|
Sep. 30, 2017 |
Dec. 31, 2016 |
|
Debt Instrument [Line Items] | ||
Borrowings Outstanding | $ 541,016 | $ 577,128 |
December 15, 2016 | ||
Debt Instrument [Line Items] | ||
Debt Instrument, Maturity Date | Dec. 15, 2023 | |
Borrowings Outstanding | $ 17,744 | 15,801 |
Interest rate spread over basis | 2.23% | |
June 07, 2017 | ||
Debt Instrument [Line Items] | ||
Debt Instrument, Maturity Date | Nov. 16, 2029 | |
Borrowings Outstanding | $ 17,037 | 0 |
Interest rate spread over basis | 1.48% | |
July 21, 2017 | ||
Debt Instrument [Line Items] | ||
Debt Instrument, Maturity Date | Jan. 22, 2029 | |
Borrowings Outstanding | $ 21,671 | 0 |
Interest rate spread over basis | 1.43% | |
August 02, 2017 | ||
Debt Instrument [Line Items] | ||
Debt Instrument, Maturity Date | Jan. 21, 2030 | |
Borrowings Outstanding | $ 21,633 | 0 |
Interest rate spread over basis | 1.41% | |
August 17, 2017 | ||
Debt Instrument [Line Items] | ||
Debt Instrument, Maturity Date | Apr. 30, 2030 | |
Borrowings Outstanding | $ 22,890 | 0 |
Interest rate spread over basis | 1.43% | |
September 14, 2017 | ||
Debt Instrument [Line Items] | ||
Debt Instrument, Maturity Date | Apr. 22, 2030 | |
Borrowings Outstanding | $ 25,410 | 0 |
Interest rate spread over basis | 1.41% | |
September 14, 2017 | ||
Debt Instrument [Line Items] | ||
Debt Instrument, Maturity Date | Sep. 14, 2024 | |
Borrowings Outstanding | $ 19,206 | 0 |
Interest rate spread over basis | 2.21% | |
Total CLO Investments Loans | ||
Debt Instrument [Line Items] | ||
Borrowings Outstanding | $ 145,591 | $ 15,801 |
Debt Obligations - Debt Obligations Additional Information (Detail) $ in Thousands |
1 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Mar. 31, 2017
USD ($)
|
Sep. 30, 2017
USD ($)
|
Sep. 30, 2016
USD ($)
|
Dec. 31, 2016
USD ($)
|
|
Debt Instrument [Line Items] | ||||
Repayments of debt obligations | $ 167,319 | $ 2,738 | ||
Borrowings Outstanding | 541,016 | $ 577,128 | ||
Senior Notes | ||||
Debt Instrument [Line Items] | ||||
Debt Instrument, Face Amount | $ 400,000 | |||
Debt Instrument, Maturity Date | Nov. 20, 2019 | |||
Notes Issuance Price | 99.417% | |||
Debt Instrument, Interest Rate, Stated Percentage | 4.50% | |||
Debt Instrument, Redemption Price, Percentage | 100.00% | |||
Debt Instrument, Redemption Price, Change in Control, Percentage | 101.00% | |||
Revolving Credit Facility | ||||
Debt Instrument [Line Items] | ||||
Debt Instrument, Maturity Date | Nov. 20, 2019 | |||
Line of Credit Facility, Current Borrowing Capacity | $ 150,000 | |||
Weighted-Average Maturity in Years | 5 years | |||
Line of Credit Facility, Maximum Borrowing Capacity | $ 225,000 | |||
Undrawn Commitment Fee | 0.25% | |||
Interest rate spread over basis | 2.00% | |||
Fee-Paying Assets Under Management Covenant Amount | $ 22,000,000 | |||
Indebtedness Permitted Under Credit Facility Agreement | 150,000 | |||
Additional Indebtedness Permitted Under Credit Facility Agreement for CLO Risk Retention Investments | 400,000 | |||
Other Liens Permitted Under Credit Facility Agreement | $ 50,000 | |||
Revolving Credit Facility | Maximum | ||||
Debt Instrument [Line Items] | ||||
Undrawn Commitment Fee | 0.25% | |||
Interest rate spread over basis | 2.00% | |||
Debt Instrument, Basis Spread over Base Rate, Percentage | 1.00% | |||
Revolving Credit Facility | Minimum | ||||
Debt Instrument [Line Items] | ||||
Undrawn Commitment Fee | 0.10% | |||
Interest rate spread over basis | 1.00% | |||
Debt Instrument, Basis Spread over Base Rate, Percentage | 0.00% | |||
Aircraft Credit Facility | ||||
Debt Instrument [Line Items] | ||||
Repayments of debt obligations | $ 46,400 | |||
On or prior to December 31, 2017 | Revolving Credit Facility | ||||
Debt Instrument [Line Items] | ||||
Economic Income leverage ratio | 4.00 | |||
On or after March 31, 2018 but on or prior to December 31, 2018 | Revolving Credit Facility | ||||
Debt Instrument [Line Items] | ||||
Economic Income leverage ratio | 3.50 | |||
On or after March 31, 2019 | Revolving Credit Facility | ||||
Debt Instrument [Line Items] | ||||
Economic Income leverage ratio | 3.00 |
Preferred Units - Additional Information (Detail) - USD ($) $ / shares in Units, $ in Thousands |
9 Months Ended | |||
---|---|---|---|---|
Jan. 23, 2017 |
Oct. 05, 2016 |
Sep. 30, 2017 |
Sep. 30, 2016 |
|
Temporary Equity [Line Items] | ||||
Issuance and sale of Preferred Units, gross | $ 150,000 | $ 250,000 | $ 150,054 | $ 0 |
Preferred Units, units issued | 150,000 | 250,000 | ||
Preferred Units, units outstanding | 400,000 | |||
Number of Days After a Change in Control That An Increase in Distribution Rate Occurs | 31 days | |||
Number of Days after the Maturity Date of the Revolving Credit Facility (a Condition to Effect Redemption) | 91 days | |||
Threshold of Average Closing Price of Class A Shares | $ 15.00 | |||
Number of Trading Days | 20 days | |||
Maximum | ||||
Temporary Equity [Line Items] | ||||
Aggregate amount of Preferred Units subject to the Purchase Agreement | 400,000 | |||
Issuance and sale of Preferred Units, gross | $ 400,000 | |||
Preferred Unit, Distribution Rate, Percentage | 10.00% | |||
Minimum | ||||
Temporary Equity [Line Items] | ||||
Preferred Unit, Distribution Rate, Percentage | 0.00% | |||
Through 02/18/2020 | ||||
Temporary Equity [Line Items] | ||||
Preferred Unit Price as a Percent of Liquidation Value | 105.00% | |||
Beginning 31 days after change in control event | ||||
Temporary Equity [Line Items] | ||||
Increase in Distribution Rate on Preferred Units | 7.00% | |||
From 02/19/2020 until 2/18/2021 | ||||
Temporary Equity [Line Items] | ||||
Preferred Unit Price as a Percent of Liquidation Value | 103.00% | |||
From 02/19/2021 until 02/18/2022 | ||||
Temporary Equity [Line Items] | ||||
Preferred Unit Price as a Percent of Liquidation Value | 101.00% | |||
From and after March 31, 2020 | ||||
Temporary Equity [Line Items] | ||||
Threshold of Distributions That Would Cause a Portion to Be Used for Redemption | $ 100,000 | |||
Percent of the Excess Over Threshold That Would Cause Redemption | 20.00% |
Income Taxes - Additional Information (Detail) 10-Q - USD ($) $ in Millions |
3 Months Ended | 9 Months Ended | |||
---|---|---|---|---|---|
Sep. 30, 2017 |
Sep. 30, 2016 |
Sep. 30, 2017 |
Sep. 30, 2016 |
Dec. 31, 2016 |
|
Income Tax Disclosure [Abstract] | |||||
Effective income tax rate | 10.90% | 24.10% | 23.10% | (14.10%) | |
Unrecognized tax benefits | $ 7.0 | $ 7.0 | $ 7.0 | ||
Unrecognized tax benefits that would impact effective tax rate | $ 4.6 | $ 4.6 |
General, Administrative and Other - Components of General, Administrative and Other Expenses (Detail) - USD ($) $ in Thousands |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2017 |
Sep. 30, 2016 |
Sep. 30, 2017 |
Sep. 30, 2016 |
|
Other Income and Expenses [Abstract] | ||||
Professional services | $ 9,414 | $ 18,179 | $ 31,170 | $ 61,374 |
Occupancy and equipment | 7,391 | 9,412 | 25,868 | 27,903 |
Information processing and communications | 6,611 | 7,997 | 20,822 | 26,671 |
Recurring placement and related service fees | 4,829 | 8,808 | 15,490 | 31,362 |
Insurance | 1,843 | 3,999 | 5,727 | 12,030 |
Business development | 644 | 2,458 | 5,614 | 10,916 |
Other expenses | 2,404 | 7,456 | 9,538 | 13,964 |
General and Administrative Expense before Settlements Expense, if any | 33,136 | 58,309 | 114,229 | 184,220 |
Settlements expense | 0 | (2,184) | 0 | 412,101 |
Total General, Administrative and Other | $ 33,136 | $ 56,125 | $ 114,229 | $ 596,321 |
Earnings (Loss) Per Class A Share - Computation of Basic and Diluted Earnings (Loss) Per Class A Share (Detail) - USD ($) $ / shares in Units, $ in Thousands |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2017 |
Sep. 30, 2016 |
Sep. 30, 2017 |
Sep. 30, 2016 |
|
Earnings (Loss) Per Share [Line Items] | ||||
Net Income (Loss) Attributable to Class A Shareholders | $ 5,726 | $ 14,285 | $ 11,660 | $ (133,642) |
Net Income (Loss) Attributable to Class A Shareholders, Diluted | $ 5,726 | $ 24,067 | $ 11,660 | $ (360,118) |
Weighted-Average Class A Shares Outstanding, Basic (in shares) | 186,235,651 | 182,521,225 | 186,201,389 | 182,508,296 |
Weighted-Average Class A Shares Outstanding, Diluted (in shares) | 186,235,651 | 479,838,244 | 186,201,389 | 479,825,416 |
Earnings (Loss) Per Class A Share, Basic (in dollars per share) | $ 0.03 | $ 0.08 | $ 0.06 | $ (0.73) |
Earnings (Loss) Per Class A Share, Diluted (in dollars per share) | $ 0.03 | $ 0.05 | $ 0.06 | $ (0.75) |
Group A Units | ||||
Earnings (Loss) Per Share [Line Items] | ||||
Net Income (Loss) Attributable to Class A Shareholders, Effect of dilutive securities | $ 0 | $ 9,782 | $ 0 | $ (226,476) |
Weighted-Average Class A Shares Outstanding, Effect of dilutive securities (in shares) | 0 | 297,317,019 | 0 | 297,317,120 |
Number of Antidilutive Units Excluded from Diluted Calculation (in shares) | 267,489,478 | 0 | 273,923,088 | 0 |
Restricted Share Units (RSUs) | ||||
Earnings (Loss) Per Share [Line Items] | ||||
Weighted-Average Class A Shares Outstanding, Effect of dilutive securities (in shares) | 0 | 0 | 0 | 0 |
Number of Antidilutive Units Excluded from Diluted Calculation (in shares) | 22,538,548 | 14,470,201 | 21,733,730 | 14,092,299 |
Earnings (Loss) Per Class A Share - Additional Information (Detail) - shares |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2017 |
Sep. 30, 2016 |
Sep. 30, 2017 |
Sep. 30, 2016 |
|
Restricted Share Units (RSUs) | ||||
Earnings (Loss) Per Share [Line Items] | ||||
Vested RSUs included in weighted-average Class A Shares outstanding | 1,011,588 | 1,060,924 | 1,103,969 | 1,162,390 |
Related Party Transactions - Management Fees and Incentive Income Earned from Related Parties and Waived Fees (Detail) - USD ($) $ in Thousands |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2017 |
Sep. 30, 2016 |
Sep. 30, 2017 |
Sep. 30, 2016 |
|
Related Party Transaction [Line Items] | ||||
Amount of related parties assets under management | $ 2,800,000 | $ 2,600,000 | $ 2,800,000 | $ 2,600,000 |
Percent of assets under management not charged management and incentive fees | 69.00% | 51.00% | 69.00% | 51.00% |
Management fees | $ 77,171 | $ 128,513 | $ 243,508 | $ 428,822 |
Incentive income | 51,249 | 18,754 | 168,990 | 57,477 |
Fees charged on investments held by related parties: | ||||
Related Party Transaction [Line Items] | ||||
Management fees | 2,703 | 4,472 | 8,037 | 13,731 |
Incentive income | $ 141 | $ 825 | $ 2,476 | $ 2,825 |
Related Party Transactions - Additional Information (Detail) - USD ($) $ in Thousands |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2017 |
Sep. 30, 2016 |
Sep. 30, 2017 |
Sep. 30, 2016 |
|
Related Party Transactions [Abstract] | ||||
Fees charged for use of corporate aircraft | $ 0 | $ 74 | $ 360 | $ 669 |
Commitments and Contingencies - Estimated Potential Payments Under Tax Receivable Agreement (Detail) $ in Millions |
Sep. 30, 2017
USD ($)
|
---|---|
Tax Receivable Agreement [Abstract] | |
Estimated future payments under tax receivable agreement | $ 520.8 |
Commitments and Contingencies - Unearned Incentive Income (Detail) $ in Thousands |
9 Months Ended |
---|---|
Sep. 30, 2017
USD ($)
| |
Movement in Unearned Incentive Income | |
December 31, 2016 | $ 96,079 |
Incentive income collected but subject to clawback | 30,024 |
Incentive income recognized | (3,270) |
September 30, 2017 | $ 122,833 |
Commitments and Contingencies - Additional Information (Detail) - USD ($) $ in Millions |
9 Months Ended | |
---|---|---|
Sep. 30, 2017 |
Nov. 19, 2007 |
|
Loss Contingencies [Line Items] | ||
Percentage of tax savings to be paid under Tax Receivable Agreement | 78.00% | 85.00% |
Estimated future payments under tax receivable agreement | $ 520.8 | |
Fund investment commitments | 24.5 | |
Capital commitments by executive managing directors guaranteed by the company | $ 39.9 | |
New York | ||
Loss Contingencies [Line Items] | ||
Non cancelable lease expiration year | 2029 | |
Other Locations | ||
Loss Contingencies [Line Items] | ||
Non cancelable lease expiration year | 2024 |
Segment Information - Och-Ziff Funds Segment Results (Detail) - USD ($) $ in Thousands |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2017 |
Sep. 30, 2016 |
Sep. 30, 2017 |
Sep. 30, 2016 |
|
Oz Funds Segment: | ||||
Revenues | $ 131,999 | $ 148,105 | $ 420,097 | $ 489,105 |
Operating Segments | Oz Funds Segment | ||||
Oz Funds Segment: | ||||
Revenues | 119,390 | 131,101 | 380,999 | 433,542 |
Economic Income | $ 49,768 | $ 52,725 | $ 157,891 | $ (229,800) |
Segment Information - Reconciliation of Oz Funds Segment Revenues to Consolidated Revenues (Detail) - USD ($) $ in Thousands |
3 Months Ended | 9 Months Ended | |||||||
---|---|---|---|---|---|---|---|---|---|
Sep. 30, 2017 |
Sep. 30, 2016 |
Sep. 30, 2017 |
Sep. 30, 2016 |
||||||
Segment Reporting Information [Line Items] | |||||||||
Revenues | $ 131,999 | $ 148,105 | $ 420,097 | $ 489,105 | |||||
Income of consolidated funds | (2,055) | (458) | (3,518) | (1,262) | |||||
Material Reconciling Items | |||||||||
Segment Reporting Information [Line Items] | |||||||||
Adjustment to management fees | [1] | (4,827) | (8,808) | (15,488) | (31,362) | ||||
Adjustment to other revenue | [2] | 141 | 0 | (1,117) | 0 | ||||
Other Operations revenues | (5,868) | (7,738) | (18,975) | (22,939) | |||||
Income of consolidated funds | (2,055) | (458) | (3,518) | (1,262) | |||||
Operating Segments | Oz Funds Segment | |||||||||
Segment Reporting Information [Line Items] | |||||||||
Revenues | $ 119,390 | $ 131,101 | $ 380,999 | $ 433,542 | |||||
|
Segment Information - Reconciliation of Oz Funds Economic Income to Net Income Attributable to Class A Shareholders (Detail) - USD ($) $ in Thousands |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2017 |
Sep. 30, 2016 |
Sep. 30, 2017 |
Sep. 30, 2016 |
|
Segment Reporting Information [Line Items] | ||||
Net Income (Loss) Attributable to Class A Shareholders—GAAP | $ 5,726 | $ 14,285 | $ 11,660 | $ (133,642) |
Change in redemption value of Preferred Units | 0 | 0 | 2,853 | 0 |
Net Income (Loss) Attributable to Och-Ziff Capital Management Group LLC—GAAP | 5,726 | 14,285 | 14,513 | (133,642) |
Income taxes | 1,942 | 9,986 | 17,242 | 39,436 |
Changes in tax receivable agreement liability | 0 | (11,819) | 0 | (11,990) |
Depreciation, amortization and net gains and losses on fixed assets | 7,693 | 14,947 | ||
Material Reconciling Items | ||||
Segment Reporting Information [Line Items] | ||||
Net income (loss) attributable to Group A Units | 9,500 | 16,313 | 41,145 | (187,338) |
Equity-based compensation, net of RSUs settled in cash | 22,128 | 18,298 | 63,566 | 56,311 |
Income taxes | 1,942 | 9,986 | 17,242 | 39,436 |
Allocations to Group D Units | 1,554 | 950 | 4,914 | 2,850 |
Adjustment for expenses related to compensation and profit-sharing arrangements based on fund investment performance | 7,470 | 2,741 | 13,242 | 5,430 |
Changes in tax receivable agreement liability | 0 | (11,819) | 0 | (11,990) |
Depreciation, amortization and net gains and losses on fixed assets | 2,237 | 7,965 | 7,693 | 14,947 |
Other adjustments | (568) | (1,299) | (2,177) | (2,672) |
Other Operations | (221) | (4,695) | (2,247) | (13,132) |
Operating Segments | Oz Funds Segment | ||||
Segment Reporting Information [Line Items] | ||||
Economic Income - Oz Funds Segment | $ 49,768 | $ 52,725 | $ 157,891 | $ (229,800) |
Subsequent Events - Additional Information (Detail) - Subsequent Event |
Nov. 02, 2017
$ / shares
|
---|---|
Subsequent Event [Line Items] | |
Dividends announcement date | Nov. 02, 2017 |
Cash dividend (in dollars per share) | $ 0.02 |
Dividends payable date | Nov. 20, 2017 |
Dividends record date | Nov. 13, 2017 |
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