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Och-Ziff AUM gains 3.4% in quarter on more than $1 billion in net inflows

Och-Ziff CEO Robert S. Shafir

Och-Ziff Capital Management Group's assets under management totaled $33.9 billion as of June 30, up 3.4% from March 31 and up 2.1% from a year earlier, the firm's earnings release said Thursday.

The firm had total net inflows of $1.25 billion in the quarter ended June 30, compared to net inflows of $381 million in the prior quarter and net outflows of $1.4 billion in second quarter 2017.

The company's multistrategy hedge funds continued to experience net outflows, but the pace of redemptions slowed to $367 million in the three months ended June 30 vs. net outflows of $552 million in the prior quarter and net outflows of $2.2 billion in the quarter ended June 30, 2017.

CEO Robert S. Shafir told analysts during a conference call Thursday that the firm is "very focused" on growing the firm's multistrategy fund complex and noted that "it looks like we are bottoming out" regarding outflows from the funds.

He attributed his confidence about the future growth of the multistrategy hedge funds to favorable market conditions, strong performance of the flagship multistrategy hedge fund and investor demand.

Mr. Shafir also explained to analysts on the call that his strategy after becoming CEO earlier this year has been to invest in the firm's "scale funds in multistrategy, credit and real estate." He said the firm closed the European and Asian versions of the OZ Master Fund. The hedge funds had a total of about $800 million in assets.

Och-Ziff's institutional credit funds continued a run of net inflows with $1.6 billion flowing into the funds in the quarter vs. $1 billion in the previous quarter and $510 million the second quarter of 2017.

OZ's real estate funds attracted net inflows of $78 million in the quarter, compared to flat flows in the three months ended March 31 and net inflows of $417 million in the second quarter 2017.

Opportunistic credit funds had net outflows of $51 million in the second quarter, net outflows of $99 million in the prior quarter and net outflows of $71 million a year earlier.

Strategies in Och-Ziff's "other" category had net outflows of $35 million in the most recent quarter, net outflows of $570,000 in the quarter ended March 31 and net outflows of $71 million in the three months ended June 30, 2017.

Institutional credit funds managed a total of $12.75 billion as of June 30, with strong growth of 14.1% compared to three months earlier and up 49.7% from a year earlier.

Assets under management in the firm's multistrategy hedge funds totaled $12.7 billion as of June 30, down 4.7% from the previous quarter and down 21.1% from a year earlier.

Opportunistic credit funds ran a total of $5.5 billion as of June 30, up 1.7% from March 31 and down 3.3% from a year earlier.

Real estate fund assets of $2.5 billion as of June 30 were up 2.7% from the end of the previous quarter but were down 3% from a year earlier.

Assets in Och-Ziff's "other" category totaled $399 million as of June 30, down 9% from March 31 and down 36.9% from June 30, 2017.

Net revenue in the second quarter was $109.8 million, compared to $128.4 million in the prior quarter and $148.9 million in the year-over-year quarter.

Och-Ziff reported a net loss of $12.3 million vs. net income of $3.5 million the previous quarter and $13.1 million in the second quarter of 2017.