Hedge fund Och-Ziff Capital files for IPO

Discussion in 'Wall St. News' started by WallstYouth, Jul 2, 2007.

  1. NEW YORK (Reuters) - Och-Ziff Capital Management Group LLC, a multi-strategy investment fund with about $26.8 billion under management, filed for an initial public offering on Monday, making it the latest alternative investment firm to seek a public listing.

    New York-based Och-Ziff said it would offer up to $2 billion worth of Class A shares on the New York Stock Exchange, representing limited liability company interests, under the symbol OZM (NYSE:OZM - News).

    Och-Ziff was founded in 1994 by former Goldman Sachs trader Daniel Och and the billionaire Ziff publishing family. It is well regarded in the secretive, $1.5 trillion hedge fund world, particularly for its acumen in distressed debt and restructuring strategies.

    Och-Ziff also has major operations in merger arbitrage, convertible arbitrage, private equity and real estate.

    The offering comes amid a spate of IPOs and planned offerings by investment firms, including Blackstone Group (NYSE:BX - News), Fortress Investment Group (NYSE:FIG - News), GLG Partners and Third Point LLC.

    Others are expected to follow, allowing such firms to raise money from the public markets rather than exclusively through wealthy families and institutional investors.

    "It's a continuation of a recent trend, with a high-profile name monetizing some enterprise value," said Ferenc Sanderson, senior hedge fund research analyst at Lipper Inc., a unit of Reuters.

    Och-Ziff said it is going public to attract and retain investment talent, develop new strategies and allow senior management to sell stakes in the firm. It said those managers will "reinvest all of their after-tax proceeds into certain of our funds."

    Its flagship multi-strategy fund, OZ Master Fund Ltd., which makes up about 65 percent of funds under management, generated a net annualized return of 12.2 percent over the last five years, according to its registration statement.

    "One of the principal purposes of this offering is to further increase the investment of our existing partners in our funds which will further align the interests of our existing partners and our fund investors," Och-Ziff said in the S-1 statement.

    "We seek to deliver consistent, positive, risk-adjusted returns throughout market cycles," it added.

    Och-Ziff, a firm with 18 partners, 27 managing directors and 300 employees, has grown from $5.8 billion in December, 2002 to nearly $27 billion today, putting it in a league with the top "alternative asset" firms, which basically manage any strategy that doesn't include "long only" stock and bond funds.

    Alternative strategies, such as hedge, buyout, real estate and venture funds, have grown rapidly in recent years as investors seek consistent returns that aren't correlated to the broader markets.

    Och spent more than 11 years at Goldman Sachs, where he was head of proprietary equities trading, among other titles.

    Och founded Och-Ziff 13 years ago, backed by Ziff Brothers Investments LLC, which is an investment arm of the billionaire Ziff-Davis publishing family, which publishes PC Magazine, Car & Driver and other publications.

    Goldman Sachs and Lehman Brothers are serving as co-lead managers for the offering.
  2. You see, Wall St. is just one big shit sandwich. If you didn't get your fill on BX, along comes the second course.

    Another day, another bite. Oh well. Maybe this one's different.
  3. These IPOs are strikingly simmilar to the warrant that the LTCM partners sought. Sell their units in the IPO (at a significant multiple of earnings), but reinvest 100% of after-tax value back into the fund.

    The banks didn't like the idea so the figured out a way to do pawn it off on the shills! I like it. LOL, I love this business!

  4. you gotta love this business...every day a good laugh....:D :p :)