DELAWARE | 001-33805 | 26-0354783 | ||
(State or Other Jurisdiction of Incorporation) | (Commission File Number) | (IRS Employer Identification No.) |
9 West 57th Street, New York, New York | 10019 | |
(Address of Principal Executive Offices) | (Zip Code) |
¨ | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
¨ | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
¨ | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
¨ | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Exhibit No. | Description | ||
99.1 | Press release of the Company, dated November 4, 2014, reporting financial results for the quarter ended September 30, 2014, and the announcement of a dividend. |
OCH-ZIFF CAPITAL MANAGEMENT GROUP LLC | |||
(Registrant) | |||
By: | /s/ Joel M. Frank | ||
Joel M. Frank | |||
Chief Financial Officer, Senior Chief Operating Officer and Executive Managing Director |
Exhibit No. | Description | ||
99.1 | Press release of the Company, dated November 4, 2014, reporting financial results for the quarter ended September 30, 2014, and the announcement of a dividend. |
• | Distributable Earnings of $116.7 million, or $0.23 per Adjusted Class A Share, for the 2014 third quarter, and $334.9 million, or $0.66 per Adjusted Class A Share, for the first nine months 2013. |
• | Estimated assets under management of $46.0 billion as of November 1, 2014, which reflected year-to-date capital net inflows of approximately $4.8 billion and performance-related appreciation of $977.7 million. |
• | Estimated year-to-date net returns through October 31, 2014 of the OZ Master Fund of +2.1%. |
% Change(1) | |||||||||||||||||
(dollars in billions) | September 30, 2014 | December 31, 2013 | September 30, 2013 | Sep. 2014 vs. Dec. 2013 | Sep. 2014 vs. Sep. 2013 | ||||||||||||
Multi-strategy funds | |||||||||||||||||
OZ Master Fund | $ | 27.6 | $ | 25.2 | $ | 23.5 | 9 | % | 17 | % | |||||||
OZ Asia Master Fund | 1.4 | 1.3 | 1.3 | 1 | % | 7 | % | ||||||||||
OZ Europe Master Fund | 1.2 | 1.4 | 1.5 | -15 | % | -19 | % | ||||||||||
Other multi-strategy funds | 3.7 | 3.8 | 3.6 | -3 | % | 1 | % | ||||||||||
Multi-strategy funds | 33.9 | 31.7 | 29.9 | 7 | % | 13 | % | ||||||||||
Credit funds | 5.2 | 4.4 | 4.2 | 18 | % | 22 | % | ||||||||||
CLOs | 4.7 | 2.6 | 2.1 | 80 | % | 120 | % | ||||||||||
Real estate funds | 1.9 | 0.8 | 0.9 | 130 | % | 126 | % | ||||||||||
Other | 1.1 | 0.7 | 0.7 | 79 | % | 70 | % | ||||||||||
Total | $ | 46.8 | $ | 40.2 | $ | 37.8 | 16 | % | 24 | % |
(1) | Rounding differences may occur. |
2014 | ||||||||||||||
July | August | September | 3Q | YTD Sept | ||||||||||
OZ Master Fund | -0.08 | % | 0.52 | % | -0.06 | % | 0.38 | % | 2.54 | % | ||||
OZ Asia Master Fund | 2.61 | % | -0.14 | % | 0.91 | % | 3.40 | % | -3.49 | % | ||||
OZ Europe Master Fund | 0.50 | % | 0.15 | % | 0.59 | % | 1.24 | % | -0.70 | % |
(1) | Please see important disclosures on Exhibit 7 that accompanies this press release. |
• | 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. |
• | 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. |
EXHIBIT 1 | |||||||||||||||
OCH-ZIFF CAPITAL MANAGEMENT GROUP LLC | |||||||||||||||
Consolidated Statements of Comprehensive Income (Unaudited) | |||||||||||||||
(dollars in thousands, except per share amounts) | |||||||||||||||
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||
2014 | 2013 | 2014 | 2013 | ||||||||||||
Revenues | |||||||||||||||
Management fees | $ | 171,906 | $ | 140,666 | $ | 494,707 | $ | 406,829 | |||||||
Incentive income | 28,011 | 72,338 | 91,022 | 195,403 | |||||||||||
Other revenues | 284 | 203 | 931 | 1,386 | |||||||||||
Income of consolidated Och-Ziff funds | 106,484 | 66,560 | 267,974 | 191,524 | |||||||||||
Total Revenues | 306,685 | 279,767 | 854,634 | 795,142 | |||||||||||
Expenses | |||||||||||||||
Compensation and benefits | 74,115 | 68,238 | 206,664 | 188,936 | |||||||||||
Reorganization expenses | 4,023 | 4,022 | 12,065 | 12,064 | |||||||||||
Interest expense | 1,688 | 1,827 | 5,047 | 5,292 | |||||||||||
General, administrative and other | 23,160 | 36,396 | 102,303 | 115,991 | |||||||||||
Expenses of consolidated Och-Ziff funds | 50,082 | 31,972 | 127,215 | 70,809 | |||||||||||
Total Expenses | 153,068 | 142,455 | 453,294 | 393,092 | |||||||||||
Other Income (Loss) | |||||||||||||||
Net gains on investments in Och-Ziff funds and joint ventures | 76 | 531 | 5,949 | 1,253 | |||||||||||
Net gains (losses) of consolidated Och-Ziff funds | (4,769 | ) | 43,081 | 115,498 | 186,094 | ||||||||||
Total Other Income (Loss) | (4,693 | ) | 43,612 | 121,447 | 187,347 | ||||||||||
Income Before Income Taxes | 148,924 | 180,924 | 522,787 | 589,397 | |||||||||||
Income taxes | 36,110 | 11,996 | 91,029 | 50,394 | |||||||||||
Consolidated and Total Comprehensive Net Income | $ | 112,814 | $ | 168,928 | $ | 431,758 | $ | 539,003 | |||||||
Allocation of Consolidated and Total Comprehensive Net Income | |||||||||||||||
Class A Shareholders | $ | 23,202 | $ | 28,852 | $ | 57,770 | $ | 62,705 | |||||||
Noncontrolling interests | 83,235 | 137,643 | 343,896 | 471,156 | |||||||||||
Redeemable noncontrolling interests | 6,377 | 2,433 | 30,092 | 5,142 | |||||||||||
$ | 112,814 | $ | 168,928 | $ | 431,758 | $ | 539,003 | ||||||||
Earnings Per Class A Share | |||||||||||||||
Basic | $ | 0.13 | $ | 0.18 | $ | 0.33 | $ | 0.41 | |||||||
Diluted | $ | 0.09 | $ | 0.15 | $ | 0.32 | $ | 0.40 | |||||||
Weighted-Average Class A Shares Outstanding | |||||||||||||||
Basic | 172,959,765 | 156,752,496 | 172,541,709 | 153,160,992 | |||||||||||
Diluted | 481,078,788 | 475,281,312 | 479,936,636 | 156,667,500 |
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 September 30, 2014 | Three Months Ended September 30, 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 | $ | 18,781 | $ | 4,421 | $ | 23,202 | $ | 27,045 | $ | 1,807 | $ | 28,852 | ||||||||||||
Net income allocated to the Och-Ziff Operating Group A Units | 57,946 | — | 57,946 | 71,600 | — | 71,600 | ||||||||||||||||||
Equity-based compensation | 27,987 | 741 | 28,728 | 36,389 | — | 36,389 | ||||||||||||||||||
Income taxes | 36,111 | (1 | ) | 36,110 | 11,996 | — | 11,996 | |||||||||||||||||
Adjustment for incentive income allocations from consolidated funds subject to clawback | (2,175 | ) | 23,910 | 21,735 | (2,501 | ) | (1,580 | ) | (4,081 | ) | ||||||||||||||
Allocations to Och-Ziff Operating Group D Units | 4,944 | — | 4,944 | — | — | — | ||||||||||||||||||
Adjustment for expenses related to compensation and profit-sharing arrangements based on fund investment performance | 3,909 | (5,820 | ) | (1,911 | ) | 4,324 | — | 4,324 | ||||||||||||||||
Reorganization expenses | 4,023 | — | 4,023 | 4,022 | — | 4,022 | ||||||||||||||||||
Changes in tax receivable agreement liability | (20,653 | ) | — | (20,653 | ) | (1,064 | ) | — | (1,064 | ) | ||||||||||||||
Depreciation and amortization | 1,420 | 187 | 1,607 | 1,833 | 189 | 2,022 | ||||||||||||||||||
Other adjustments | (76 | ) | (63 | ) | (139 | ) | (109 | ) | 270 | 161 | ||||||||||||||
Economic Income—Non-GAAP | $ | 132,217 | $ | 23,375 | 155,592 | $ | 153,535 | $ | 686 | 154,221 | ||||||||||||||
Adjusted Income Taxes—Non-GAAP(1) | (38,906 | ) | (23,957 | ) | ||||||||||||||||||||
Distributable Earnings—Non-GAAP | $ | 116,686 | $ | 130,264 | ||||||||||||||||||||
Weighted-Average Class A Shares Outstanding | 172,959,765 | 156,752,496 | ||||||||||||||||||||||
Weighted-Average Partner Units | 320,857,917 | 313,251,327 | ||||||||||||||||||||||
Weighted-Average Class A Restricted Share Units (RSUs) | 15,737,431 | 14,410,711 | ||||||||||||||||||||||
Weighted-Average Adjusted Class A Shares | 509,555,113 | 484,414,534 | ||||||||||||||||||||||
Distributable Earnings Per Adjusted Class A Share—Non-GAAP | $ | 0.23 | $ | 0.27 |
(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) | ||||||||||||||||||||||||
Nine Months Ended September 30, 2014 | Nine Months Ended September 30, 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 | $ | 56,218 | $ | 1,552 | $ | 57,770 | $ | 49,355 | $ | 13,350 | $ | 62,705 | ||||||||||||
Net income allocated to the Och-Ziff Operating Group A Units | 180,508 | — | 180,508 | 207,172 | — | 207,172 | ||||||||||||||||||
Equity-based compensation | 83,539 | 1,058 | 84,597 | 99,426 | — | 99,426 | ||||||||||||||||||
Income taxes | 90,919 | 110 | 91,029 | 50,394 | — | 50,394 | ||||||||||||||||||
Adjustment for incentive income allocations from consolidated funds subject to clawback | (20,394 | ) | 24,006 | 3,612 | (11,619 | ) | (14,180 | ) | (25,799 | ) | ||||||||||||||
Allocations to Och-Ziff Operating Group D Units | 14,418 | — | 14,418 | 5,590 | — | 5,590 | ||||||||||||||||||
Adjustment for expenses related to compensation and profit-sharing arrangements based on fund investment performance | 7,202 | (884 | ) | 6,318 | 7,603 | — | 7,603 | |||||||||||||||||
Reorganization expenses | 12,065 | — | 12,065 | 12,064 | — | 12,064 | ||||||||||||||||||
Changes in tax receivable agreement liability | (24,472 | ) | — | (24,472 | ) | (1,047 | ) | — | (1,047 | ) | ||||||||||||||
Depreciation and amortization | 4,680 | 558 | 5,238 | 5,784 | 560 | 6,344 | ||||||||||||||||||
Other adjustments | (1,059 | ) | (241 | ) | (1,300 | ) | (261 | ) | 2,757 | 2,496 | ||||||||||||||
Economic Income—Non-GAAP | $ | 403,624 | $ | 26,159 | 429,783 | $ | 424,461 | $ | 2,487 | 426,948 | ||||||||||||||
Adjusted Income Taxes—Non-GAAP(1) | (94,850 | ) | (82,291 | ) | ||||||||||||||||||||
Distributable Earnings—Non-GAAP | $ | 334,933 | $ | 344,657 | ||||||||||||||||||||
Weighted-Average Class A Shares Outstanding | 172,541,709 | 153,160,992 | ||||||||||||||||||||||
Weighted-Average Partner Units | 320,804,735 | 314,731,925 | ||||||||||||||||||||||
Weighted-Average Class A Restricted Share Units (RSUs) | 14,514,598 | 13,087,356 | ||||||||||||||||||||||
Weighted-Average Adjusted Class A Shares | 507,861,042 | 480,980,273 | ||||||||||||||||||||||
Distributable Earnings Per Adjusted Class A Share—Non-GAAP | $ | 0.66 | $ | 0.72 |
(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 September 30, 2014 | Three Months Ended September 30, 2013 | |||||||||||||||||||||||
Och-Ziff Funds Segment | Other Operations | Total Company | Och-Ziff Funds Segment | Other Operations | Total Company | |||||||||||||||||||
Management fees—GAAP | $ | 166,837 | $ | 5,069 | $ | 171,906 | $ | 137,981 | $ | 2,685 | $ | 140,666 | ||||||||||||
Adjustment to management fees(1) | (3,569 | ) | — | (3,569 | ) | (2,495 | ) | — | (2,495 | ) | ||||||||||||||
Management Fees—Economic Income Basis—Non-GAAP | 163,268 | 5,069 | 168,337 | 135,486 | 2,685 | 138,171 | ||||||||||||||||||
Incentive income—GAAP | 28,011 | — | 28,011 | 72,338 | — | 72,338 | ||||||||||||||||||
Adjustment to incentive income(2) | 3,100 | 29,355 | 32,455 | — | — | — | ||||||||||||||||||
Incentive Income—Economic Income Basis—Non-GAAP | 31,111 | 29,355 | 60,466 | 72,338 | — | 72,338 | ||||||||||||||||||
Other revenues | 277 | 7 | 284 | 197 | 6 | 203 | ||||||||||||||||||
Total Revenues—Economic Income Basis—Non-GAAP | $ | 194,656 | $ | 34,431 | $ | 229,087 | $ | 208,021 | $ | 2,691 | $ | 210,712 | ||||||||||||
Compensation and benefits—GAAP | $ | 69,461 | $ | 4,654 | $ | 74,115 | $ | 67,133 | $ | 1,105 | $ | 68,238 | ||||||||||||
Adjustment to compensation and benefits(3) | (36,841 | ) | 5,080 | (31,761 | ) | (40,713 | ) | — | (40,713 | ) | ||||||||||||||
Compensation and Benefits—Economic Income Basis—Non-GAAP | $ | 32,620 | $ | 9,734 | $ | 42,354 | $ | 26,420 | $ | 1,105 | $ | 27,525 | ||||||||||||
Interest expense and general, administrative and other expenses—GAAP | $ | 23,337 | $ | 1,511 | $ | 24,848 | $ | 37,447 | $ | 776 | $ | 38,223 | ||||||||||||
Adjustment to interest expense and general, administrative and other expenses(4) | 6,487 | (189 | ) | 6,298 | (8,962 | ) | (190 | ) | (9,152 | ) | ||||||||||||||
Non-Compensation Expenses—Economic Income Basis—Non-GAAP | $ | 29,824 | $ | 1,322 | $ | 31,146 | $ | 28,485 | $ | 586 | $ | 29,071 | ||||||||||||
Net gains on investments in Och-Ziff funds and joint ventures—GAAP | $ | 76 | $ | — | $ | 76 | $ | 531 | $ | — | $ | 531 | ||||||||||||
Adjustment to net gains on investments in Och-Ziff funds and joint ventures(5) | (76 | ) | — | (76 | ) | (111 | ) | — | (111 | ) | ||||||||||||||
Net Gains on Joint Ventures—GAAP | $ | — | $ | — | $ | — | $ | 420 | $ | — | $ | 420 | ||||||||||||
Net income allocated to noncontrolling interests—GAAP | $ | 44,385 | $ | 38,850 | $ | 83,235 | $ | 100,481 | $ | 37,162 | $ | 137,643 | ||||||||||||
Adjustment to net income allocated to noncontrolling interests(6) | (44,390 | ) | (38,850 | ) | (83,240 | ) | (100,480 | ) | (36,848 | ) | (137,328 | ) | ||||||||||||
Net Income (Loss) Allocated to Noncontrolling Interests—Economic Income Basis—Non-GAAP | $ | (5 | ) | $ | — | $ | (5 | ) | $ | 1 | $ | 314 | $ | 315 |
(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. Further, expenses related to compensation and profit-sharing arrangements based on fund investment performance are recognized at the end of the relevant performance measurement 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 (losses) on investments in Och-Ziff funds, as management does not consider these gains (losses) 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) | ||||||||||||||||||||||||
Nine Months Ended September 30, 2014 | Nine Months Ended September 30, 2013 | |||||||||||||||||||||||
Och-Ziff Funds Segment | Other Operations | Total Company | Och-Ziff Funds Segment | Other Operations | Total Company | |||||||||||||||||||
Management fees—GAAP | $ | 484,396 | $ | 10,311 | $ | 494,707 | $ | 398,604 | $ | 8,225 | $ | 406,829 | ||||||||||||
Adjustment to management fees(1) | (12,156 | ) | — | (12,156 | ) | (7,405 | ) | — | (7,405 | ) | ||||||||||||||
Management Fees—Economic Income Basis—Non-GAAP | 472,240 | 10,311 | 482,551 | 391,199 | 8,225 | 399,424 | ||||||||||||||||||
Incentive income—GAAP | 91,022 | — | 91,022 | 195,403 | — | 195,403 | ||||||||||||||||||
Adjustment to incentive income(2) | 13,476 | 29,355 | 42,831 | 1,114 | — | 1,114 | ||||||||||||||||||
Incentive Income—Economic Income Basis—Non-GAAP | 104,498 | 29,355 | 133,853 | 196,517 | — | 196,517 | ||||||||||||||||||
Other revenues | 910 | 21 | 931 | 1,373 | 13 | 1,386 | ||||||||||||||||||
Total Revenues—Economic Income Basis—Non-GAAP | $ | 577,648 | $ | 39,687 | $ | 617,335 | $ | 589,089 | $ | 8,238 | $ | 597,327 | ||||||||||||
Compensation and benefits—GAAP | $ | 194,614 | $ | 12,050 | $ | 206,664 | $ | 185,685 | $ | 3,251 | $ | 188,936 | ||||||||||||
Adjustment to compensation and benefits(3) | (105,159 | ) | (174 | ) | (105,333 | ) | (112,619 | ) | — | (112,619 | ) | |||||||||||||
Compensation and Benefits—Economic Income Basis—Non-GAAP | $ | 89,455 | $ | 11,876 | $ | 101,331 | $ | 73,066 | $ | 3,251 | $ | 76,317 | ||||||||||||
Interest expense and general, administrative and other expenses—GAAP | $ | 105,138 | $ | 2,212 | $ | 107,350 | $ | 119,326 | $ | 1,957 | $ | 121,283 | ||||||||||||
Adjustment to interest expense and general, administrative and other expenses(4) | (15,689 | ) | (560 | ) | (16,249 | ) | (26,797 | ) | (560 | ) | (27,357 | ) | ||||||||||||
Non-Compensation Expenses—Economic Income Basis—Non-GAAP | $ | 89,449 | $ | 1,652 | $ | 91,101 | $ | 92,529 | $ | 1,397 | $ | 93,926 | ||||||||||||
Net gains on investments in Och-Ziff funds and joint ventures—GAAP | $ | 5,949 | $ | — | $ | 5,949 | $ | 1,253 | $ | — | $ | 1,253 | ||||||||||||
Adjustment to net gains on investments in Och-Ziff funds and joint ventures(5) | (1,075 | ) | — | (1,075 | ) | (293 | ) | — | (293 | ) | ||||||||||||||
Net Gains on Joint Ventures—GAAP | $ | 4,874 | $ | — | $ | 4,874 | $ | 960 | $ | — | $ | 960 | ||||||||||||
Net income allocated to noncontrolling interests—GAAP | $ | 235,917 | $ | 107,979 | $ | 343,896 | $ | 310,010 | $ | 161,146 | $ | 471,156 | ||||||||||||
Adjustment to net income allocated to noncontrolling interests(6) | (235,923 | ) | (107,979 | ) | (343,902 | ) | (310,017 | ) | (160,043 | ) | (470,060 | ) | ||||||||||||
Net Income (Loss) Allocated to Noncontrolling Interests—Economic Income Basis—Non-GAAP | $ | (6 | ) | $ | — | $ | (6 | ) | $ | (7 | ) | $ | 1,103 | $ | 1,096 |
(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. Further, expenses related to compensation and profit-sharing arrangements based on fund investment performance are recognized at the end of the relevant performance measurement 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 (losses) on investments in Och-Ziff funds, as management does not consider these gains (losses) 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 | |||||||||||||||||||
Financial Supplement (Unaudited) | |||||||||||||||||||
(dollars in millions) | |||||||||||||||||||
Three Months Ended September 30, 2014 | Nine Months Ended September 30, 2014 | Year Ended December 31, | |||||||||||||||||
2013 | 2012 | 2011 | |||||||||||||||||
Total Assets Under Management(1) | |||||||||||||||||||
Beginning of period balance | $ | 45,884 | $ | 40,239 | $ | 32,604 | $ | 28,766 | $ | 27,935 | |||||||||
Net flows | 639 | 5,435 | 3,104 | 480 | 1,116 | ||||||||||||||
Appreciation (depreciation)(2) | 260 | 1,109 | 4,531 | 3,358 | (285 | ) | |||||||||||||
End of Period Balance | $ | 46,783 | $ | 46,783 | $ | 40,239 | $ | 32,604 | $ | 28,766 | |||||||||
Assets Under Management by Fund(1) | |||||||||||||||||||
OZ Master Fund | $ | 27,584 | $ | 25,211 | $ | 21,780 | $ | 20,198 | |||||||||||
OZ Asia Master Fund | 1,359 | 1,342 | 1,394 | 1,620 | |||||||||||||||
OZ Europe Master Fund | 1,220 | 1,437 | 1,961 | 2,272 | |||||||||||||||
Net Returns(3) | |||||||||||||||||||
OZ Master Fund | 0.4 | % | 2.5 | % | 13.9 | % | 11.6 | % | -0.5 | % | |||||||||
OZ Asia Master Fund | 3.4 | % | -3.5 | % | 13.5 | % | 7.0 | % | -3.8 | % | |||||||||
OZ Europe Master Fund | 1.2 | % | -0.7 | % | 12.4 | % | 8.6 | % | -4.9 | % |
(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 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 (“Special Investments”) 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. |
(3) | Net return represents a composite of the average return of the feeder funds that comprise each of the master funds presented. Net return is presented on a total return basis, net of all fees and expenses (except incentive income on Special Investments that could reduce returns on these investments at the time of realization), and includes the reinvestment of all dividends and other income. Performance includes realized and unrealized gains and losses attributable to Special Investments and initial public offering investments that are not allocated to all investors in the feeder funds. Investors that were not allocated Special Investments and/or initial public offering investments may experience materially different returns. |
EXHIBIT 7 | |||||||||||||||||||||||||||||||||||||||
OCH-ZIFF CAPITAL MANAGEMENT GROUP LLC | |||||||||||||||||||||||||||||||||||||||
Fund Performance of Certain Och-Ziff Funds (Unaudited) | |||||||||||||||||||||||||||||||||||||||
2014 | |||||||||||||||||||||||||||||||||||||||
January | February | March | 1Q | April | May | June | 2Q | July | August | September | 3Q | YTD Sept | |||||||||||||||||||||||||||
Net Returns(1) | |||||||||||||||||||||||||||||||||||||||
OZ Master Fund | -0.16 | % | 2.51 | % | -1.87 | % | 0.43 | % | -1.23 | % | 1.53 | % | 1.43 | % | 1.72 | % | -0.08 | % | 0.52 | % | -0.06 | % | 0.38 | % | 2.54 | % | |||||||||||||
OZ Asia Master Fund | -3.20 | % | 0.51 | % | -4.09 | % | -6.69 | % | -2.16 | % | -0.16 | % | 2.40 | % | 0.03 | % | 2.61 | % | -0.14 | % | 0.91 | % | 3.40 | % | -3.49 | % | |||||||||||||
OZ Europe Master Fund | -0.03 | % | 1.29 | % | -1.28 | % | -0.04 | % | -1.24 | % | -1.00 | % | 0.35 | % | -1.89 | % | 0.50 | % | 0.15 | % | 0.59 | % | 1.24 | % | -0.70 | % | |||||||||||||
S&P 500 Index(2) | -3.46 | % | 4.57 | % | 0.84 | % | 1.81 | % | 0.74 | % | 2.35 | % | 2.07 | % | 5.23 | % | -1.38 | % | 4.00 | % | -1.40 | % | 1.13 | % | 8.34 | % | |||||||||||||
MSCI World Index(2) | -3.22 | % | 4.26 | % | 0.24 | % | 1.15 | % | 0.78 | % | 2.34 | % | 1.42 | % | 4.61 | % | -0.76 | % | 2.68 | % | -0.95 | % | 0.93 | % | 6.81 | % | |||||||||||||
2013 | |||||||||||||||||||||||||||||||||||||||
January | February | March | April | May | June | July | August | September | October | November | December | Full Year | |||||||||||||||||||||||||||
Net Returns(1) | |||||||||||||||||||||||||||||||||||||||
OZ Master Fund | 2.37 | % | 0.41 | % | 1.18 | % | 1.78 | % | 1.28 | % | -0.69 | % | 1.07 | % | 0.07 | % | 1.91 | % | 1.15 | % | 1.04 | % | 1.53 | % | 13.87 | % | |||||||||||||
OZ Asia Master Fund | 3.64 | % | 0.31 | % | 1.56 | % | 4.68 | % | -0.93 | % | -0.90 | % | -0.51 | % | 0.31 | % | 1.54 | % | 0.10 | % | 1.59 | % | 1.51 | % | 13.51 | % | |||||||||||||
OZ Europe Master Fund | 3.41 | % | 0.29 | % | 0.14 | % | -0.45 | % | 1.51 | % | -0.01 | % | 1.67 | % | -0.45 | % | 1.53 | % | 2.05 | % | 1.49 | % | 0.60 | % | 12.36 | % | |||||||||||||
S&P 500 Index(2) | 5.18 | % | 1.36 | % | 3.75 | % | 1.93 | % | 2.34 | % | -1.33 | % | 5.09 | % | -2.90 | % | 3.14 | % | 4.60 | % | 3.05 | % | 2.53 | % | 32.39 | % | |||||||||||||
MSCI World Index(2) | 5.40 | % | 1.53 | % | 2.73 | % | 2.86 | % | 1.53 | % | -2.38 | % | 4.76 | % | -2.02 | % | 3.77 | % | 3.98 | % | 2.22 | % | 2.13 | % | 29.57 | % |
(1) | Net return represents a composite of the average return of the feeder funds that comprise each of the master funds presented. Net return is presented on a total return basis, net of all fees and expenses (except incentive income on unrealized gains attributable to investments 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 (“Special Investments”) that could reduce returns on these investments at the time of realization), and includes the reinvestment of all dividends and other income. Performance includes realized and unrealized gains and losses attributable to Special Investments and initial public offering investments that are not allocated to all investors in the feeder funds. Investors that were not allocated Special Investments and/or initial public offering investments may experience materially different returns. |
(2) | This comparison shows the returns of the S&P 500 Index (SPTR) and the MSCI World Index (GDDLWI) (“Broader Market Indices”) against certain Och-Ziff funds (the “funds”). This comparison is intended solely for illustrative purposes to show a historical comparison of the funds to the broader equity markets, as represented by the Broader Market Indices, and should not be considered as an indication of how the funds will perform relative to the Broader Market Indices in the future. The Broader Market Indices are not performance benchmarks of the funds. The funds are not managed to correlate in any way with the returns or composition of the Broader Market Indices, which are unmanaged. It is not possible to invest in an unmanaged index. You should not assume that there is any material overlap between the securities in the funds and those that comprise the Broader Market Indices. The S&P 500 Index is an equity index whose value is calculated as the free-float weighted average of the share prices of the 500 large-cap companies listed on the NYSE and NASDAQ. The MSCI World Index is a free-float adjusted market capitalization weighted index that is designed to measure the equity market performance of developed markets. Returns of the Broader Market Indices have not been reduced by fees and expenses associated with investing in securities and include the reinvestment of dividends. |
EXHIBIT 8 | ||||||||
OCH-ZIFF CAPITAL MANAGEMENT GROUP LLC | ||||||||
Financial Supplement (Unaudited) | ||||||||
As of October 1, 2014 | ||||||||
OZ Master Fund by Investment Strategy | Investors by Type(1) | |||||||
Long/Short Equity Special Situations | 63 | % | Pensions | 33 | % | |||
Structured Credit | 14 | % | Private Banks | 17 | % | |||
Merger Arbitrage | 8 | % | Corporate, Institutional and Other | 15 | % | |||
Convertible and Derivative Arbitrage | 7 | % | Fund-of-Funds | 13 | % | |||
Corporate Credit | 7 | % | Foundations and Endowments | 10 | % | |||
Private Investments | 1 | % | Family Offices and Individuals | 6 | % | |||
Cash | 0 | % | Related Parties | 6 | % | |||
Assets Under Management by Geography(2) | Investors by Geography(1) | |||||||
North America | 70 | % | North America | 72 | % | |||
Europe | 18 | % | Europe | 15 | % | |||
Asia | 12 | % | Asia and Other | 13 | % |
(1) | Presents the composition of the Company’s fund investor base across its funds excluding investors in its CLOs. |
(2) | The North American exposure includes the United States, Canada, Central America and South America. The European exposure includes Africa and the Middle East. The Asian exposure includes Australia and New Zealand. |