Och-Ziff has started buying troubled home loans

Discussion in 'Wall St. News' started by ASusilovic, Mar 4, 2008.

  1. Hedge fund firm will likely get more aggressive in mortgage markets this year

    Och-Ziff Capital Management Group LLC has tentatively begun buying troubled home loans, and the hedge fund firm will likely expand more aggressively in residential mortgage markets this year, Chief Executive Dan Och said on Tuesday.

    Och-Ziff , which became one of the first hedge funds to go public in the U.S. last year, reported better-than-expected fourth quarter results on Tuesday and held its first conference call with analysts

    During the call, Och said the firm's largest hedge fund -- the $20 billion OZ Master Fund -- had increased the money it allocates to credit strategies to roughly 10% of assets, up from zero before the mortgage-fueled credit crisis struck in July.
    Most of that money has been invested in senior, secured loans, but the fund has also begun buying mortgages, he said.
    "We've only invested a small amount of capital," Och told analysts. "We've been in discussions with several institutional investors for months about this opportunity and how it will develop."
    "We're likely to get more aggressive over the next six to 12 months," he added. "We see more opportunity in that area going forward."
    Och-Ziff bought a controlling interest in a subprime mortgage-servicing company called Residential Credit Solutions roughly two years ago to give it better insight into the market if things should begin to go wrong, Och explained.
    The firm "thought that, should an unraveling develop in the subprime mortgage market, having our own mortgage servicing capability would create a substantial advantage," he explained. "One of the tenets that this firm was founded on is the concept that luck is when preparation meets opportunity."

  2. The fund will be renamed OUCH-ziff soon enough.
  3. Div_Arb