EX-99.1 2 ozm-20141231xex99xepr.htm 4Q2014 - OZM EARNINGS RELEASE OZM - 2014.12.31-EX99-EPR

Och-Ziff Capital Management Group LLC Reports
2014 Fourth Quarter and Full Year Results
2014 Fourth Quarter Dividend of $0.47 per Class A Share
NEW YORK, February 5, 2015 – Och-Ziff Capital Management Group LLC (NYSE: OZM) (the “Company” or “Och-Ziff”) today reported GAAP net income allocated to Class A Shareholders (“GAAP Net Income”) of $84.7 million, or $0.49 per basic and $0.47 per diluted Class A Share, for the 2014 fourth quarter and $142.4 million, or $0.82 per basic and $0.80 per diluted Class A Share, for the 2014 full year. The Company also declared a $0.47 per share cash dividend on its Class A Shares for the 2014 fourth quarter, bringing its 2014 full year dividend to $1.07 per Class A Share.
Summary Highlights
Distributable Earnings of $255.4 million, or $0.50 per Adjusted Class A Share, for the 2014 fourth quarter, and $590.3 million, or $1.16 per Adjusted Class A Share, for the 2014 full year.
Cash dividend of $0.47 and $1.07 per Class A Share for the 2014 fourth quarter and 2014 full year, respectively.
Assets under management totaled $47.5 billion as of December 31, 2014, increasing 18% year-over-year. Estimated assets under management totaled $46.7 billion as of February 1, 2015.
Longer-dated assets under management, which are those subject to initial commitment periods of three years or longer, were $15.2 billion, or 31.9% of the Company’s total assets under management as of December 31, 2014, increasing 42% year-over-year.
Assets under management in the Company’s dedicated credit, real estate and other single-strategy funds were $13.4 billion, comprising 28% of assets under management as of December 31, 2014, increasing 59% year-over-year.
Assets under management in the Company’s multi-strategy products totaled $34.1 billion as of December 31, 2014, increasing 7% year-over-year.
OZ Master Fund, the Company’s global multi-strategy fund, generated a net return of 5.5% for the 2014 full-year, and an annualized net return since inception of 12.8%(1). For January 2015, the estimated net return was 0.8%. Assets under management for the fund were $27.9 billion as of December 31, 2014, increasing 11% year-over-year.
Assets under management in the Company’s dedicated credit products totaled $10.3 billion as of December 31, 2014, increasing 49% year-over-year.
Assets under management in the Company’s opportunistic credit funds were $5.1 billion as of December 31, 2014, increasing 18% year-over-year.



OZ Credit Opportunities Master Fund, the Company’s global opportunistic credit fund, generated a net return of 8.9% for the 2014 full-year, and an annualized net return since inception of 18.0%. Assets under management for the fund were $1.2 billion, increasing 139% year-over-year.
Assets under management in Institutional Credit Strategies, the Company’s asset management platform that invests in performing credits, were $5.2 billion as of December 31, 2014, increasing 98% year-over-year.
Assets under management in the Company’s real estate funds totaled $2.0 billion as of December 31, 2014, increasing 108% year-over-year.
The year-over-year increase was driven by the $1.5 billion closing of Och-Ziff Real Estate Fund III.
Och-Ziff Real Estate Fund II finished its investment period in 2014. Since inception, the net IRR for the fund was 22.8% through December 31, 2014.
_______________
(1)
Please see Exhibit 7 that accompanies this press release for additional information regarding the returns of the OZ Master Fund.
“2014 was a strong year for our firm, as demonstrated by the growth and diversification we achieved in our business,” said Daniel S. Och, Chairman and Chief Executive Officer of Och-Ziff. “We delivered strong, risk-adjusted returns across all our funds, and our credit and real estate funds generated strong performance, which is highly valued by our fund investors. Our returns reflect the extensive investing expertise and global scale we have within each of our strategies. The significant synergies between our strategies enable us to offer a broad range of products and innovative solutions to meet the objectives of our fund investors.
“We are excited about the opportunities in the coming year, and feel that the momentum across our business is greater than it ever has been. Our success to date has created more opportunities for our investors and, therefore, more opportunities to grow and diversify our business. We believe that we are well positioned for strong asset growth, greater diversification among our strategies, and deeper relationships with our investors. Combined, these elements position us for future strong earnings and dividend growth.”
GAAP NET INCOME ALLOCATED TO CLASS A SHAREHOLDERS
For the 2014 fourth quarter, Och-Ziff reported GAAP Net Income of $84.7 million, or $0.49 per basic and $0.47 per diluted Class A Share, compared to $199.1 million, or $1.21 per basic and $1.13 per diluted Class A Share, for the 2013 fourth quarter. For the 2014 full year, Och-Ziff reported GAAP Net Income of $142.4 million, or $0.82 per basic and $0.80 per diluted Class A Share, compared to $261.8 million, or $1.68 per basic and $1.62 per diluted Class A Share, for the 2013 full year.
The year-over-year decreases in the Company’s fourth quarter and full year GAAP results were primarily due to lower incentive income, partially offset by higher management fees, as well as lower compensation expenses.
The Company’s GAAP results in the 2014 fourth quarter and full year included equity-based compensation expenses of $30.1 million and $114.7 million, respectively. These expenses primarily relate to Och-Ziff Operating Group A Units (“Group A Units”), which represent equity interests in the Company’s principal operating subsidiaries (the “Och-Ziff Operating Group”), granted to executive managing directors, as well as Class A Restricted Share Units (“RSUs”) granted to employees and executive managing directors. Each RSU represents the right to receive one Class A Share upon vesting. Vested Group A Units may be exchanged on a one-to-one basis for Class A Shares, subject to transfer restrictions and minimum retained ownership requirements.


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Throughout this press release, the Company presents financial measures that are not prepared in accordance with GAAP. For a discussion of these non-GAAP measures, please see the section titled “Non-GAAP Financial Measures” at the end of this press release.
DISTRIBUTABLE EARNINGS (NON-GAAP)
The Company’s Distributable Earnings for the 2014 fourth quarter were $255.4 million, or $0.50 per Adjusted Class A Share, 54% lower than $559.0 million, or $1.15 per Adjusted Class A Share, for the 2013 fourth quarter. Distributable Earnings for the 2014 full year were $590.3 million, or $1.16 per Adjusted Class A Share, 35% lower than $903.6 million, or $1.87 per Adjusted Class A Share, for the 2013 full year.
The year-over-year decreases in Distributable Earnings for both periods were primarily due to lower incentive income, partially offset by higher management fees, as well as lower compensation and benefits expenses and income taxes. Please see the “Economic Income (Non-GAAP)” section of this press release for a discussion of the drivers impacting the Company’s revenues and operating expenses.
Distributable Earnings is a non-GAAP measure. For reconciliations of Distributable Earnings to the respective GAAP Net Income for the periods discussed above, please see Exhibits 2 and 3 that accompany this press release. Additionally, please see the section titled “Non-GAAP Financial Measures” at the end of this press release, including the definitions of Distributable Earnings and Adjusted Class A Shares.
ASSETS UNDER MANAGEMENT
Rounding differences may occur.
 
 
 
 
 
Year-Over-Year Change
(dollars in billions)
December 31, 2014
 
December 31, 2013
 
Inflows / (Outflows)
 
Distributions / Other Reductions
 
Appreciation / (Depreciation)
 
Total
 
%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Multi-strategy funds
$
34.1

 
$
31.8

 
$
0.8

 
$

 
$
1.5

 
$
2.3

 
7
%
Credit
 
 
 
 
 
 
 
 
 
 
 
 
 
Opportunistic credit funds
5.1

 
4.3

 
0.7

 
(0.5
)
 
0.5

 
0.8

 
18
%
Institutional Credit Strategies
5.2

 
2.6

 
2.6

 

 

 
2.6

 
98
%
Real estate funds
2.0

 
1.0

 
1.5

 
(0.4
)
 

 
1.1

 
108
%
Other
1.1

 
0.6

 
0.5

 

 
0.1

 
0.6

 
95
%
Total
$
47.5

 
$
40.2

 
$
6.1

 
$
(0.9
)
 
$
2.1

 
$
7.3

 
18
%
As of December 31, 2014, assets under management totaled $47.5 billion, an increase of $7.3 billion, or 18%, from December 31, 2013, which was driven by capital net inflows of $5.2 billion and performance-related appreciation of $2.1 billion. During the month of December, the Company had approximately $231.5 million of intra-month capital net inflows, which are included in the $47.5 billion of assets under management as of December 31, 2014.
Assets under management decreased to an estimated $46.7 billion as of February 1, 2015. This decrease reflected estimated performance-related appreciation of approximately $255.8 million in January and capital net outflows of approximately $1.1 billion, which was comprised of approximately $1.5 billion of capital net outflows on January 1, 2015 and approximately $403.1 million of capital net inflows from January 2, 2015 to February 1, 2015.


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Please see detailed assets under management and fund information on Exhibits 6 and 7 that accompany this press release.
Multi-strategy funds
Assets under management in the Company’s multi-strategy funds totaled $34.1 billion as of December 31, 2014, increasing $2.3 billion, or 7%, year-over-year. Of this amount, $1.5 billion was due to performance-related appreciation, driven by the performance of the OZ Master Fund, which generated a net return of 5.5% for the 2014 full year. During 2014, the performance of this fund was driven by its long/short equity special situations strategy in the U.S. and credit-related strategies globally.
The remaining increase was due to net capital activity of $828.1 million. Approximately $1.3 billion of capital net inflows to the OZ Master Fund, the Company’s global multi-strategy fund, was partially offset by capital net outflows in the OZ Europe Master Fund and certain other multi-strategy funds.
Credit
During 2014, the Company continued to expand its dedicated credit offerings in both its opportunistic credit funds and Institutional Credit Strategies. Assets under management in the Company’s credit products totaled $10.3 billion as of December 31, 2014, increasing $3.4 billion, or 49%, year-over-year.
Opportunistic credit
The Company’s opportunistic credit funds seek to generate risk-adjusted returns by capturing value in mispriced investments across disrupted, dislocated and distressed corporate, structured and private credit markets globally.
Assets under management in the Company’s opportunistic credit funds totaled $5.1 billion as of December 31, 2014, increasing $793.2 million year-over-year. Of this amount, $546.0 million was due to performance-related appreciation and $247.2 million in net capital activity. The performance-related appreciation was driven by strong investment performance across all of these funds and platforms, including the OZ Credit Opportunities Master Fund, the Company’s global opportunistic credit fund, which generated a net return of 8.9% for the 2014 full year.
The net capital activity of $247.2 million was driven by capital net inflows of $627.3 million into the OZ Credit Opportunities Master Fund, partially offset by a return of capital to investors in the Company’s closed-ended opportunistic credit funds.
Institutional Credit Strategies
Institutional Credit Strategies is the Company’s 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 for clients.
Assets under management in Institutional Credit Strategies totaled $5.2 billion as of December 31, 2014, increasing $2.6 billion, or 98%, year-over-year. The increase was primarily driven by four CLOs that closed in 2014. Institutional Credit Strategies managed nine CLOs as of December 31, 2014.


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Real estate funds
Assets under management in the Company’s real estate funds totaled $2.0 billion as of December 31, 2014, increasing $1.1 billion, or 108%, year-over-year. The increase in assets under management was driven by the launch of Och-Ziff Real Estate Fund III in 2014 with total fund investor commitments of $1.5 billion. The year-over-year increase in assets under management also reflected a $334.9 million reduction resulting from the expiration of the investment period for Och-Ziff Real Estate Fund II. Since inception, the net IRR for Och-Ziff Real Estate Fund II (for which the investment period ended in 2014) was 22.8% through December 31, 2014. Since inception, the net IRR for Och-Ziff Real Estate Fund I (for which the investment period ended in 2010) was 15.3% through December 31, 2014.
ECONOMIC INCOME (NON-GAAP)
In addition to analyzing the Company’s results on a GAAP basis, management also reviews the Company’s results on an “Economic Income” basis. Economic Income excludes certain adjustments that are required for presentation of the Company’s results on a GAAP basis, but that management does not consider when evaluating operating performance in any given period.
For reconciliations of Economic Income and its components to the respective GAAP measures, please see Exhibits 2 through 5 that accompany this press release. Additionally, please see the discussion of “Non-GAAP Financial Measures” at the end of this press release.
Economic Income Revenues (Non-GAAP)
Economic Income revenues for the 2014 fourth quarter were $592.4 million, a 43% decrease from $1.0 billion for the 2013 fourth quarter. Management fees were $166.7 million, 14% higher than $146.3 million for the prior-year period. Incentive income was $425.3 million, 52% lower than the $886.1 million for the prior-year period.
Economic Income revenues for the 2014 full year were $1.2 billion, 26% lower than $1.6 billion for the 2013 full year. Management fees were $649.3 million, up 19% from $545.8 million for the prior-year period. Incentive income was $559.2 million, 48% lower than the $1.1 billion for the prior-year period.
The year-over-year decrease in Economic Income revenues for the quarter-to-date and year-to-date periods was primarily due to lower incentive income, which was driven by lower year-over-year performance across the Company’s funds. These decreases were partially offset by higher management fees resulting from the year-over-year growth in assets under management, which was driven by a combination of capital net inflows and performance-related appreciation.
The average management fee rate was 1.43% for the 2014 fourth quarter, compared to 1.52% for the 2013 fourth quarter, and 1.46% for the 2014 full year, compared to 1.53% for the 2013 full year. These declines were due primarily to an increase in assets under management in the Company’s Institutional Credit Strategies, which earn lower management fees as is reflective of the market for CLOs. The Company’s average management fee will vary from quarter to quarter based on the mix of products that drive the growth in its assets under management.
Compensation and Benefits (Non-GAAP)
Compensation and benefits for the 2014 fourth quarter totaled $257.2 million, down 22% from $329.8 million for the 2013 fourth quarter. Salaries and benefits were $26.8 million, 12% higher than


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$23.9 million in the prior-year period. Cash bonus expense for the 2014 fourth quarter totaled $230.4 million, compared to $305.9 million for the prior-year period.
Compensation and benefits for the 2014 full year totaled $358.6 million, a 12% decrease from $406.1 million in the prior-year period. Salaries and benefits totaled $103.7 million, 15% higher than $90.0 million in the prior-year period. Cash bonus expense for the 2014 full year totaled $254.9 million, compared to $316.1 million for the prior-year period.
The year-over-year decreases in compensation and benefits for both periods were primarily driven by lower discretionary cash bonus expense due to lower incentive income. Salaries and benefits partially offset the year-over-year decreases in compensation and benefits due to the Company’s hiring activities globally.
The ratio of salaries and benefits to management fees was 16% for each of the 2014 fourth quarter and full year and 2013 fourth quarter and full year, respectively. The ratio of cash bonus expense to total annual revenues was 21% for the 2014 full year, compared to 19% for the 2013 full year.
Non-Compensation Expenses (Non-GAAP)
Non-compensation expenses for the 2014 fourth quarter totaled $35.0 million, up 10% from $31.9 million in the prior-year period. Non-compensation expenses for the 2014 full year totaled $126.1 million, essentially unchanged from $125.9 million for the prior-year period.
The year-over-year increase for the quarter-to-date period was driven by higher infrastructure and insurance costs, as well as higher interest expense. For the year-to-date period, higher infrastructure and insurance costs were mostly offset by lower professional services fees.
The ratio of non-compensation expenses to management fees was 21% for the 2014 fourth quarter, compared to 22% for 2013 fourth quarter, and 19% for the 2014 full year, compared to 23% for the 2013 full year.
Economic Income (Non-GAAP)
Economic Income for the 2014 fourth quarter was $300.2 million, down from $671.7 million for the 2013 fourth quarter. Economic Income for the 2014 full year was $729.9 million, down from $1.1 billion for the 2013 full year.
The year-over-year decreases in Economic Income for both periods were primarily due to lower incentive income, partially offset by higher management fees and lower compensation and benefits costs.
CAPITAL
As of December 31, 2014, the number of Class A Shares outstanding was 175,946,555. For purposes of calculating Distributable Earnings per Share, the Company assumes that all the interests held by its executive managing directors and Ziff Investors Partnership, L.P. II and certain of its affiliates and control persons (the “Ziffs”) (until the Ziffs exchanged their remaining interests during the 2014 second quarter) in the Och-Ziff Operating Group (collectively, “Partner Units”), as well as RSUs outstanding during the applicable period, have been converted on a one-to-one basis into Class A Shares (“Adjusted Class A Shares”). For the fourth quarter and full year ended December 31, 2014, the total weighted-average Adjusted Class A Shares outstanding were 510,556,917 and 508,540,554, respectively.


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DIVIDEND
The Board of Directors of Och-Ziff declared a 2014 fourth-quarter dividend of $0.47 per Class A Share. The dividend is payable on February 24, 2015 to holders of record as of the close of business on February 17, 2015.
For U.S. federal income tax purposes, the dividend will be treated as a partnership distribution. Based on the best information currently available, the Company estimates that when calculating withholding taxes, $0.13 of the 2014 fourth-quarter dividend will be treated as U.S. source dividend income and $0.0939 will be treated as U.S. source interest income.
Non-U.S. holders of Class A Shares are generally subject to U.S. federal withholding tax at a rate of 30% (subject to reduction by applicable treaty or other exception) on their share of U.S. source dividends and certain other types of U.S. source income realized by the Company. With respect to interest, however, no withholding is generally required if proper certification (on an IRS Form W-8) of a beneficial owner’s foreign status has been filed with the withholding agent. Non-U.S. holders must generally provide the withholding agent with a properly completed IRS Form W-8 to obtain any reduction in withholding.
*            *            *             *
The Company will host a conference call today, February 5, 2015, at 8:30 a.m. Eastern Time to discuss its 2014 fourth-quarter results. The call will be open to the public and can be accessed by dialing +1-888-679-8035 (callers inside the U.S.) or +1-617-213-4848 (callers outside the U.S.). The number should be dialed at least ten minutes prior to the start of the call and the passcode will be 16981194. A simultaneous webcast of the call will be available to the public on a listen-only basis through the Public Investors section of the Company’s website (www.ozcap.com).
For those unable to listen to the live broadcast, a replay will be available by dialing +1-888-286-8010 (callers inside the U.S.) or +1-617-801-8888 (callers outside the U.S.), passcode 40815671, beginning approximately two hours after the event for two weeks. A webcast replay of the event will also be available on the Company’s website as noted above.
*            *            *             *
Non-GAAP Financial Measures
Management evaluates Economic Income for the Och-Ziff Funds segment, the Company’s only reportable segment under GAAP, and for the Company’s Other Operations. Economic Income for the Company equals the sum of Economic Income for the Och-Ziff Funds segment and the Company’s Other Operations.
The Company conducts substantially all of its business through the Och-Ziff Funds segment, which provides asset management services to its multi-strategy, opportunistic credit and equity funds, Institutional Credit Strategies and other alternative investment vehicles. The Company’s Other Operations are primarily comprised of its real estate business, which provides asset management services to its real estate funds.
The Company’s non-GAAP measures should not be considered as alternatives to the Company’s GAAP Net Income or cash flow from operations, or as indicative of liquidity or the cash available to fund operations. The Company’s non-GAAP measures may not be comparable to similarly titled measures used by other companies.


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For reconciliations of the Company’s non-GAAP measures to the most directly comparable GAAP measures, please see Exhibits 2 through 5 that accompany this press release.
Economic Income
In addition to analyzing the Company’s results on a GAAP basis, management also reviews the Company’s results on an “Economic Income” basis. Economic Income excludes the adjustments described below that are required for presentation of the Company’s results on a GAAP basis, but that management does not consider when evaluating the operating performance of the Company in any given period. Management uses Economic Income as the basis on which it evaluates the financial performance of the Company and makes resource allocation and other operating decisions. Management considers it important that investors review the same operating information that it uses.
Economic Income is a measure of pre-tax operating performance that excludes the following from the Company’s results on a GAAP basis:
Income allocations to the Company’s executive managing directors and the Ziffs (until they exchanged their remaining interests during the 2014 second quarter) on their direct interests in the Och-Ziff Operating Group. Management reviews operating performance at the Och-Ziff Operating Group level, where substantially all of the Company’s operations are performed, prior to making any income allocations.
Reorganization expenses related to the Company’s IPO, equity-based compensation expenses and depreciation and amortization expenses, as management does not consider these non-cash expenses to be reflective of operating performance. However, the fair value of RSUs that are settled in cash to employees or executive managing directors is included as an expense at the time of settlement.
Changes in the tax receivable agreement liability and net gains (losses) on investments in Och-Ziff funds, as management does not consider these items to be reflective of operating performance.
Amounts related to the consolidated Och-Ziff funds, including the related eliminations of management fees and incentive income, as management reviews the total amount of management fees and incentive income earned in relation to total assets under management and fund performance. The Company also defers the recognition of incentive income allocations from the consolidated Och-Ziff funds until all clawback contingencies are resolved, consistent with the revenue recognition policy for the funds the Company does not consolidate.
In addition, expenses related to compensation and profit-sharing arrangements based on fund investment performance are recognized at the end of the relevant commitment period, as management reviews the total compensation expense related to these arrangements in relation to any incentive income earned by the relevant fund.
As a result of the adjustments described above, as well as an adjustment to present management fees net of recurring placement and related service fees (rather than considering these fees an expense), management fees, incentive income, compensation and benefits, non-compensation expenses and net income allocated to noncontrolling interests as presented on an Economic Income basis are also non-GAAP measures.
Distributable Earnings
Distributable Earnings is a non-GAAP measure of after-tax operating performance and equals Economic Income less Adjusted Income Taxes. Adjusted Income Taxes are estimated assuming the conversion of all outstanding Partner Units into Class A Shares, on a one-to-one basis, and include the impact of payments


8


under the tax receivable agreement. Therefore, all income (loss) of the Och-Ziff Operating Group allocated to the Partner Units is treated as if it were allocated to Och-Ziff Capital Management Group LLC. Partner Units represent interests in the Och-Ziff Operating Group held by the Company’s executive managing directors and the Ziffs (until they exchanged their remaining interests during the 2014 second quarter), including the Group A Units and Group D Units. Distributable Earnings per Share is equal to Distributable Earnings divided by the weighted-average number of Adjusted Class A Shares.
Management believes Distributable Earnings provides useful information to investors because it uses Distributable Earnings, among other financial information, to determine the earnings available to distribute as dividends to holders of the Company’s Class A Shares and to the Company’s executive managing directors with respect to their Partner Units.
*            *            *            *
Forward-Looking Statements
This press release may contain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, that reflect the Company’s current views with respect to, among other things, future events and financial performance. The Company generally identifies forward-looking statements by terminology such as “outlook,” “believe,” “expect,” “potential,” “continue,” “may,” “will,” “should,” “could,” “seek,” “approximately,” “predict,” “intend,” “plan,” “estimate,” “anticipate,” “opportunity,” “comfortable,” “assume,” “remain,” “maintain,” “sustain,” “achieve,” “see,” “think,” “position” or the negative version of those words or other comparable words.
Any forward-looking statements contained in this press release are based upon historical information and on the Company’s current plans, estimates and expectations. The inclusion of this or other forward-looking information should not be regarded as a representation by the Company or any other person that the future plans, estimates or expectations contemplated by the Company will be achieved. We caution that forward-looking statements are subject to numerous assumptions, estimates, risks and uncertainties, including but not limited to the following: global economic, business, market and geopolitical conditions; U.S. and foreign regulatory developments relating to, among other things, financial institutions and markets, government oversight, fiscal and tax policy; conditions impacting the alternative asset management industry; the Company’s ability to successfully compete for fund investors, assets, professional talent and investment opportunities; the Company’s ability to retain its active executive managing directors, managing directors and other investment professionals; the Company’s successful formulation and execution of its business and growth strategies; the Company’s ability to appropriately manage conflicts of interest and tax and other regulatory factors relevant to its business; and assumptions relating to the Company’s operations, investment performance, financial results, financial condition, business prospects, growth strategy and liquidity.
If one or more of these or other risks or uncertainties materialize, or if the Company assumptions or estimates prove to be incorrect, its actual results may vary materially from those indicated in these statements. These factors are not and should not be construed as exhaustive and should be read in conjunction with the other cautionary statements and risks that are included in the Company’s filings with the U.S. Securities and Exchange Commission (“SEC”), including but not limited to the Company’s annual report on Form 10-K for the year ended December 31, 2013, filed on March 18, 2014, and the Company’s subsequently filed quarterly reports on Form 10-Q. There may be additional risks, uncertainties and factors that the Company does not currently view as material or that are not known. The forward-looking statements contained in this press


9


release are made only as of the date of this press release. The Company does not undertake to update any forward-looking statement because of new information, future developments or otherwise.
This press release does not constitute an offer of any Och-Ziff fund.
*            *            *            *
About Och-Ziff Capital Management Group LLC
Och-Ziff Capital Management Group LLC is one of the largest institutional alternative asset managers in the world with offices in New York, London, Hong Kong, Mumbai, Beijing, Dubai and Shanghai. Och-Ziff provides asset management services to investors globally through its multi-strategy, opportunistic credit, real estate and equity funds, Institutional Credit Strategies and other alternative investment vehicles. Och-Ziff seeks to generate consistent, positive, absolute returns across market cycles, with low volatility compared to the broader markets, and with an emphasis on preservation of capital. Och-Ziff’s funds invest across multiple strategies and geographies, consistent with the investment objectives for each fund. The global investment strategies Och-Ziff employs include convertible and derivative arbitrage, corporate credit, long/short equity special situations, merger arbitrage, private investments, real estate and structured credit. As of February 1, 2015, Och-Ziff had approximately $46.7 billion in assets under management. For more information, please visit Och-Ziff’s website (www.ozcap.com).
Investor Relations Contact:
Tina Madon
Managing Director
Head of Investor Relations
Och-Ziff Capital Management Group LLC
+1-212-719-7381
tina.madon@ozcap.com
Media Relations Contact:
George Sard or Jonathan Gasthalter
Sard Verbinnen & Co
+1-212-687-8080


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EXHIBIT 1
OCH-ZIFF CAPITAL MANAGEMENT GROUP LLC
Consolidated Statements of Comprehensive Income (Unaudited)
(dollars in thousands, except per share amounts)
 
 
 
 
 
Three Months Ended December 31,
 
Year Ended December 31,
 
2014
 
2013
 
2014
 
2013
Revenues
 
 
 
 
 
 
 
Management fees
$
169,514

 
$
149,598

 
$
664,221

 
$
556,427

Incentive income
416,239

 
881,144

 
507,261

 
1,076,547

Other revenues
372

 
764

 
1,303

 
2,150

Income of consolidated Och-Ziff funds
101,525

 
69,275

 
369,499

 
260,799

Total Revenues
687,650

 
1,100,781

 
1,542,284

 
1,895,923

 
 
 
 
 
 
 
 
Expenses
 
 
 
 
 
 
 
Compensation and benefits
286,048

 
365,133

 
492,712

 
554,069

Reorganization expenses
4,018

 
4,023

 
16,083

 
16,087

Interest expense
3,119

 
1,719

 
8,166

 
7,011

General, administrative and other
30,497

 
33,883

 
132,800

 
149,874

Expenses of consolidated Och-Ziff funds
58,673

 
29,029

 
185,888

 
99,838

Total Expenses
382,355

 
433,787

 
835,649

 
826,879

 
 
 
 
 
 
 
 
Other Income
 
 
 
 
 
 
 
Net gains on investments in Och-Ziff funds and joint ventures
50

 
713

 
5,999

 
1,966

Net gains of consolidated Och-Ziff funds
22,228

 
94,408

 
137,726

 
280,502

Total Other Income
22,278

 
95,121

 
143,725

 
282,468

 
 
 
 
 
 
 
 
Income Before Income Taxes
327,573

 
762,115

 
850,360

 
1,351,512

Income taxes
48,019

 
45,293

 
139,048

 
95,687

Consolidated and Total Comprehensive Net Income
$
279,554

 
$
716,822

 
$
711,312

 
$
1,255,825

 
 
 
 
 
 
 
 
Allocation of Consolidated and Total Comprehensive Net Income
 
 
 
 
 
 
 
Class A Shareholders
$
84,675

 
$
199,062

 
$
142,445

 
$
261,767

Noncontrolling interests
191,392

 
514,667

 
535,288

 
985,823

Redeemable noncontrolling interests
3,487

 
3,093

 
33,579

 
8,235

 
$
279,554

 
$
716,822

 
$
711,312

 
$
1,255,825

 
 
 
 
 
 
 
 
Earnings Per Class A Share
 
 
 
 
 
 
 
Basic
$
0.49

 
$
1.21

 
$
0.82

 
$
1.68

Diluted
$
0.47

 
$
1.13

 
$
0.80

 
$
1.62

 
 
 
 
 
 
 
 
Weighted-Average Class A Shares Outstanding
 
 
 
 
 
 
 
Basic
173,740,719

 
164,402,184

 
172,843,926

 
155,994,389

Diluted
179,862,242

 
478,231,474

 
178,179,112

 
468,442,690








EXHIBIT 2
OCH-ZIFF CAPITAL MANAGEMENT GROUP LLC
Reconciliation of Non-GAAP Measures to the Respective GAAP Measures (Unaudited)
(dollars in thousands, except per share amounts)
 
 
 
 
 
 
 
Three Months Ended December 31, 2014
 
Three Months Ended December 31, 2013
 
 
Och-Ziff
Funds Segment
 
Other Operations
 
Total
Company
 
Och-Ziff
Funds Segment
 
Other Operations
 
Total
Company
Net income (loss) allocated to Class A Shareholders—GAAP
 
$
59,480

 
$
25,195

 
$
84,675

 
$
211,257

 
$
(12,195
)
 
$
199,062

Net income allocated to the Och-Ziff Operating Group A Units
 
185,285

 

 
185,285

 
409,671

 

 
409,671

Equity-based compensation, net of RSUs settled in cash
 
18,966

 
771

 
19,737

 
20,699

 

 
20,699

Income taxes
 
48,019

 

 
48,019

 
45,293

 

 
45,293

Adjustment for incentive income allocations from consolidated funds subject to clawback
 
(705
)
 
(35,644
)
 
(36,349
)
 
(12,037
)
 
(2,301
)
 
(14,338
)
Allocations to Och-Ziff Operating Group D Units
 
10,942

 
1,650

 
12,592

 
14,364

 

 
14,364

Adjustment for expenses related to compensation and profit-sharing arrangements based on fund investment performance
 
(7,202
)
 
3,700

 
(3,502
)
 
(7,603
)
 
7,854

 
251

Reorganization expenses
 
4,018

 

 
4,018

 
4,023

 

 
4,023

Changes in tax receivable agreement liability
 
(15,911
)
 

 
(15,911
)
 
(7,467
)
 

 
(7,467
)
Depreciation and amortization
 
1,562

 
190

 
1,752

 
1,719

 
188

 
1,907

Other adjustments
 
(78
)
 
(78
)
 
(156
)
 
(144
)
 
(1,573
)
 
(1,717
)
Economic Income—Non-GAAP
 
$
304,376

 
$
(4,216
)
 
300,160

 
$
679,775

 
$
(8,027
)
 
671,748

Adjusted Income Taxes—Non-GAAP(1)
 
 
 
(44,749
)
 
 
 
 
 
(112,763
)
Distributable Earnings—Non-GAAP
 
 
 
$
255,411

 
 
 
 
 
$
558,985

 
 
 
 
 
 
 
 
 
 
 
Weighted-Average Class A Shares Outstanding
 
 
 
173,740,719

 
 
 
 
 
164,402,184

Weighted-Average Partner Units
 
 
 
320,911,117

 
 
 
 
 
307,499,757

Weighted-Average Class A Restricted Share Units (RSUs)
 
 
 
15,905,081

 
 
 
 
 
15,075,850

Weighted-Average Adjusted Class A Shares
 
 
 
510,556,917

 
 
 
 
 
486,977,791

 
 
 
 
 
 
 
 
 
 
 
Distributable Earnings Per Adjusted Class A Share—Non-GAAP
 
 
 
$
0.50

 
 
 
 
 
$
1.15

(1)
Presents an estimate of income tax expense by assuming the conversion of all Partner Units into Class A Shares, on a one-to-one basis, as well as the impact of payments under the tax receivable agreement. Therefore, all income (loss) of the Och-Ziff Operating Group allocated to the Partner Units is treated as if it were allocated to Och-Ziff Capital Management Group LLC.







EXHIBIT 3
OCH-ZIFF CAPITAL MANAGEMENT GROUP LLC
Reconciliation of Non-GAAP Measures to the Respective GAAP Measures (Unaudited)
(dollars in thousands, except per share amounts)
 
 
 
 
 
 
 
Year Ended December 31, 2014
 
Year Ended December 31, 2013
 
 
Och-Ziff
Funds Segment
 
Other Operations
 
Total
Company
 
Och-Ziff
Funds Segment
 
Other Operations
 
Total
Company
Net income allocated to Class A Shareholders—GAAP
 
$
115,698

 
$
26,747

 
$
142,445

 
$
260,612

 
$
1,155

 
$
261,767

Net income allocated to the Och-Ziff Operating Group A Units
 
365,793

 

 
365,793

 
616,843

 

 
616,843

Equity-based compensation, net of RSUs settled in cash
 
102,505

 
1,829

 
104,334

 
120,125

 

 
120,125

Income taxes
 
138,938

 
110

 
139,048

 
95,687

 

 
95,687

Adjustment for incentive income allocations from consolidated funds subject to clawback
 
(21,099
)
 
(11,638
)
 
(32,737
)
 
(23,656
)
 
(16,481
)
 
(40,137
)
Allocations to Och-Ziff Operating Group D Units
 
25,360

 
1,650

 
27,010

 
19,954

 

 
19,954

Adjustment for expenses related to compensation and profit-sharing arrangements based on fund investment performance
 

 
2,816

 
2,816

 

 
7,854

 
7,854

Reorganization expenses
 
16,083

 

 
16,083

 
16,087

 

 
16,087

Changes in tax receivable agreement liability
 
(40,383
)
 

 
(40,383
)
 
(8,514
)
 

 
(8,514
)
Depreciation and amortization
 
6,242

 
748

 
6,990

 
7,503

 
748

 
8,251

Other adjustments
 
(1,137
)
 
(319
)
 
(1,456
)
 
(405
)
 
1,184

 
779

Economic Income—Non-GAAP
 
$
708,000

 
$
21,943

 
729,943

 
$
1,104,236

 
$
(5,540
)
 
1,098,696

Adjusted Income Taxes—Non-GAAP(1)
 
 
 
(139,599
)
 
 
 
 
 
(195,054
)
Distributable Earnings—Non-GAAP
 
 
 
$
590,344

 
 
 
 
 
$
903,642

 
 
 
 
 
 
 
 
 
 
 
Weighted-Average Class A Shares Outstanding
 
 
 
172,843,926

 
 
 
 
 
155,994,389

Weighted-Average Partner Units
 
 
 
320,831,550

 
 
 
 
 
312,909,023

Weighted-Average Class A Restricted Share Units (RSUs)
 
 
 
14,865,078

 
 
 
 
 
13,588,565

Weighted-Average Adjusted Class A Shares
 
 
 
508,540,554

 
 
 
 
 
482,491,977

 
 
 
 
 
 
 
 
 
 
 
Distributable Earnings Per Adjusted Class A Share—Non-GAAP
 
 
 
$
1.16

 
 
 
 
 
$
1.87

(1)
Presents an estimate of income tax expense by assuming the conversion of all Partner Units into Class A Shares, on a one-to-one basis, as well as the impact of payments under the tax receivable agreement. Therefore, all income (loss) of the Och-Ziff Operating Group allocated to the Partner Units is treated as if it were allocated to Och-Ziff Capital Management Group LLC.







EXHIBIT 4
OCH-ZIFF CAPITAL MANAGEMENT GROUP LLC
Components of Economic Income and Reconciliation of These Non-GAAP Measures to the Respective GAAP Measures (Unaudited)
(dollars in thousands)
 
 
 
 
 
 
 
Three Months Ended December 31, 2014
 
Three Months Ended December 31, 2013
 
 
Och-Ziff
Funds Segment
 
Other Operations
 
Total
Company
 
Och-Ziff
Funds Segment
 
Other Operations
 
Total
Company
Management fees—GAAP
 
$
164,549

 
$
4,965

 
$
169,514

 
$
146,929

 
$
2,669

 
$
149,598

Adjustment to management fees(1)
 
(2,782
)
 

 
(2,782
)
 
(3,263
)
 

 
(3,263
)
Management Fees—Economic Income Basis—Non-GAAP
 
161,767

 
4,965

 
166,732

 
143,666

 
2,669

 
146,335

 
 
 
 
 
 
 
 
 
 
 
 
 
Incentive income—GAAP
 
416,239

 

 
416,239

 
881,144

 

 
881,144

Adjustment to incentive income(2)
 
7,161

 
1,917

 
9,078

 
4,917

 

 
4,917

Incentive Income—Economic Income Basis—Non-GAAP
 
423,400

 
1,917

 
425,317

 
886,061

 

 
886,061

Other revenues
 
365

 
7

 
372

 
757

 
7

 
764

Total Revenues—Economic Income Basis—Non-GAAP
 
$
585,532

 
$
6,889

 
$
592,421

 
$
1,030,484

 
$
2,676

 
$
1,033,160

 
 
 
 
 
 
 
 
 
 
 
 
 
Compensation and benefits—GAAP
 
$
269,349

 
$
16,699

 
$
286,048

 
$
347,662

 
$
17,471

 
$
365,133

Adjustment to compensation and benefits(3)
 
(22,707
)
 
(6,120
)
 
(28,827
)
 
(27,460
)
 
(7,854
)
 
(35,314
)
Compensation and Benefits—Economic Income Basis—Non-GAAP
 
$
246,642

 
$
10,579

 
$
257,221

 
$
320,202

 
$
9,617

 
$
329,819

 
 
 
 
 
 
 
 
 
 
 
 
 
Interest expense and general, administrative and other expenses—GAAP
 
$
32,902

 
$
714

 
$
33,616

 
$
34,570

 
$
1,032

 
$
35,602

Adjustment to interest expense and general, administrative and other expenses(4)
 
1,614

 
(188
)
 
1,426

 
(3,485
)
 
(189
)
 
(3,674
)
Non-Compensation Expenses—Economic Income Basis—Non-GAAP
 
$
34,516

 
$
526

 
$
35,042

 
$
31,085

 
$
843

 
$
31,928

 
 
 
 
 
 
 
 
 
 
 
 
 
Net gains on investments in Och-Ziff funds and joint ventures—GAAP
 
$
50

 
$

 
$
50

 
$
713

 
$

 
$
713

Adjustment to net gains on investments in Och-Ziff funds and joint ventures(5)
 
(50
)
 

 
(50
)
 
(140
)
 

 
(140
)
Net Gains on Joint Ventures—GAAP
 
$

 
$

 
$

 
$
573

 
$

 
$
573

 
 
 
 
 
 
 
 
 
 
 
 
 
Net income (loss) allocated to noncontrolling interests—GAAP
 
$
197,611

 
$
(6,219
)
 
$
191,392

 
$
452,935

 
$
61,732

 
$
514,667

Adjustment to net income allocated to noncontrolling interests(6)
 
(197,613
)
 
6,219

 
(191,394
)
 
(452,940
)
 
(61,489
)
 
(514,429
)
Net Income (Loss) Allocated to Noncontrolling Interests—Economic Income Basis—Non-GAAP
 
$
(2
)
 
$

 
$
(2
)
 
$
(5
)
 
$
243

 
$
238

(1)
Adjustment to present management fees net of recurring placement and related service fees, as management considers these fees a reduction in management fees, not an expense. The impact of eliminations related to the consolidated Och-Ziff funds is also removed.
(2)
Adjustment to exclude the impact of eliminations related to the consolidated Och-Ziff funds.
(3)
Adjustment to exclude equity-based compensation, as management does not consider these non-cash expenses to be reflective of the operating performance of the Company. However, the fair value of RSUs that are settled in cash to employees or executive managing directors is included as an expense at the time of settlement. Further, expenses related to compensation and profit-sharing arrangements based on fund investment performance are recognized at the end of the relevant commitment period, as management reviews the total compensation expense related to these arrangements in relation to any incentive income earned by the relevant fund. Distributions to the Och-Ziff Operating Group D Units are also excluded, as management reviews operating performance at the Och-Ziff Operating Group level, where substantially all of the Company’s operations are performed, prior to making any income allocations.
(4)
Adjustment to exclude depreciation, amortization and changes in the tax receivable agreement liability, as management does not consider these items to be reflective of the operating performance of the Company. Additionally, recurring placement and related service fees are excluded, as management considers these fees a reduction in management fees, not an expense.
(5)
Adjustment to exclude net gains on investments in Och-Ziff funds, as management does not consider these gains to be reflective of the operating performance of the Company.
(6)
Adjustment to exclude amounts allocated to the executive managing directors and the Ziffs (until they exchanged their remaining interests during the 2014 second quarter) on their interests in the Och-Ziff Operating Group, as management reviews the operating performance of the Company at the Och-Ziff Operating Group level. The Company conducts substantially all of its activities through the Och-Ziff Operating Group. Additionally, the impact of the consolidated Och-Ziff funds, including the allocation of earnings (losses) to investors in those funds, is also removed.






EXHIBIT 5
OCH-ZIFF CAPITAL MANAGEMENT GROUP LLC
Components of Economic Income and Reconciliation of These Non-GAAP Measures to the Respective GAAP Measures (Unaudited)
(dollars in thousands)
 
 
 
 
 
 
 
Year Ended December 31, 2014
 
Year Ended December 31, 2013
 
 
Och-Ziff
Funds Segment
 
Other Operations
 
Total
Company
 
Och-Ziff
Funds Segment
 
Other Operations
 
Total
Company
Management fees—GAAP
 
$
648,945

 
$
15,276

 
$
664,221

 
$
545,533

 
$
10,894

 
$
556,427

Adjustment to management fees(1)
 
(14,938
)
 

 
(14,938
)
 
(10,668
)
 

 
(10,668
)
Management Fees—Economic Income Basis—Non-GAAP
 
634,007

 
15,276

 
649,283

 
534,865

 
10,894

 
545,759

 
 
 
 
 
 
 
 
 
 
 
 
 
Incentive income—GAAP
 
507,261

 

 
507,261

 
1,076,547

 

 
1,076,547

Adjustment to incentive income(2)
 
20,637

 
31,272

 
51,909

 
6,031

 

 
6,031

Incentive Income—Economic Income Basis—Non-GAAP
 
527,898

 
31,272

 
559,170

 
1,082,578

 

 
1,082,578

Other revenues
 
1,275

 
28

 
1,303

 
2,130

 
20

 
2,150

Total Revenues—Economic Income Basis—Non-GAAP
 
$
1,163,180

 
$
46,576

 
$
1,209,756

 
$
1,619,573

 
$
10,914

 
$
1,630,487

 
 
 
 
 
 
 
 
 
 
 
 
 
Compensation and benefits—GAAP
 
$
463,963

 
$
28,749

 
$
492,712

 
$
533,347

 
$
20,722

 
$
554,069

Adjustment to compensation and benefits(3)
 
(127,866
)
 
(6,294
)
 
(134,160
)
 
(140,079
)
 
(7,854
)
 
(147,933
)
Compensation and Benefits—Economic Income Basis—Non-GAAP
 
$
336,097

 
$
22,455

 
$
358,552

 
$
393,268

 
$
12,868

 
$
406,136

 
 
 
 
 
 
 
 
 
 
 
 
 
Interest expense and general, administrative and other expenses—GAAP
 
$
138,040

 
$
2,926

 
$
140,966

 
$
153,896

 
$
2,989

 
$
156,885

Adjustment to interest expense and general, administrative and other expenses(4)
 
(14,075
)
 
(748
)
 
(14,823
)
 
(30,282
)
 
(749
)
 
(31,031
)
Non-Compensation Expenses—Economic Income Basis—Non-GAAP
 
$
123,965

 
$
2,178

 
$
126,143

 
$
123,614

 
$
2,240

 
$
125,854

 
 
 
 
 
 
 
 
 
 
 
 
 
Net gains on investments in Och-Ziff funds and joint ventures—GAAP
 
$
5,999

 
$

 
$
5,999

 
$
1,966

 
$

 
$
1,966

Adjustment to net gains on investments in Och-Ziff funds and joint ventures(5)
 
(1,125
)
 

 
(1,125
)
 
(433
)
 

 
(433
)
Net Gains on Joint Ventures—GAAP
 
$
4,874

 
$

 
$
4,874

 
$
1,533

 
$

 
$
1,533

 
 
 
 
 
 
 
 
 
 
 
 
 
Net income allocated to noncontrolling interests—GAAP
 
$
433,528

 
$
101,760

 
$
535,288

 
$
762,945

 
$
222,878

 
$
985,823

Adjustment to net income allocated to noncontrolling interests(6)
 
(433,536
)
 
(101,760
)
 
(535,296
)
 
(762,957
)
 
(221,532
)
 
(984,489
)
Net Income (Loss) Allocated to Noncontrolling Interests—Economic Income Basis—Non-GAAP
 
$
(8
)
 
$

 
$
(8
)
 
$
(12
)
 
$
1,346

 
$
1,334

(1)
Adjustment to present management fees net of recurring placement and related service fees, as management considers these fees a reduction in management fees, not an expense. The impact of eliminations related to the consolidated Och-Ziff funds is also removed.
(2)
Adjustment to exclude the impact of eliminations related to the consolidated Och-Ziff funds.
(3)
Adjustment to exclude equity-based compensation, as management does not consider these non-cash expenses to be reflective of the operating performance of the Company. However, the fair value of RSUs that are settled in cash to employees or executive managing directors is included as an expense at the time of settlement. Further, expenses related to compensation and profit-sharing arrangements based on fund investment performance are recognized at the end of the relevant commitment period, as management reviews the total compensation expense related to these arrangements in relation to any incentive income earned by the relevant fund. Distributions to the Och-Ziff Operating Group D Units are also excluded, as management reviews operating performance at the Och-Ziff Operating Group level, where substantially all of the Company’s operations are performed, prior to making any income allocations.
(4)
Adjustment to exclude depreciation, amortization and changes in the tax receivable agreement liability, as management does not consider these items to be reflective of the operating performance of the Company. Additionally, recurring placement and related service fees are excluded, as management considers these fees a reduction in management fees, not an expense.
(5)
Adjustment to exclude net gains on investments in Och-Ziff funds, as management does not consider these gains to be reflective of the operating performance of the Company.
(6)
Adjustment to exclude amounts allocated to the executive managing directors and the Ziffs (until they exchanged their remaining interests during the 2014 second quarter) on their interests in the Och-Ziff Operating Group, as management reviews the operating performance of the Company at the Och-Ziff Operating Group level. The Company conducts substantially all of its activities through the Och-Ziff Operating Group. Additionally, the impact of the consolidated Och-Ziff funds, including the allocation of earnings (losses) to investors in those funds, is also removed.






EXHIBIT 6
OCH-ZIFF CAPITAL MANAGEMENT GROUP LLC
Summary Of Changes In Assets Under Management(1) (Unaudited)
(dollars in thousands)
 
Year Ended December 31, 2014
 
December 31, 2013
 
Inflows / (Outflows)
 
Distributions / Other Reductions
 
Appreciation / (Depreciation)(2)
 
December 31, 2014
 
 
 
 
 
 
 
 
 
 
Multi-strategy funds
$
31,768,578

 
$
828,131

 
$

 
$
1,503,681

 
$
34,100,390

Credit
 
 
 
 
 
 
 
 
 
Opportunistic credit funds
4,305,438

 
749,093

 
(501,935
)
 
546,004

 
5,098,600

Institutional Credit Strategies
2,605,628

 
2,553,940

 

 
7,166

 
5,166,734

Real estate funds
970,568

 
1,475,219

 
(414,234
)
 
(9,154
)
 
2,022,399

Other
588,600

 
528,362

 
(27,828
)
 
57,158

 
1,146,292

Total
$
40,238,812

 
$
6,134,745

 
$
(943,997
)
 
$
2,104,855

 
$
47,534,415

 
Year Ended December 31, 2013
 
December 31, 2012
 
Inflows / (Outflows)
 
Distributions / Other Reductions
 
Appreciation / (Depreciation)(2)
 
December 31, 2013
 
 
 
 
 
 
 
 
 
 
Multi-strategy funds
$
27,846,914

 
$
(92,303
)
 
$

 
$
4,013,967

 
$
31,768,578

Credit
 
 
 
 
 
 
 
 
 
Opportunistic credit funds
2,312,220

 
1,709,239

 
(197,926
)
 
481,905

 
4,305,438

Institutional Credit Strategies
985,934

 
1,628,237

 

 
(8,543
)
 
2,605,628

Real estate funds
980,781

 
76,444

 
(79,185
)
 
(7,472
)
 
970,568

Other
478,081

 
59,005

 

 
51,514

 
588,600

Total
$
32,603,930

 
$
3,380,622

 
$
(277,111
)
 
$
4,531,371

 
$
40,238,812

 
Year Ended December 31, 2012
 
December 31, 2011
 
Inflows / (Outflows)
 
Distributions / Other Reductions
 
Appreciation / (Depreciation)(2)
 
December 31, 2012
 
 
 
 
 
 
 
 
 
 
Multi-strategy funds
$
26,383,689

 
$
(1,416,676
)
 
$

 
$
2,879,901

 
$
27,846,914

Credit
 
 
 
 
 
 
 
 
 
Opportunistic credit funds
1,083,407

 
767,169

 

 
461,644

 
2,312,220

Institutional Credit Strategies

 
985,688

 

 
246

 
985,934

Real estate funds
948,699

 
114,617

 
(81,147
)
 
(1,388
)
 
980,781

Other
350,545

 
112,182

 
(2,246
)
 
17,600

 
478,081

Total
$
28,766,340

 
$
562,980

 
$
(83,393
)
 
$
3,358,003

 
$
32,603,930

(1)
Includes amounts invested by the Company, its executive managing directors, employees and certain other related parties for which the Company charged no management fees and received no incentive income for the periods presented. Amounts presented in this table are not the amounts used to calculate management fees and incentive income for the respective periods. During the fourth quarter of 2014, the Company reclassified certain funds from credit and from other into real estate funds. Prior period amounts have been reclassified to conform to the current presentation.
(2)
Appreciation (depreciation) reflects the aggregate net capital appreciation (depreciation) for the entire period and is presented on a total return basis, net of all fees and expenses (except incentive income on unrealized gains attributable to investments in certain funds that the Company, as investment manager, determines lack a readily ascertainable fair value, are illiquid or otherwise should be held until the resolution of a special event or circumstance that could reduce returns on these investments at the time of realization), and includes the reinvestment of all dividends and other income. Management fees and incentive income vary by product.







EXHIBIT 7
OCH-ZIFF CAPITAL MANAGEMENT GROUP LLC
Fund Information(1) (Unaudited)
(dollars in thousands)
 
Assets Under Management as of December 31,
 
Returns for the Year Ended December 31,
 
Annualized Returns Since Inception Through
December 31, 2014
 
 
 
 
 
 
 
 
2014
 
2013
 
2012
 
 
 
2014
 
2013
 
2012
 
Gross

Net
 
Gross
 
Net
 
Gross
 
Net
 
Gross
 
Net
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Multi-strategy funds
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
OZ Master Fund(2)
$
27,884,293

 
$
25,210,607

 
$
21,779,917

 
9.0
 %
 
5.5
 %
 
19.8
%
 
13.9
%
 
16.4
%
 
11.6
%
 
18.2
%
(2) 
12.8
%
(2) 
OZ Asia Master Fund
1,337,913

 
1,341,550

 
1,393,496

 
7.5
 %
 
4.0
 %
 
20.1
%
 
13.5
%
 
9.7
%
 
7.0
%
 
9.8
%
 
5.7
%
 
OZ Europe Master Fund
1,238,706

 
1,437,271

 
1,960,883

 
4.1
 %
 
1.8
 %
 
18.1
%
 
12.4
%
 
13.0
%
 
8.6
%
 
12.3
%
 
8.1
%
 
OZ Enhanced Master Fund(3)
1,135,868

 
662,898

 

 
12.1
 %
 
7.9
 %
 
20.9
%
 
15.3
%
 
n/a

 
n/a

 
20.0
%
 
14.0
%
 
Och-Ziff European Multi-Strategy UCITS Fund(3)
346,004

 
418,568

 
187,633

 
-4.7
 %
 
-6.7
 %
 
19.5
%
 
14.8
%
 
14.6
%
 
11.5
%
 
5.1
%
 
2.3
%
 
Other funds
2,157,606

 
2,697,684

 
2,524,985

 
n/m

 
n/m

 
n/m

 
n/m

 
n/m

 
n/m

 
n/m

 
n/m

 
 
34,100,390

 
31,768,578

 
27,846,914

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Credit
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Opportunistic credit funds:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
OZ Credit Opportunities Master Fund
1,206,009

 
504,603

 
223,602

 
12.4
 %
 
8.9
 %
 
24.5
%
 
18.2
%
 
42.3
%
 
31.7
%
 
24.3
%
 
18.0
%
 
Customized Credit Focused Platform
1,773,592

 
1,533,062

 
827,730

 
17.8
 %
 
13.3
 %
 
22.0
%
 
16.6
%
 
47.5
%
 
35.6
%
 
23.7
%
 
17.9
%
 
Closed-ended opportunistic credit funds
1,616,377

 
1,865,632

 
1,260,888

 
See the following page for information on the Company’s closed-ended opportunistic credit funds.
Other funds
502,622

 
402,141

 

 
n/m

 
n/m

 
n/m

 
n/m

 
n/m

 
n/m

 
n/m

 
n/m

 
 
5,098,600

 
4,305,438

 
2,312,220

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Institutional Credit Strategies
5,166,734

 
2,605,628

 
985,934

 
See the following page for information on the Company’s institutional credit strategies.
 
10,265,334

 
6,911,066

 
3,298,154

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Real estate funds
2,022,399

 
970,568

 
980,781

 
See the second following page for information on the Company’s real estate funds.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Other
1,146,292

 
588,600

 
478,081

 
n/m

 
n/m

 
n/m

 
n/m

 
n/m

 
n/m

 
n/m

 
n/m

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Total
$
47,534,415

 
$
40,238,812

 
$
32,603,930

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
n/m not meaningful
Please see the last page of this Exhibit 7 (“Fund Information—Footnotes”) for important disclosures related to the footnotes referenced herein.






EXHIBIT 7
OCH-ZIFF CAPITAL MANAGEMENT GROUP LLC
Fund Information — continued (Unaudited)
(dollars in thousands)
 
Assets Under Management as of December 31,
 
Inception to Date as of December 31, 2014
 
 
 
 
 
 
 
 
 
 
 
IRR
 
 
 
2014
 
2013
 
2012
 
Total Commitments
 
Invested Capital(4)
 
Gross(5)
 
Net(6)
 
Gross
MOIC(7)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Closed-Ended Opportunistic Credit Funds (Investment Period)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
OZ European Credit Opportunities Fund (2012-2015)
$
574,602

 
$
523,878

 
$
188,786

 
$
459,600

 
$
293,487

 
20.2
%
 
15.3
%
 
1.5x
OZ Structured Products Domestic Fund II (2011-2014)(8)
434,921

 
446,449

 
382,059

 
326,850

 
326,850

 
24.7
%
 
19.2
%
 
1.8x
OZ Structured Products Offshore Fund II (2011-2014)(8)
373,082

 
382,247

 
330,238

 
304,531

 
304,531

 
22.1
%
 
17.0
%
 
1.6x
OZ Structured Products Offshore Fund I (2010-2013)(8)
31,498

 
136,882

 
221,681

 
155,098

 
155,098

 
24.3
%
 
19.4
%
 
2.0x
OZ Structured Products Domestic Fund I (2010-2013)(8)
17,080

 
87,149

 
138,124

 
99,986

 
99,986

 
23.2
%
 
18.4
%
 
2.0x
Other funds
185,194

 
289,027

 

 
316,250

 
176,300

 
n/m

 
n/m

 
n/m
 
$
1,616,377

 
$
1,865,632

 
$
1,260,888

 
$
1,662,315

 
$
1,356,252

 
 
 
 
 
 
n/m not meaningful
Please see the last page of this Exhibit 7 (“Fund Information—Footnotes”) for important disclosures related to the footnotes referenced herein.
 
 
 
 
 
Assets Under Management as of December 31,
 
Closing Date
 
Initial Deal Size
 
2014
 
2013
 
2012
 
 
 
 
 
 
 
 
 
 
Institutional Credit Strategies
 
 
 
 
 
 
 
 
 
CLOs:
 
 
 
 
 
 
 
 
 
OZLM I
July 19, 2012
 
$
510,700

 
$
468,242

 
$
465,614

 
$
456,130

OZLM II
November 1, 2012
 
560,100

 
517,050

 
514,436

 
514,804

OZLM III
February 20, 2013
 
653,250

 
613,190

 
610,254

 

OZLM IV
June 27, 2013
 
600,000

 
542,744

 
546,077

 

OZLM V
December 17, 2013
 
501,250

 
470,428

 
469,247

 

OZLM VI
April 16, 2014
 
621,250

 
592,707

 

 

OZLM VII
June 26, 2014
 
824,750

 
796,271

 

 

OZLM VIII
September 9, 2014
 
622,250

 
596,858

 

 

OZLM IX
December 22, 2014
 
510,208

 
494,244

 

 

 
 
 
5,403,758

 
5,091,734

 
2,605,628

 
970,934

Other funds
 
 
n/a

 
75,000