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Och-Ziff closes year with AUM down 14.4%

Och-Ziff chairman and former CEO Daniel S. Och

Och-Ziff Capital Management Group's assets under management fell 0.9% in the quarter and declined 14.4% in the year ended Dec. 31 to $32.4 billion, the firm's earnings report released Friday showed.

Net outflows for the year totaled $7.6 billion, fund distributions were $273 million and investment appreciation was $2.4 billion for a net decline of $5.5 billion, the earnings report showed.

By contrast, net outflows in the year ended Dec. 31, 2016 totaled, $8 billion, fund distributions were $888 million and investment gains were $1.3 billion for a net decline of $7.6 billion.

Och-Ziff does not provide quarterly asset flow information.

Och-Ziff's AUM as of Dec. 31 was down $15.9 billion, or 32.9%, compared to the firm's peak AUM of $48.3 billion as of March 31, 2015.

Assets managed in the company's multistrategy hedge funds fell 35% to $13.7 billion in the year ended Dec. 31 and assets managed in OZ real estate funds were up 12.7% to $2.5 billion.

OZ credit funds, on the other hand, showed growth in the year ended Dec. 31, with institutional credit funds up 26.4% to $10.1 billion while assets managed in opportunistic credit strategies were up 2.6% to $5.5 billion.

Assets managed in OZ's "other" category were down 50% to $600 million in the year ended Dec. 31.

Och-Ziff's AUM rose an estimated 2.8% to $33.3 billion as of Feb. 1 thanks to net inflows in January of $263 million and investment gains of $620 million.

For the quarter ended Dec. 31, OZ's net income was $6.6 million and revenue was $438 million, compared to $2.9 million and $281 million in the fourth quarter of 2016, respectively..

Daniel S. Och, the firm's chairman and former CEO, stressed during an earnings call Friday that the firm's multistrategy, credit and real estate funds "all (had) very strong results in 2017, and we started up 2018 with the best January performance in the history of the OZ Master Fund."

The OZ Master Fund returned a net 10.4% in 2017, compared to a net 3.8% in 2016, earnings report data showed.

"Our primary focus is on building a pipeline of client mandates across all of our businesses and we believe that our strong performance should translate to inflows, although we cannot pinpoint the timing," he added.

Mr. Och also told analysts that "as this will be my last earnings call, I want to conclude with a few thoughts. I am proud of the firm that my partners and I built over the last 24 years. I plan to do all I can to continue to contribute to the firm's success. Together with our deep bench of investment talent and infrastructure support, I believe we are well-positioned for the future."

Robert S. Shafir succeeded Mr. Och as Och-Ziff's CEO on Feb. 5. He served as CEO of Credit Suisse Americas from 2008 to 2016.