Losses rise at Och-Ziff’s hedge funds
OCH-ZIFF Capital Management Group’s quarterly profit fell as its performance income plunged last year when wild market swings left some of its portfolios in the red.
Calling 2011 “particularly volatile”, chief executive Daniel Och said yesterday dramatic market movements made for the most difficult conditions since 2008.
But he also said things have improved in recent weeks and that the company’s conservative and steady approach is paying off because returns at its four main portfolios were already stronger in January than in 2011.
Last year, however, was a different story. The New York-based company, one of only a handful of publicly traded hedge fund firms, reported a net loss of $137m, related largely to expenses from the IPO. A year ago the loss stood at $22.8m.
Excluding costs, it posted distributable earnings of $16.8m, down from $303.1m a year ago.
Incentive income plunged 90 per cent to $43.1m.
Och-Ziff’s biggest portfolio, the OZ Master Fund, slipped 0.5 per cent last year while the European fund fell 4.9 per cent and the Asian fund dropped 3.8 per cent.
The average hedge fund lost five per cent and some prominent traders lost significantly more.