EX-99.2 3 ozm-eprxex992detailedeprx4.htm EXHIBIT 99.2 Exhibit
ozlogoa01.jpg
Oz Management Reports Fourth Quarter and Full Year 2017 Results
Dividend of $0.07 per Class A Share
NEW YORK, February 16, 2018 – Och-Ziff Capital Management Group LLC (NYSE: OZM) (the “Company” or “Oz Management”) today reported GAAP net income attributable to Class A Shareholders (“GAAP Net Income”) of $6.6 million, or $0.04 per basic and $0.03 per diluted Class A Share, for the fourth quarter of 2017, and $18.2 million, or $0.10 per basic and diluted Class A Share, for the full year 2017.
Summary
Oz Management announced that Robert Shafir will succeed Dan S. Och as Chief Executive Officer. Mr. Och will remain Chairman of the Board of Directors through March 31, 2019, after which time he expects to remain involved with the Company.
All of the Company’s main funds posted strong returns in 2017.
Oz Master Fund, the Company’s largest multi-strategy fund, was up 1.3% gross and 0.6% net for the fourth quarter, and 15.0% gross and 10.4% net for the full year 2017.
Oz Credit Opportunities Master Fund was up 4.6% gross and 2.8% net for the fourth quarter, and 16.9% gross and 11.0% net for the full year 2017.
Distributable Earnings were $149.4 million, or $0.27 per Adjusted Class A Share, for the fourth quarter of 2017, and $278.3 million, or $0.51 per Adjusted Class A Share, for the full year 2017.
A cash dividend of $0.07 per Class A Share was declared for the fourth quarter of 2017, bringing total full year 2017 dividends to $0.13 per Class A Share.
Fund performance and careful expense management strengthened the Company’s balance sheet during 2017, bringing cash and cash equivalents to $469.5 million, investments to $239.0 million and increasing accrued unrecognized incentive income to $437.4 million.
As of February 1, 2018 estimated assets under management increased to $33.3 billion, an increase of 3% since December 31, 2017, with Oz Master Fund returning an estimated 3.5% net in January 2018.
Dan Och, Chairman of Oz Management, said, “We are pleased with the solid results we posted in 2017 across all of our funds. Additionally, we are excited to have Rob Shafir join Oz Management as our Chief Executive Officer. I look forward to working with Rob and the team to ensure a smooth transition as we continue to deliver for our clients in 2018.”


1


GAAP NET INCOME ATTRIBUTABLE TO CLASS A SHAREHOLDERS
For the fourth quarter of 2017, Oz Management reported GAAP Net Income of $6.6 million, or $0.04 per basic and $0.03 per diluted Class A Share, compared to a GAAP Net Income of $2.9 million, or $0.02 per basic and diluted Class A Share, for the fourth quarter of 2016. The quarter-to-date increase in GAAP earnings was due to higher incentive income, lower operating expenses and a reduction in the tax receivable agreement liability due to the decrease in the future U.S. Federal corporate income tax rate pursuant to the Tax Cuts and Jobs Act of 2017 (“TCJA”). These increases were partially offset by lower management fees and higher income tax expense due to a reduction of the Company’s deferred income tax assets as a result of the TCJA.
For the full year 2017, Oz Management reported GAAP Net Income of $18.2 million, or $0.10 per basic and diluted Class A Share, compared to GAAP Net Loss of $130.8 million, or $0.72 per basic and $0.73 per diluted Class A Share, for the full year 2016. The year-over-year improvement was primarily due to investigation-related settlements expense of $412.1 million taken in 2016, as well as higher incentive income, lower non-compensation expenses, lower salaries and benefits, and a reduction in the tax receivable agreement liability. These improvements were partially offset by lower management fees, higher bonus expense, and higher income tax expense due to a reduction of the Company’s deferred income tax assets.
DISTRIBUTABLE EARNINGS (NON-GAAP)
For the fourth quarter of 2017, Oz Management reported Distributable Earnings of $149.4 million, or $0.27 per Adjusted Class A Share, compared to a Distributable Earnings of $7.5 million, or $0.01 per Adjusted Class A Share, for the fourth quarter of 2016. The quarter-to-date increase was driven primarily by higher incentive income and lower operating expenses, partially offset by lower management fees. Also offsetting the year-over-year improvement was an amount accrued for the tax receivable agreement and other payables, as compared to a reversal in the prior-year period related to the waiver of the tax receivable agreement payments.
For the full year 2017, Oz Management reported Distributable Earnings of $278.3 million, or $0.51 per Adjusted Class A Share, compared to a Distributable Earnings loss of $121.3 million, or $0.23 per Adjusted Class A Share, for the full year 2016. The year-over-year improvement was driven primarily by the settlements expense taken in 2016. Also contributing to the year-over-year improvement was higher incentive income, lower non-compensation expenses, and lower salaries and benefits. These improvements were partially offset by lower management fees and higher bonus expense, as well as an amount accrued for the tax receivable agreement and other payables, as compared to a reversal in the prior-year period related to the waiver of the tax receivable agreement payments.
Please see the “Economic Income (Non-GAAP)” section of this press release for a discussion of these drivers.
Distributable Earnings and Distributable Earnings per Adjusted Class A Share are non-GAAP measures. 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.


2


ASSETS UNDER MANAGEMENT
 
 
 
 
 
Year-Over-Year Change
(dollars in billions)
December 31, 2017
 
December 31, 2016
 
Inflows / (Outflows)
 
Distributions / Other Reductions
 
Appreciation
 
Total
 
%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Multi-strategy funds
$
13.7

 
$
21.1

 
$
(9.2
)
 
$

 
$
1.8

 
$
(7.4
)
 
-35%
Credit
 
 
 
 
 
 
 
 
 
 
 
 
 
Opportunistic credit funds
5.5

 
5.4

 
(0.3
)
 
(0.1
)
 
0.5

 
0.1

 
3%
Institutional Credit Strategies
10.1

 
8.0

 
2.1

 

 

 
2.1

 
26%
Real estate funds
2.5

 
2.2

 
0.5

 
(0.2
)
 

 
0.3

 
13%
Other
0.6

 
1.2

 
(0.6
)
 

 
0.1

 
(0.6
)
 
-50%
Total
$
32.4

 
$
37.9

 
$
(7.6
)
 
$
(0.3
)
 
$
2.4

 
$
(5.5
)
 
-14%
Totals may not sum due to rounding. Please see Exhibit 7 for detailed information.
As of December 31, 2017, assets under management totaled $32.4 billion, a decrease of $5.5 billion, or 14%, from December 31, 2016, which was driven by capital net outflows of $7.6 billion, primarily in the multi-strategy funds, and $273.3 million of distributions and other reductions, primarily from the Company’s real estate funds and closed-end opportunistic credit funds. Partially offsetting these reductions was performance-related appreciation of $2.4 billion, driven primarily by the Company’s multi-strategy and opportunistic credit funds.
Assets under management increased to an estimated $33.3 billion as of February 1, 2018. This increase reflected estimated performance-related appreciation of approximately $620.0 million in January and capital net inflows of approximately $262.6 million, which was comprised of approximately $603.5 million of capital net outflows on January 1, 2018 and approximately $866.2 million of capital net inflows from January 2, 2018 to February 1, 2018.
Please see the detailed assets under management and fund information on Exhibits 7 through 9 that accompany this press release.
Multi-strategy funds
Assets under management in the Company’s multi-strategy funds totaled $13.7 billion as of December 31, 2017, decreasing 35%, or $7.4 billion, year-over-year. This change was driven by net capital outflows of $9.2 billion, primarily from the Oz Master Fund, the Company’s largest multi-strategy fund, partially offset by performance-related appreciation of $1.8 billion. The Company’s multi-strategy funds experienced elevated redemptions during 2017 driven in part by the investigation matter.
In 2017, the Oz Master Fund generated a gross return of 15.0% and a net return of 10.4%. The largest positive contributors to the fund’s performance by strategy were merger arbitrage, structured credit, corporate credit long/short equity special situations. Convertible and derivative arbitrage reported a modest loss in 2017. The fund also reported positive performance across all regions: the U.S., Europe and Asia.


3


Credit
Assets under management in the Company’s dedicated credit products totaled $15.7 billion as of December 31, 2017, increasing $2.3 billion, or 17%, year-over-year. This change was driven by capital net inflows of $1.8 billion and performance-related appreciation of $535.8 million, partially offset by $58.0 million of distributions in the Company’s closed-end opportunistic credit funds.
Opportunistic credit
Oz Management’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 $5.5 billion as of December 31, 2017, increasing $137.5 million, or 3%, year-over-year. This change was driven by $532.7 million of performance-related appreciation, partially offset by capital net outflows of $337.1 million, as well as $58.0 million of distributions and other reductions.
In 2017, the Oz Credit Opportunities Master Fund, the Company’s global opportunistic credit fund, generated a gross return of 16.9% and a net return of 11.0%. Performance was broad-based with gains across both the structured and corporate credit strategies, and geographies.
Institutional Credit Strategies
Institutional Credit Strategies (“ICS”) 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 ICS totaled $10.1 billion as of December 31, 2017, increasing $2.1 billion, or 26%, year-over-year. The increase was primarily driven by four new CLOs. 2017 was a strong year for ICS, which closed over $6.1 billion in CLOs, including refinancings.
ICS managed 19 CLOs as of December 31, 2017.
Real estate funds
Assets under management in the Company’s real estate funds totaled $2.5 billion as of December 31, 2017, increasing $281.8 million, or 13%, year-over-year.
The Company continues to deploy capital in its real estate funds, while also realizing investments. In 2017, the real estate funds invested over $200 million and had full or partial realizations of 21 investments at an average multiple of invested capital in excess of 2.2x. In total, the Company has committed approximately 60% of Och-Ziff Real Estate Fund III and 18% of the recently closed Och-Ziff Real Estate Credit Fund I. 
The Company continues to harvest investments in Och-Ziff Real Estate Funds I and II. Since inception through December 31, 2017, the gross IRR was 33.2% gross and 21.8% net for Och-Ziff Real Estate Fund II (for which the investment period ended in 2014) and 25.1% gross and 15.7% net for Och-Ziff Real Estate Fund I (for which the investment period ended in 2010).


4


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 6 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 fourth quarter of 2017 were $433.0 million, an increase of 58% compared to $273.7 million for the fourth quarter of 2016. Management fees were $71.3 million, 27% lower than the $97.3 million for the prior-year period. Incentive income was $359.0 million, an increase of 104% compared to $176.0 million for the prior-year period.
Economic Income revenues for the full year 2017 were $833.0 million, an increase of 14% from the $730.2 million for the full year 2016. Management fees were $299.3 million, a 40% decrease from $494.7 million for the prior-year period. Incentive income was $528.0 million, a 126% increase from $233.4 million for the prior-year period.
The decreases in management fees for both the quarter-to-date and year-to-date periods were driven primarily by lower assets under management in the Company’s multi-strategy funds. In addition, effective October 1, 2016, the Company reduced the management fee rate for certain of its multi-strategy assets under management, further contributing to the decline in management fee revenue year-over-year.
The increases in incentive income for the quarter-to-date and year-to-date periods were driven by higher relative fund performance.
Compensation and Benefits (Non-GAAP)
Compensation and benefits for the fourth quarter of 2017 totaled $218.7 million, a 2% decrease compared to $224.1 million for the fourth quarter of 2016. Salaries and benefits were $22.5 million, 10% lower than $24.9 million for the prior-year period. Bonus expense for the fourth quarter of 2017 totaled $196.2 million, slightly down from $199.2 million for the prior-year period.
Compensation and benefits for the full year 2017 totaled $351.8 million, a 7% increase from $329.8 million for the full year 2016. Salaries and benefits were $96.6 million, 13% lower than $110.9 million for the prior-year period. Bonus expense for the full year 2017 totaled $255.2 million, a 17% increase from $218.8 million for the prior-year period.
The decrease in salaries and benefits was driven primarily by lower headcount. The increase in bonus expense for the year-to-date period was due to higher relative fund performance.


5


Non-Compensation Expenses (Non-GAAP)
Non-compensation expenses for the fourth quarter of 2017 totaled $36.7 million, a 17% decrease from $44.5 million for the fourth quarter of 2016. The year-over-year decrease was primarily due to reductions across various operating expenses as a result of expense savings initiatives.
Non-compensation expenses for the full year 2017 totaled $143.5 million, a 77% decrease from $611.9 million in the prior-year period. The year-over-year decrease was driven primarily by $412.1 million of settlements expense accrued in 2016, as well as lower professional services, which was driven primarily by lower legal fees, as well as reductions across various other operating expenses as a result of expense savings initiatives.
Economic Income (Non-GAAP)
Economic Income for the fourth quarter of 2017 was $177.6 million, compared to $5.1 million for the fourth quarter of 2016. The year-over-year increase was driven primarily by higher incentive income and lower operating expenses, partially offset by lower management fees.
Economic Income for the full year 2017 was $337.7 million, compared to a loss of $211.6 million for the full year 2016. The year-over-year improvement was driven primarily by the settlements expense taken in 2016. Also contributing to the year-over-year improvement was higher incentive income, lower non-compensation expenses, and lower salaries and benefits. These improvements were partially offset by lower management fees and higher bonus expense.
CAPITAL
As of December 31, 2017, the number of Class A Shares outstanding was 189,573,210. For purposes of calculating Distributable Earnings per Share, the Company assumes that all the interests held by its executive managing directors in the Company’s principal operating subsidiaries (the “Oz Operating Group”) (collectively, “Partner Units”), as well as Class A Restricted Share Units (“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 quarter and full year ended December 31, 2017, the total weighted-average Adjusted Class A Shares outstanding was 553,237,688 and 549,485,710, respectively.
As of December 31, 2017, there were 71,850,000 Group P Units outstanding. Group P Units are equity interests in the Oz Operating Group that are held by the Company’s executive managing directors and do not participate in the economics of the Oz Operating Group until certain service and market-performance conditions are met; therefore, the Company will not include the Group P Units in Adjusted Class A Shares until such conditions are met. As of December 31, 2017, the service and market-performance conditions had not yet been met.
DIVIDEND
The Board of Directors of Oz Management declared a dividend of $0.07 for the fourth quarter of 2017. The dividend is payable on March 5, 2018, to holders of record as of the close of business on February 26, 2018.
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, the entire amount of the dividend for the fourth quarter of 2017 will be treated as return of capital.


6


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.
*            *            *             *
Dan Och, Chairman of the Board of Directors, Robert Shafir, Chief Executive Officer, and Alesia Haas, Chief Financial Officer, will host a conference call today, February 16, 2018, 8:30 a.m. Eastern Time to discuss the Company’s fourth quarter and full year results. The call can be accessed by dialing +1-833-224-0545 (in the U.S.) or +1-647-689-4061 (international), passcode 4063237. A simultaneous webcast of the call will be available on the Public Investors page of the Company’s website (www.ozm.com).
For those unable to listen to the live broadcast, a webcast replay will also be available on the Company’s website as noted above.
*            *            *             *
Non-GAAP Financial Measures
Management evaluates Economic Income for the Oz Funds segment, the Company’s only reportable operating segment under GAAP, and for the Company’s Other Operations. Economic Income for the Company equals the sum of Economic Income for the Oz Funds segment and the Company’s Other Operations.
Additionally, throughout this press release management has presented certain non-GAAP measures that exclude the effect of the settlements expense. These measures are presented to provide a more comparable view of the Company’s core operating results year-over-year.
The Company conducts substantially all of its business through the Oz 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.
For reconciliations of the Company’s non-GAAP measures to the most directly comparable GAAP measures, please see Exhibits 2 through 6 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


7


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 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, changes in the tax receivable agreement liability, and gains and losses on fixed assets and investments in funds, 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.
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.
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.
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, other revenues, compensation and benefits, non-compensation expenses and net income (loss) attributable to noncontrolling interests as presented on an Economic Income basis are also non-GAAP measures.
Distributable Earnings and Tax Receivable Agreement and Other Payables
Distributable Earnings is a non-GAAP measure of operating performance that equals Economic Income less amounts related to the tax receivable agreement and other payables. The adjustment for the tax receivable agreement and other payables is an estimate of payments under the tax receivable agreement and income taxes related to the earnings for the periods presented. These amounts are grossed-up for Och-Ziff Capital Management Group LLC’s ownership percentage in the Oz Operating Group, assuming the conversion of all outstanding Partner Units into Class A Shares, on a one-to-one basis. 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.


8


*            *            *            *
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; the outcome of third-party litigation involving the Company; the consequences of the settlements with the SEC and the DOJ; conditions impacting the alternative asset management industry; the Company’s ability to retain existing investor capital; 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’s 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 SEC, including but not limited to the Company’s annual report on Form 10-K for the year ended December 31, 2016, dated March 1, 2017, as well as may be updated from time to time in the Company’s other SEC filings. 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 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 Oz Management fund.
The Company files annual, quarterly and current reports, proxy statements and other information required by the Exchange Act of 1934, as amended, with the SEC. The Company makes available free of charge on its website (www.ozm.com) its annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K, proxy statements and any amendments to those filings as soon as reasonably practicable after such material is electronically filed with or furnished to the SEC. The Company also uses its website to distribute company information, and such information may be deemed material. Accordingly, investors should monitor the Company’s website, in addition to its press releases, SEC filings and public conference calls and webcast.


9


*            *            *            *
About Oz Management
Oz Management is one of the largest institutional alternative asset managers in the world, with offices in New York, London, Hong Kong, Mumbai, Beijing, Shanghai and Houston. The Company provides asset management services to investors globally through its multi-strategy funds, dedicated credit funds, including opportunistic credit funds and Institutional Credit Strategies products, real estate funds and other alternative investment vehicles. Oz Management 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. The Company’s funds invest across multiple strategies and geographies, consistent with the investment objectives of each fund. The global investment strategies employed 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, 2018, Oz Management had approximately $33.3 billion in assets under management. For more information, please visit the Company’s website (www.ozm.com).


Investor Relations Contact
 
Media Relations Contact
Adam Willkomm
 
Jonathan Gasthalter
Head of Business Development and Shareholder Services
 
Gasthalter & Co. LP
+1-212-719-7381
 
+1-212-257-4170
investorrelations@ozm.com
 
jg@gasthalter.com


10




EXHIBIT 1
OCH-ZIFF CAPITAL MANAGEMENT GROUP LLC
Consolidated Statements of Comprehensive Income (Loss) (Unaudited)
(dollars in thousands, except per share amounts)
 
 
 
 
 
Three Months Ended December 31,
 
Year Ended December 31,
 
2017
 
2016
 
2017
 
2016
Revenues
 
 
 
 
 
 
 
Management fees
$
75,950

 
$
104,334

 
$
319,458

 
$
533,156

Incentive income
359,010

 
175,963

 
528,000

 
233,440

Other revenues
2,696

 
462

 
6,777

 
2,006

Income of consolidated funds
584

 
500

 
4,102

 
1,762

Total Revenues
438,240

 
281,259

 
858,337

 
770,364

 
 
 
 
 
 
 
 
Expenses
 
 
 
 
 
 
 
Compensation and benefits
222,437

 
240,121

 
436,549

 
409,883

Interest expense
6,148

 
6,324

 
23,191

 
23,776

General, administrative and other
37,842

 
50,147

 
152,071

 
646,468

Expenses of consolidated funds
23

 
34

 
9,391

 
350

Total Expenses
266,450

 
296,626

 
621,202

 
1,080,477

 
 
 
 
 
 
 
 
Other Income (Loss)
 
 
 
 
 
 
 
Changes in tax receivable agreement liability
222,859

 
(13,653
)
 
222,859

 
(1,663
)
Net gains on investments in funds and joint ventures
2,415

 
2,458

 
3,465

 
3,760

Net gains of consolidated funds
194

 
733

 
8,472

 
2,915

Total Other Income (Loss)
225,468

 
(10,462
)
 
234,796

 
5,012

 
 
 
 
 
 
 
 
Income (Loss) Before Income Taxes
397,258

 
(25,829
)
 
471,931

 
(305,101
)
Income taxes
300,317

 
(28,550
)
 
317,559

 
10,886

Consolidated and Comprehensive Net Income (Loss)
96,941

 
2,721

 
154,372

 
(315,987
)
Less: (Income) loss attributable to noncontrolling interests
(89,950
)
 
6,890

 
(131,630
)
 
193,757

Less: (Income) loss attributable to redeemable noncontrolling interests
(429
)
 
(649
)
 
(1,667
)
 
(2,450
)
Net Income (Loss) Attributable to Och-Ziff Capital Management Group LLC—GAAP
6,562

 
8,962

 
21,075

 
(124,680
)
Less: Change in redemption value of Preferred Units

 
(6,082
)
 
(2,853
)
 
(6,082
)
Net Income (Loss) Attributable to Class A Shareholders
$
6,562

 
$
2,880

 
$
18,222

 
$
(130,762
)
 
 
 
 
 
 
 
 
Earnings (Loss) per Class A Share
 
 
 
 
 
 
 
Earnings (Loss) per Class A Share - basic
$
0.04

 
$
0.02

 
$
0.10

 
$
(0.72
)
Earnings (Loss) per Class A Share - diluted
$
0.03

 
$
0.02

 
$
0.10

 
$
(0.73
)
Weighted-average Class A Shares outstanding - basic
187,083,750

 
183,152,279

 
186,423,793

 
182,670,173

Weighted-average Class A Shares outstanding - diluted
190,115,619

 
183,152,279

 
187,181,760

 
479,987,268







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, 2017

Three Months Ended December 31, 2016
 

Oz Funds Segment
 
Other Operations
 
Total
Company
 
Oz Funds Segment
 
Other Operations
 
Total
Company
Net Income (Loss) Attributable to Class A Shareholders

$
13,964


$
(7,402
)

$
6,562


$
12,370


$
(9,490
)

$
2,880

Change in redemption value of Preferred Units







6,082




6,082

Net Income (Loss) Attributable to Och-Ziff Capital Management Group LLC

13,964


(7,402
)

6,562


18,452


(9,490
)

8,962

Net income (loss) attributable to Group A Units

89,585




89,585


(7,749
)



(7,749
)
Equity-based compensation, net of RSUs settled in cash

19,794


679


20,473


18,286


620


18,906

Adjustment to recognize deferred cash compensation in the period of grant

(28,227
)
 

 
(28,227
)
 
(1,851
)
 

 
(1,851
)
Income taxes

300,321


(4
)

300,317


(28,550
)



(28,550
)
Allocations to Group D Units

1,722


38


1,760


(2,850
)



(2,850
)
Adjustment for expenses related to compensation and profit-sharing arrangements based on fund investment performance

16


9,709


9,725




1,322


1,322

Changes in tax receivable agreement liability

(222,859
)



(222,859
)

13,653




13,653

Depreciation, amortization and net gains and losses on fixed assets

2,641




2,641


4,884


51


4,935

Other adjustments

(2,245
)

(135
)

(2,380
)

(1,481
)

(204
)

(1,685
)
Economic Income—Non-GAAP

$
174,712


$
2,885


177,597


$
12,794


$
(7,701
)

5,093

Tax receivable agreement and other payables—Non-GAAP(1)



 

(28,169
)

 

 

2,445

Distributable Earnings—Non-GAAP

 

$
149,428


 

 

$
7,538














Weighted-Average Class A Shares Outstanding

 

187,083,750


 

 

183,152,279

Weighted-Average Partner Units

 

345,222,691


 

 

322,767,349

Weighted-Average Class A Restricted Share Units (RSUs)

 

20,931,247


 

 

15,090,865

Weighted-Average Adjusted Class A Shares

 

553,237,688


 

 

521,010,493
















Distributable Earnings Per Adjusted Class A Share—Non-GAAP

$
0.27






$
0.01

(1) Presents an estimate of payments under the tax receivable agreement and income taxes related to the earnings for the periods presented. These amounts are grossed-up for Och - Ziff Capital Management Group LLC’s ownership percentage in the Oz Operating Group, assuming the conversion of all outstanding Partner Units into Class A Shares, on a one-to-one basis. 





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, 2017
 
Year Ended December 31, 2016
 
 
Oz Funds Segment
 
Other Operations
 
Total
Company
 
Oz Funds Segment
 
Other Operations
 
Total
Company
Net Income (Loss) Attributable to Class A Shareholders
 
$
38,468

 
$
(20,246
)
 
$
18,222

 
$
(126,279
)
 
$
(4,483
)
 
$
(130,762
)
Change in redemption value of Preferred Units
 
2,853

 

 
2,853

 
6,082

 

 
6,082

Net Income (Loss) Attributable to Och-Ziff Capital Management Group LLC—GAAP
 
41,321

 
(20,246
)
 
21,075

 
(120,197
)
 
(4,483
)
 
(124,680
)
Net income (loss) attributable to Group A Units
 
130,730

 

 
130,730

 
(195,087
)
 

 
(195,087
)
Equity-based compensation, net of RSUs settled in cash
 
81,227

 
2,812

 
84,039

 
72,650

 
2,567

 
75,217

Adjustment to recognize deferred cash compensation in the period of grant
 
(28,893
)
 

 
(28,893
)
 
(1,851
)
 

 
(1,851
)
Income taxes
 
317,383

 
176

 
317,559

 
10,787

 
99

 
10,886

Allocations to Group D Units
 
6,561

 
113

 
6,674

 

 

 

Adjustment for expenses related to compensation and profit-sharing arrangements based on fund investment performance
 
326

 
22,641

 
22,967

 

 
6,752

 
6,752

Changes in tax receivable agreement liability
 
(222,859
)
 

 
(222,859
)
 
1,663

 

 
1,663

Depreciation, amortization and net gains and losses on fixed assets
 
10,334

 

 
10,334

 
19,269

 
613

 
19,882

Other adjustments
 
(3,527
)
 
(364
)
 
(3,891
)
 
(4,240
)
 
(117
)
 
(4,357
)
Economic Income—Non-GAAP
 
$
332,603

 
$
5,132

 
337,735

 
$
(217,006
)
 
$
5,431

 
(211,575
)
Tax receivable agreement and other payables—Non-GAAP(1)
 
 
 
(59,480
)
 
 
 
 
 
90,311

Distributable Earnings—Non-GAAP
 
 
 
$
278,255

 
 
 
 
 
$
(121,264
)
 
 
 
 
 
 
 
 
 
 
 
Weighted-Average Class A Shares Outstanding
 
 
 
186,423,793

 
 
 
 
 
182,670,173

Weighted-Average Partner Units
 
 
 
341,530,458

 
 
 
 
 
322,736,735

Weighted-Average Class A Restricted Share Units (RSUs)
 
 
 
21,531,459

 
 
 
 
 
14,343,302

Weighted-Average Adjusted Class A Shares
 
 
 
549,485,710

 
 
 
 
 
519,750,210

 
 
 
 
 
 
 
 
 
 
 
Distributable Earnings Per Adjusted Class A Share—Non-GAAP
 
 
 
$
0.51

 
 
 
 
 
$
(0.23
)
 
 
 
 
 
 
 
 
 
 
 
 
 
Economic Income—Non-GAAP
 
 
 
 
 
 
 
 
 
 
 
$
(211,575
)
Settlements expense
 
 
 
 
 
 
 
 
 
 
 
412,101

Economic Income Excluding Settlements Expense—Non-GAAP
 
 
 
 
 
 
 
200,526

Tax receivable agreement and other payables excluding tax receivable agreement waiver—Non-GAAP
 
 
 
 
 
 
 
 
 
(9,475
)
Distributable Earnings Excluding Settlements Expense and Tax Receivable Agreement Waiver—Non-GAAP
 
 
 
 
 
 
 
$
191,051

 
 
 
 
 
 
 
 
 
 
 
 
 
Distributable Earnings Per Adjusted Class A Share Excluding Settlements Expense and Tax Receivable Agreement Waiver—Non-GAAP
 
 
 
 
 
 
 
$
0.37

(1) Presents an estimate of payments under the tax receivable agreement and income taxes related to the earnings for the periods presented. These amounts are grossed-up for Och-Ziff Capital Management Group LLC’s ownership percentage in the Oz Operating Group, assuming the conversion of all outstanding Partner Units into Class A Shares, on a one-to-one basis. The amounts payable under the tax receivable agreement include the effects of the reversal of amounts previously accrued related to the waiver in the third quarter of 2016. 






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, 2017
 
Three Months Ended December 31, 2016
 
 
Oz Funds Segment
 
Other Operations
 
Total
Company
 
Oz Funds Segment
 
Other Operations
 
Total
Company
Management fees—GAAP
 
$
70,639

 
$
5,311

 
$
75,950

 
$
99,140

 
$
5,194

 
$
104,334

Adjustment to management fees(1)
 
(4,663
)
 

 
(4,663
)
 
(7,062
)
 

 
(7,062
)
Management Fees—Economic Income Basis—Non-GAAP
 
65,976

 
5,311

 
71,287

 
92,078

 
5,194

 
97,272

 
 
 
 
 
 
 
 
 
 
 
 
 
Incentive Income—Economic Income Basis—GAAP and Non-GAAP
 
355,997

 
3,013

 
359,010

 
174,885

 
1,078

 
175,963

 
 
 
 
 
 
 
 
 
 
 
 
 
Other revenues—GAAP
 
2,642

 
54

 
2,696

 
445

 
17

 
462

Adjustment to other revenues(2)
 
20

 

 
20

 

 

 

Other Revenues—Economic Income Basis—Non-GAAP
 
2,662

 
54

 
2,716

 
445

 
17

 
462

Total Revenues—Economic Income Basis—Non-GAAP
 
$
424,635

 
$
8,378

 
$
433,013

 
$
267,408

 
$
6,289

 
$
273,697

 
 
 
 
 
 
 
 
 
 
 
 
 
Compensation and benefits—GAAP
 
$
206,850

 
$
15,587

 
$
222,437

 
$
224,675

 
$
15,446

 
$
240,121

Adjustment to compensation and benefits(3)
 
6,694

 
(10,425
)
 
(3,731
)
 
(14,109
)
 
(1,942
)
 
(16,051
)
Compensation and Benefits—Economic Income Basis—Non-GAAP
 
$
213,544

 
$
5,162

 
$
218,706

 
$
210,566

 
$
13,504

 
$
224,070

 
 
 
 
 
 
 
 
 
 
 
 
 
Interest expense and general, administrative and other expenses—GAAP
 
$
43,659

 
$
331

 
$
43,990

 
$
55,934

 
$
537

 
$
56,471

Adjustment to interest expense and general, administrative and other expenses(4)
 
(7,284
)
 

 
(7,284
)
 
(11,947
)
 
(51
)
 
(11,998
)
Non-Compensation Expenses—Economic Income Basis—Non-GAAP
 
$
36,375

 
$
331

 
$
36,706

 
$
43,987

 
$
486

 
$
44,473

 
 
 
 
 
 
 
 
 
 
 
 
 
Net gains on investments in funds and joint ventures—GAAP
 
$
1,913

 
$
502

 
$
2,415

 
$
2,270

 
$
188

 
$
2,458

Adjustment to net gains on investments in funds and joint ventures(5)
 
(1,917
)
 
(502
)
 
(2,419
)
 
(2,333
)
 
(188
)
 
(2,521
)
Net Losses on Joint Ventures—GAAP
 
$
(4
)
 
$

 
$
(4
)
 
$
(63
)
 
$

 
$
(63
)
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income (loss) attributable to noncontrolling interests—GAAP
 
$
89,582

 
$
368

 
$
89,950

 
$
(6,874
)
 
$
(16
)
 
$
(6,890
)
Adjustment to net income (loss) attributable to noncontrolling interests(6)
 
(89,582
)
 
(368
)
 
(89,950
)
 
6,872

 
16

 
6,888

Net Loss Attributable to Noncontrolling Interests—Economic Income Basis—Non-GAAP
 
$

 
$

 
$

 
$
(2
)
 
$

 
$
(2
)
See Exhibit 6 for footnote references.





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, 2017
 
Year Ended December 31, 2016
 
 
Oz Funds Segment
 
Other Operations
 
Total
Company
 
Oz Funds Segment
 
Other Operations
 
Total
Company
Management fees—GAAP
 
$
298,547

 
$
20,911

 
$
319,458

 
$
512,406

 
$
20,750

 
$
533,156

Adjustment to management fees(1)
 
(20,151
)
 

 
(20,151
)
 
(38,424
)
 

 
(38,424
)
Management Fees—Economic Income Basis—Non-GAAP
 
278,396

 
20,911

 
299,307

 
473,982

 
20,750

 
494,732

 
 
 
 
 
 
 
 
 
 
 
 
 
Incentive Income—Economic Income Basis—GAAP and Non-GAAP
 
521,716

 
6,284

 
528,000

 
224,990

 
8,450

 
233,440

 
 
 
 
 
 
 
 
 
 
 
 
 
Other revenues—GAAP
 
6,619

 
158

 
6,777

 
1,978

 
28

 
2,006

Adjustment to other revenues(2)
 
(1,097
)
 

 
(1,097
)
 

 

 

Other Revenues—Economic Income Basis—Non-GAAP
 
5,522

 
158

 
5,680

 
1,978

 
28

 
2,006

Total Revenues—Economic Income Basis—Non-GAAP
 
$
805,634

 
$
27,353

 
$
832,987

 
$
700,950

 
$
29,228

 
$
730,178

 
 
 
 
 
 
 
 
 
 
 
 
 
Compensation and benefits—GAAP
 
$
390,934

 
$
45,615

 
$
436,549

 
$
379,968

 
$
29,915

 
$
409,883

Adjustment to compensation and benefits(3)
 
(59,222
)
 
(25,566
)
 
(84,788
)
 
(70,798
)
 
(9,319
)
 
(80,117
)
Compensation and Benefits—Economic Income Basis—Non-GAAP
 
$
331,712

 
$
20,049

 
$
351,761

 
$
309,170

 
$
20,596

 
$
329,766

 
 
 
 
 
 
 
 
 
 
 
 
 
Interest expense and general, administrative and other expenses—GAAP
 
$
173,090

 
$
2,172

 
$
175,262

 
$
666,430

 
$
3,814

 
$
670,244

Adjustment to interest expense and general, administrative and other expenses(4)
 
(31,773
)
 

 
(31,773
)
 
(57,693
)
 
(613
)
 
(58,306
)
Non-Compensation Expenses—Economic Income Basis—Non-GAAP
 
141,317

 
2,172

 
143,489

 
608,737

 
3,201

 
611,938

Settlements expense
 

 

 

 
(412,101
)
 

 
(412,101
)
Non-Compensation Expenses Excluding Settlements Expense—Economic Income Basis—Non-GAAP
 
$
141,317

 
$
2,172

 
$
143,489

 
$
196,636

 
$
3,201

 
$
199,837

 
 
 
 
 
 
 
 
 
 
 
 
 
Net gains on investments in funds and joint ventures—GAAP
 
$
2,074

 
$
1,391

 
$
3,465

 
$
3,104

 
$
656

 
$
3,760

Adjustment to net gains on investments in funds and joint ventures(5)
 
(2,078
)
 
(1,391
)
 
(3,469
)
 
(3,167
)
 
(656
)
 
(3,823
)
Net Losses on Joint Ventures—GAAP
 
$
(4
)
 
$

 
$
(4
)
 
$
(63
)
 
$

 
$
(63
)
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income (loss) attributable to noncontrolling interests—GAAP
 
$
130,603

 
$
1,027

 
$
131,630

 
$
(194,087
)
 
$
330

 
$
(193,757
)
Adjustment to net income (loss) attributable to noncontrolling interests(6)
 
(130,605
)
 
(1,027
)
 
(131,632
)
 
194,073

 
(330
)
 
193,743

Net Loss Attributable to Noncontrolling Interests—Economic Income Basis—Non-GAAP
 
$
(2
)
 
$

 
$
(2
)
 
$
(14
)
 
$

 
$
(14
)
See Exhibit 6 for footnote references.






EXHIBIT 6
OCH-ZIFF CAPITAL MANAGEMENT GROUP LLC
Footnotes to Non-GAAP Reconciliations
 
(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 gains realized on the sale of fixed assets.
(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. 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. Distributions to the Group D Units are also excluded, as management reviews operating performance at the Oz 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 losses on fixed assets, 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 gains and losses on investments in funds, as management does not consider these items to be reflective of the operating performance of the Company.
(6)
Adjustment to exclude amounts attributable to the executive managing directors on their interests in the Oz Operating Group, as management reviews the operating performance of the Company at the Oz Operating Group level. The Company conducts substantially all of its 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 7
OCH-ZIFF CAPITAL MANAGEMENT GROUP LLC
Summary Of Changes In Assets Under Management(1) (Unaudited)
(dollars in thousands)
 
Year Ended December 31, 2017
 
December 31, 2016
 
Inflows / (Outflows)
 
Distributions / Other Reductions
 
Appreciation / (Depreciation)(2)
 
December 31, 2017
 
 
 
 
 
 
 
 
 
 
Multi-strategy funds
$
21,084,548

 
$
(9,236,044
)
 
$

 
$
1,846,536

 
$
13,695,040

Credit
 
 
 
 
 
 
 
 
 
   Opportunistic credit funds
5,376,080

 
(337,114
)
 
(58,013
)
 
532,665

 
5,513,618

   Institutional Credit Strategies
8,019,510

 
2,114,320

 

 
3,161

 
10,136,991

Real estate funds
2,213,364

 
462,862

 
(181,586
)
 
550

 
2,495,190

Other
1,186,801

 
(616,132
)
 
(33,716
)
 
50,770

 
587,723

Total
$
37,880,303

 
$
(7,612,108
)
 
$
(273,315
)
 
$
2,433,682

 
$
32,428,562


 
Year Ended December 31, 2016
 
December 31, 2015

Inflows / (Outflows)

Distributions / Other Reductions

Appreciation / (Depreciation)(2)

December 31, 2016
 
 
 
 
 
 
 
 
 
 
Multi-strategy funds
$
29,510,248

 
$
(8,962,296
)
 
$

 
$
536,596

 
$
21,084,548

Credit
 
 
 
 
 
 
 
 
 
Opportunistic credit funds
5,383,629

 
(81,612
)
 
(685,327
)
 
759,390

 
5,376,080

Institutional Credit Strategies
7,241,680

 
784,165

 

 
(6,335
)
 
8,019,510

Real estate funds
2,048,559

 
324,826

 
(152,655
)
 
(7,366
)
 
2,213,364

Other
1,310,745

 
(58,672
)
 
(50,283
)
 
(14,989
)
 
1,186,801

Total
$
45,494,861

 
$
(7,993,589
)
 
$
(888,265
)
 
$
1,267,296

 
$
37,880,303

 
Year Ended December 31, 2015
 
December 31, 2014
 
Inflows / (Outflows)
 
Distributions / Other Reductions
 
Appreciation / (Depreciation)(2)
 
December 31, 2015
 
 
 
 
 
 
 
 
 
 
Multi-strategy funds
$
34,100,390

 
$
(4,719,269
)
 
$

 
$
129,127

 
$
29,510,248

Credit
 
 
 
 
 
 
 
 
 
Opportunistic credit funds
5,098,600

 
1,121,104

 
(727,190
)
 
(108,885
)
 
5,383,629

Institutional Credit Strategies
5,166,734

 
2,077,404

 

 
(2,458
)
 
7,241,680

Real estate funds
2,022,399

 
197,887

 
(165,587
)
 
(6,140
)
 
2,048,559

Other
1,146,292

 
146,439

 
(15,102
)
 
33,116

 
1,310,745

Total
$
47,534,415

 
$
(1,176,435
)
 
$
(907,879
)
 
$
44,760

 
$
45,494,861

(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.
(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. CLOs included within Institutional Credit Strategies are reflected at principal value and any change in appreciation/(depreciation) reflects a change in the par value of the underlying collateral within the CLOs.​





EXHIBIT 8
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, 2017
 
 
 
 
 
 
 
 
2017
 
2016
 
2015
 
 
 
2017
 
2016
 
2015
 
Gross
 
Net
 
Gross
 
Net
 
Gross
 
Net
 
Gross
 
Net
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Multi-strategy funds
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Oz Master Fund(2)
$
11,386,541

 
$
17,671,856

 
$
24,297,106

 
15.0
%
 
10.4
%
 
6.5
 %
 
3.8
 %
 
1.6
 %
 
-0.4
 %
 
16.8
%
(2) 
11.7
%
(2) 
Oz Asia Master Fund
607,178

 
937,232

 
1,200,213

 
30.7
%
 
23.1
%
 
-3.8
 %
 
-5.4
 %
 
13.8
 %
 
9.6
 %
 
10.5
%
 
6.3
%
 
Oz Europe Master Fund
245,179

 
425,203

 
899,388

 
8.3
%
 
4.8
%
 
5.8
 %
 
3.7
 %
 
8.9
 %
 
5.8
 %
 
11.5
%
 
7.5
%
 
Oz Enhanced Master Fund
635,197

 
817,971

 
1,130,747

 
27.8
%
 
20.2
%
 
10.2
 %
 
6.8
 %
 
0.9
 %
 
-1.1
 %
 
15.1
%
 
10.3
%
 
Other funds
820,945

 
1,232,286

 
1,982,794

 
n/m

 
n/m

 
n/m

 
n/m

 
n/m

 
n/m

 
n/m

 
n/m

 
 
13,695,040

 
21,084,548

 
29,510,248

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Credit
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Opportunistic credit funds:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Oz Credit Opportunities Master Fund
1,728,910

 
1,818,649

 
1,486,241

 
16.9
%
 
11.0
%
 
21.1
 %
 
18.0
 %
 
-4.4
 %
 
-5.2
 %
 
17.4
%
 
12.8
%
 
Customized Credit Focused Platform
3,001,740

 
2,762,882

 
2,460,716

 
14.6
%
 
10.9
%
 
26.3
 %
 
19.8
 %
 
 %
 
-0.6
 %
 
19.5
%
 
14.7
%
 
Closed-end opportunistic credit funds
325,312

 
316,360

 
919,786

 
See table below for return information on the Company’s closed-end opportunistic credit funds.
Other funds
457,656

 
478,189

 
516,886

 
n/m

 
n/m

 
n/m

 
n/m

 
n/m

 
n/m

 
n/m

 
n/m

 
 
5,513,618

 
5,376,080

 
5,383,629

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Institutional Credit Strategies
10,136,991

 
8,019,510

 
7,241,680

 
See the second following page for information on the Company’s Institutional Credit Strategies.
 
15,650,609

 
13,395,590

 
12,625,309

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Real estate funds
2,495,190

 
2,213,364

 
2,048,559

 
See the third following page for information on the Company’s real estate funds.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Other
587,723

 
1,186,801

 
1,310,745

 
n/m

 
n/m

 
n/m

 
n/m

 
n/m

 
n/m

 
n/m

 
n/m

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Total
$
32,428,562

 
$
37,880,303

 
$
45,494,861

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
n/m not meaningful
Please see the last page of this Exhibit 8 (“Fund Information—Footnotes”) for important disclosures related to the footnotes referenced herein.





EXHIBIT 8
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, 2017
 
 
 
 
 
 
 
 
 
 
 
IRR
 
 
 
2017
 
2016
 
2015
 
Total Commitments
 
Total Invested Capital(3)
 
Gross(4)
 
Net(5)
 
Gross
MOIC(6)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Closed-end Opportunistic Credit Funds (Investment Period)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Oz European Credit Opportunities Fund (2012-2015)(7)
$
46,116

 
$
79,760

 
$
230,662

 
$
459,600

 
$
305,487

 
16.5
%
 
12.5
%
 
1.5x
Oz Structured Products Domestic Fund II (2011-2014)(7)
130,090

 
110,538

 
301,534

 
326,850

 
326,850

 
20.1
%
 
15.8
%
 
2.0x
Oz Structured Products Offshore Fund II (2011-2014)(7)
136,687

 
108,822

 
267,429

 
304,531

 
304,531

 
17.6
%
 
13.7
%
 
1.9x
Oz Structured Products Offshore Fund I (2010-2013)(7)
5,748

 
6,033

 
23,495

 
155,098

 
155,098

 
24.0
%
 
19.2
%
 
2.1x
Oz Structured Products Domestic Fund I (2010-2013)(7)
5,187

 
4,836

 
14,621

 
99,986

 
99,986

 
22.8
%
 
18.2
%
 
2.0x
Other funds
1,484

 
6,371

 
82,045

 
298,250

 
298,250

 
n/m

 
n/m

 
n/m
 
$
325,312

 
$
316,360

 
$
919,786

 
$
1,644,315

 
$
1,490,202

 
 
 
 
 
 
n/m not meaningful
Please see the last page of this Exhibit 8 (“Fund Information—Footnotes”) for important disclosures related to the footnotes referenced herein.





EXHIBIT 8
OCH-ZIFF CAPITAL MANAGEMENT GROUP LLC
Fund Information — continued (Unaudited)
(dollars in thousands)
 
 
 
 
 
Assets Under Management as of December 31,
 
Initial Closing Date
(Most Recent Refinance Date)
 
Deal Size
 
2017
 
2016
 
2015
 
 
 
 
 
 
 
 
 
 
Institutional Credit Strategies
 
 
 
 
 
 
 
 
 
CLOs:
 
 
 
 
 
 
 
 
 
OZLM I
July 19, 2012 (July 24, 2017)
 
$
523,550

 
$
496,283

 
$
497,633

 
$
499,344

OZLM II
November 1, 2012 (October 31, 2016)
 
560,100

 
508,533

 
510,557

 
517,301

OZLM III
February 20, 2013 (December 15, 2016)
 
653,250

 
608,383

 
611,608