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QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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For the Quarterly Period Ended June 30, 2017
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Delaware
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26-0354783
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(State of Incorporation)
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(I.R.S. Employer Identification Number)
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Page
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PART I — FINANCIAL INFORMATION
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Item 1.
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Item 2.
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Item 3.
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Item 4.
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PART II — OTHER INFORMATION
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Item 1.
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Item 1A.
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Item 2.
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Item 3.
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Item 4.
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Item 5.
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Item 6.
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2007 Offerings
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Refers collectively to our IPO and the concurrent private offering of approximately 38.1 million Class A Shares to DIC Sahir Limited, a wholly owned indirect subsidiary of Dubai Holdings LLC
|
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active executive managing directors
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Executive managing directors who remain active in our business
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Annual Report
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Our annual report on Form 10-K for the year ended December 31, 2016, dated March 1, 2017 and filed with the SEC
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Class A Shares
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Our Class A Shares, representing Class A limited liability company interests of Och-Ziff Capital Management Group LLC, which are publicly traded and listed on the NYSE
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Class B Shares
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Class B Shares of Och-Ziff Capital Management Group LLC, which are not publicly traded, are currently held solely by our executive managing directors and have no economic rights but entitle the holders thereof to one vote per share together with the holders of our Class A Shares
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CLOs
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Collateralized loan obligations
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Exchange Act
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Securities Exchange Act of 1934, as amended
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executive managing directors
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The current limited partners of the Oz Operating Group entities other than our intermediate holding companies, including our founder, Daniel S. Och, and, except where the context requires otherwise, include certain limited partners who are no longer active in the business of the Company
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funds
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The multi-strategy, opportunistic credit, real estate and equity funds, Institutional Credit Strategies products and other alternative investment vehicles for which we provide asset management services
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GAAP
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U.S. generally accepted accounting principles
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Group A Units
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Refers collectively to one Class A operating group unit in each of the Oz Operating Partnerships. Group A Units are equity interests held by our executive managing directors
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Group B Units
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Refers collectively to one Class B operating group unit in each of the Oz Operating Partnerships. Group B Units are equity interests held by our intermediate holding companies
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Group D Units
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Refers collectively to one Class D operating group unit in each of the Oz Operating Partnerships. Group D Units are non-equity, limited partner profits interests held by our executive managing directors
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Group P Units
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Refers collectively to one Class P operating group unit in each of the Oz Operating Partnerships. Group P Units are equity interests held by our executive managing directors
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Institutional Credit Strategies
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Our asset management platform that invests in performing credits, including leveraged loans, high-yield bonds, private credit/bespoke financing and investment grade credit via CLOs and other customized solutions
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intermediate holding companies
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Refers collectively to Oz Corp and Oz Holding, both of which are wholly owned subsidiaries of Och-Ziff Capital Management Group LLC
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IPO
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Our initial public offering of 36.0 million Class A Shares that occurred in November 2007
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NYSE
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New York Stock Exchange
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the Company, the firm, we, us, our
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Refers, unless the context requires otherwise, to Och-Ziff Capital Management Group LLC, a Delaware limited liability company, and its consolidated subsidiaries, including the Oz Operating Group
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Oz Corp
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Och-Ziff Holding Corporation, a Delaware corporation
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Oz Holding
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Och-Ziff Holding LLC, a Delaware limited liability company
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Oz Operating Group
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Refers collectively to the Oz Operating Partnerships and their consolidated subsidiaries
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Oz Operating Partnerships
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Refers collectively to OZ Management LP, OZ Advisors LP and OZ Advisors II LP
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Partner Equity Units
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Refers collectively to the Group A Units and Group P Units.
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Preferred Units
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One Class A cumulative preferred unit in each of the Oz Operating Group entities collectively represents one “Preferred Unit.” Certain of our executive managing directors collectively own 100% of the Preferred Units
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Registrant
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Och-Ziff Capital Management Group LLC, a Delaware limited liability company
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SEC
|
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U.S. Securities and Exchange Commission
|
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Securities Act
|
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Securities Act of 1933, as amended
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Special Investments
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Investments that we, as investment manager, believe lack a readily ascertainable market value, are illiquid or should be held until the resolution of a special event or circumstance
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Ziffs
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Refers collectively to Ziff Investors Partnership, L.P. II and certain of its affiliates and control persons
|
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June 30, 2017
|
|
December 31, 2016
|
||||
|
|
|
|
||||
|
(dollars in thousands)
|
||||||
Assets
|
|
|
|
|
|||
Cash and cash equivalents
|
$
|
275,865
|
|
|
$
|
329,813
|
|
Investments (includes assets measured at fair value of $143,218 and $21,341 as of June 30, 2017 and December 31, 2016, respectively)
|
159,682
|
|
|
37,980
|
|
||
Income and fees receivable
|
81,120
|
|
|
176,638
|
|
||
Due from related parties
|
30,013
|
|
|
20,494
|
|
||
Deferred income tax assets
|
683,321
|
|
|
695,441
|
|
||
Other assets, net
|
125,877
|
|
|
169,984
|
|
||
Assets of consolidated funds:
|
|
|
|
|
|||
Investments of consolidated funds, at fair value
|
233,100
|
|
|
37,661
|
|
||
Other assets of consolidated funds
|
35,404
|
|
|
17,544
|
|
||
Total Assets
|
$
|
1,624,382
|
|
|
$
|
1,485,555
|
|
|
|
|
|
||||
Liabilities and Shareholders’ (Deficit) Equity
|
|
|
|
|
|||
Liabilities
|
|
|
|
|
|||
Compensation payable
|
$
|
47,343
|
|
|
$
|
206,106
|
|
Due to related parties
|
522,434
|
|
|
522,101
|
|
||
Debt obligations
|
429,202
|
|
|
577,128
|
|
||
Other liabilities (includes liabilities measured at fair value of $0 and $8,204 as of June 30, 2017 and December 31, 2016, respectively)
|
194,638
|
|
|
174,994
|
|
||
Liabilities of consolidated funds:
|
|
|
|
|
|||
Debt obligations of consolidated CLO, at fair value
|
110,938
|
|
|
—
|
|
||
Other liabilities of consolidated funds
|
110,205
|
|
|
15,197
|
|
||
Total Liabilities
|
1,414,760
|
|
|
1,495,526
|
|
||
|
|
|
|
||||
Commitments and Contingencies (Note 15)
|
|
|
|
|
|
||
|
|
|
|
||||
Redeemable Noncontrolling Interests (Note 3)
|
444,678
|
|
|
284,121
|
|
||
|
|
|
|
||||
Shareholders’ (Deficit) Equity
|
|
|
|
|
|
||
Class A Shares, no par value, 1,000,000,000 shares authorized, 185,214,692 and 184,843,255 shares issued and outstanding as of June 30, 2017 and December 31, 2016, respectively
|
—
|
|
|
—
|
|
||
Class B Shares, no par value, 750,000,000 shares authorized, 339,339,478 and 297,317,019 shares issued and outstanding as of June 30, 2017 and December 31, 2016, respectively
|
—
|
|
|
—
|
|
||
Paid-in capital
|
3,078,150
|
|
|
3,097,431
|
|
||
Accumulated deficit
|
(3,560,482
|
)
|
|
(3,563,452
|
)
|
||
Shareholders’ deficit attributable to Class A Shareholders
|
(482,332
|
)
|
|
(466,021
|
)
|
||
Shareholders’ equity attributable to noncontrolling interests
|
247,276
|
|
|
171,929
|
|
||
Total Shareholders’ (Deficit) Equity
|
(235,056
|
)
|
|
(294,092
|
)
|
||
Total Liabilities, Redeemable Noncontrolling Interests and Shareholders’ (Deficit) Equity
|
$
|
1,624,382
|
|
|
$
|
1,485,555
|
|
|
|||||||||||||||
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||||||
|
|
|
|
|
|
|
|
||||||||
|
(dollars in thousands)
|
||||||||||||||
Revenues
|
|
|
|
|
|
|
|
||||||||
Management fees
|
$
|
80,082
|
|
|
$
|
143,399
|
|
|
$
|
166,337
|
|
|
$
|
300,309
|
|
Incentive income
|
66,115
|
|
|
8,136
|
|
|
117,741
|
|
|
38,723
|
|
||||
Other revenues
|
1,781
|
|
|
585
|
|
|
2,557
|
|
|
1,164
|
|
||||
Income of consolidated funds
|
968
|
|
|
438
|
|
|
1,463
|
|
|
804
|
|
||||
Total Revenues
|
148,946
|
|
|
152,558
|
|
|
288,098
|
|
|
341,000
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Expenses
|
|
|
|
|
|
|
|
||||||||
Compensation and benefits
|
69,679
|
|
|
57,743
|
|
|
139,622
|
|
|
112,004
|
|
||||
Interest expense
|
5,152
|
|
|
5,937
|
|
|
11,432
|
|
|
11,323
|
|
||||
General, administrative and other
|
35,165
|
|
|
272,527
|
|
|
81,093
|
|
|
540,196
|
|
||||
Expenses of consolidated funds
|
460
|
|
|
33
|
|
|
544
|
|
|
299
|
|
||||
Total Expenses
|
110,456
|
|
|
336,240
|
|
|
232,691
|
|
|
663,822
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Other Income
|
|
|
|
|
|
|
|
||||||||
Changes in tax receivable agreement liability
|
—
|
|
|
26
|
|
|
—
|
|
|
171
|
|
||||
Net gains on investments in funds and joint ventures
|
65
|
|
|
250
|
|
|
786
|
|
|
499
|
|
||||
Net gains of consolidated funds
|
385
|
|
|
816
|
|
|
620
|
|
|
1,361
|
|
||||
Total Other Income
|
450
|
|
|
1,092
|
|
|
1,406
|
|
|
2,031
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Income (Loss) Before Income Taxes
|
38,940
|
|
|
(182,590
|
)
|
|
56,813
|
|
|
(320,791
|
)
|
||||
Income taxes
|
3,244
|
|
|
10,911
|
|
|
15,300
|
|
|
29,450
|
|
||||
Consolidated and Comprehensive Net Income (Loss)
|
35,696
|
|
|
(193,501
|
)
|
|
41,513
|
|
|
(350,241
|
)
|
||||
Less: (Income) loss attributable to noncontrolling interests
|
(22,142
|
)
|
|
115,592
|
|
|
(31,920
|
)
|
|
203,437
|
|
||||
Less: Income attributable to redeemable noncontrolling interests
|
(456
|
)
|
|
(662
|
)
|
|
(806
|
)
|
|
(1,123
|
)
|
||||
Net Income (Loss) Attributable to Och-Ziff Capital Management Group LLC
|
13,098
|
|
|
(78,571
|
)
|
|
8,787
|
|
|
(147,927
|
)
|
||||
Less: Change in redemption value of Preferred Units
|
—
|
|
|
—
|
|
|
(2,853
|
)
|
|
—
|
|
||||
Net Income (Loss) Attributable to Class A Shareholders
|
$
|
13,098
|
|
|
$
|
(78,571
|
)
|
|
$
|
5,934
|
|
|
$
|
(147,927
|
)
|
|
|
|
|
|
|
|
|
||||||||
Earnings (Loss) per Class A Share
|
|
|
|
|
|
|
|
||||||||
Income (Loss) per Class A Share - basic
|
$
|
0.07
|
|
|
$
|
(0.43
|
)
|
|
$
|
0.03
|
|
|
$
|
(0.81
|
)
|
Income (Loss) per Class A Share - diluted
|
$
|
0.07
|
|
|
$
|
(0.44
|
)
|
|
$
|
0.03
|
|
|
$
|
(0.81
|
)
|
Weighted-average Class A Shares outstanding - basic
|
186,142,576
|
|
|
182,454,677
|
|
|
186,183,971
|
|
|
182,501,762
|
|
||||
Weighted-average Class A Shares outstanding - diluted
|
186,142,576
|
|
|
479,771,696
|
|
|
186,183,971
|
|
|
182,501,762
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Dividends Paid per Class A Share
|
$
|
0.02
|
|
|
$
|
—
|
|
|
$
|
0.03
|
|
|
$
|
—
|
|
|
Och-Ziff Capital Management Group LLC
|
|
|
|
|
||||||||||||||||||||
|
Number of
Class A Shares |
|
Number of
Class B Shares |
|
Paid-in
Capital |
|
Accumulated
Deficit |
|
Shareholders' Deficit
Attributable to Class A Shareholders |
|
Shareholders' Equity
Attributable to Noncontrolling Interests |
|
Total
Shareholders’ Equity (Deficit) |
||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
|
|
|
|
|
(dollars in thousands)
|
||||||||||||||||||||
As of December 31, 2016
|
184,843,255
|
|
|
297,317,019
|
|
|
$
|
3,097,431
|
|
|
$
|
(3,563,452
|
)
|
|
$
|
(466,021
|
)
|
|
$
|
171,929
|
|
|
$
|
(294,092
|
)
|
Capital contributions
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
592
|
|
|
592
|
|
|||||
Capital distributions
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(10,197
|
)
|
|
(10,197
|
)
|
|||||
Cash dividends declared on Class A Shares
|
—
|
|
|
—
|
|
|
—
|
|
|
(5,552
|
)
|
|
(5,552
|
)
|
|
—
|
|
|
(5,552
|
)
|
|||||
Equity-based compensation, net of taxes
|
371,437
|
|
|
172,459
|
|
|
16,745
|
|
|
—
|
|
|
16,745
|
|
|
24,187
|
|
|
40,932
|
|
|||||
Dividend equivalents on Class A restricted share units
|
—
|
|
|
—
|
|
|
265
|
|
|
(265
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Relinquishment of Group A Units (Note 3)
|
—
|
|
|
(30,000,000
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Class B Shares granted to holders of Group P Units (Note 3)
|
—
|
|
|
71,850,000
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Impact of changes in Oz Operating Group ownership (Note 3)
|
—
|
|
|
—
|
|
|
(12,219
|
)
|
|
—
|
|
|
(12,219
|
)
|
|
12,219
|
|
|
—
|
|
|||||
Dilution of proceeds from tax receivable agreement waiver (Note 3)
|
—
|
|
|
—
|
|
|
(21,219
|
)
|
|
—
|
|
|
(21,219
|
)
|
|
21,219
|
|
|
—
|
|
|||||
Change in redemption value of Preferred Units
|
—
|
|
|
—
|
|
|
(2,853
|
)
|
|
—
|
|
|
(2,853
|
)
|
|
(4,593
|
)
|
|
(7,446
|
)
|
|||||
Comprehensive net income, excluding amounts attributable to redeemable noncontrolling interests
|
—
|
|
|
—
|
|
|
—
|
|
|
8,787
|
|
|
8,787
|
|
|
31,920
|
|
|
40,707
|
|
|||||
As of June 30, 2017
|
185,214,692
|
|
|
339,339,478
|
|
|
$
|
3,078,150
|
|
|
$
|
(3,560,482
|
)
|
|
$
|
(482,332
|
)
|
|
$
|
247,276
|
|
|
$
|
(235,056
|
)
|
|
Six Months Ended June 30,
|
||||||
|
2017
|
|
2016
|
||||
|
|
|
|
||||
|
(dollars in thousands)
|
||||||
Cash Flows from Operating Activities
|
|
|
|
||||
Consolidated net income (loss)
|
$
|
41,513
|
|
|
$
|
(350,241
|
)
|
Adjustments to reconcile consolidated net income to net cash provided by operating activities:
|
|
|
|
||||
Amortization of equity-based compensation
|
41,438
|
|
|
38,013
|
|
||
Depreciation, amortization and net gains and losses on fixed assets
|
5,456
|
|
|
6,982
|
|
||
Deferred income taxes
|
12,206
|
|
|
23,440
|
|
||
Net gains on investments in funds and joint ventures
|
(786
|
)
|
|
(499
|
)
|
||
Operating cash flows due to changes in:
|
|
|
|
||||
Income and fees receivable
|
95,518
|
|
|
78,143
|
|
||
Due from related parties
|
(9,519
|
)
|
|
(11,758
|
)
|
||
Other assets, net
|
(14,447
|
)
|
|
6,196
|
|
||
Due to related parties
|
333
|
|
|
(370
|
)
|
||
Compensation payable
|
(158,639
|
)
|
|
(159,362
|
)
|
||
Other liabilities
|
19,515
|
|
|
393,258
|
|
||
Consolidated funds related items:
|
|
|
|
||||
Net gains of consolidated funds
|
(620
|
)
|
|
(1,361
|
)
|
||
Purchases of investments
|
(189,826
|
)
|
|
(142,310
|
)
|
||
Proceeds from sale of investments
|
96,664
|
|
|
138,775
|
|
||
Other assets of consolidated funds
|
(14,597
|
)
|
|
2,764
|
|
||
Other liabilities of consolidated funds
|
6,420
|
|
|
38
|
|
||
Net Cash (Used in) Provided by Operating Activities
|
(69,371
|
)
|
|
21,708
|
|
||
|
|
|
|
||||
Cash Flows from Investing Activities
|
|
|
|
||||
Purchases of fixed assets
|
(3,292
|
)
|
|
(6,244
|
)
|
||
Proceeds from sale of fixed assets (Note 7)
|
57,599
|
|
|
—
|
|
||
Purchases of United States government obligations
|
(99,468
|
)
|
|
(29,915
|
)
|
||
Maturities of United States government obligations
|
—
|
|
|
18,500
|
|
||
Investments in funds
|
(23,609
|
)
|
|
(7,556
|
)
|
||
Return of investments in funds
|
2,647
|
|
|
952
|
|
||
Other, net
|
—
|
|
|
(17
|
)
|
||
Net Cash Used in Investing Activities
|
(66,123
|
)
|
|
(24,280
|
)
|
||
|
|
|
|
|
Six Months Ended June 30,
|
||||||
|
2017
|
|
2016
|
||||
|
|
|
|
||||
|
(dollars in thousands)
|
||||||
Cash Flows from Financing Activities
|
|
|
|
||||
Issuance and sale of Preferred Units, net of issuance costs
|
150,054
|
|
|
—
|
|
||
Contributions from noncontrolling and redeemable noncontrolling interests
|
2,842
|
|
|
441
|
|
||
Distributions to noncontrolling and redeemable noncontrolling interests
|
(10,197
|
)
|
|
(20
|
)
|
||
Dividends on Class A Shares
|
(5,552
|
)
|
|
—
|
|
||
Proceeds from debt obligations
|
17,466
|
|
|
120,000
|
|
||
Proceeds from debt obligations of consolidated CLO
|
94,882
|
|
|
—
|
|
||
Repayment of debt obligations
|
(167,319
|
)
|
|
(1,818
|
)
|
||
Withholding taxes paid on vested RSUs
|
(630
|
)
|
|
(2,053
|
)
|
||
Other, net
|
—
|
|
|
113
|
|
||
Net Cash Provided by Financing Activities
|
81,546
|
|
|
116,663
|
|
||
Net Change in Cash and Cash Equivalents
|
(53,948
|
)
|
|
114,091
|
|
||
Cash and Cash Equivalents, Beginning of Period
|
329,813
|
|
|
254,070
|
|
||
Cash and Cash Equivalents, End of Period
|
$
|
275,865
|
|
|
$
|
368,161
|
|
|
|
|
|
||||
|
|
|
|
||||
Supplemental Disclosure of Cash Flow Information
|
|
|
|
|
|||
Cash paid during the period:
|
|
|
|
|
|||
Interest
|
$
|
10,958
|
|
|
$
|
9,959
|
|
Income taxes
|
$
|
2,180
|
|
|
$
|
7,618
|
|
Non-cash transactions:
|
|
|
|
||||
Assets related to the initial consolidation of CLO
|
$
|
100,156
|
|
|
$
|
—
|
|
Liabilities related to the initial consolidation of CLO
|
$
|
99,878
|
|
|
$
|
—
|
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||||||
|
|
|
|
|
|
|
|
||||||||
|
(dollars in thousands)
|
||||||||||||||
Group A Units
|
$
|
22,010
|
|
|
$
|
(115,632
|
)
|
|
$
|
31,645
|
|
|
$
|
(203,651
|
)
|
Consolidated funds
|
—
|
|
|
—
|
|
|
—
|
|
|
262
|
|
||||
Other
|
132
|
|
|
40
|
|
|
275
|
|
|
(48
|
)
|
||||
|
$
|
22,142
|
|
|
$
|
(115,592
|
)
|
|
$
|
31,920
|
|
|
$
|
(203,437
|
)
|
|
June 30, 2017
|
|
December 31, 2016
|
||||
|
|
|
|
||||
|
(dollars in thousands)
|
||||||
Group A Units
|
$
|
242,864
|
|
|
$
|
166,521
|
|
Other
|
4,412
|
|
|
5,408
|
|
||
|
$
|
247,276
|
|
|
$
|
171,929
|
|
|
Six Months Ended June 30, 2017
|
||||||||||
|
Consolidated Funds
|
|
Preferred Units
|
|
Total
|
||||||
|
|
|
|
|
|
||||||
|
(dollars in thousands)
|
||||||||||
Beginning balance
|
$
|
21,621
|
|
|
$
|
262,500
|
|
|
$
|
284,121
|
|
Change in redemption value of Preferred Units
|
—
|
|
|
7,446
|
|
|
7,446
|
|
|||
Preferred Units issuance, net of issuance costs
|
—
|
|
|
150,054
|
|
|
150,054
|
|
|||
Capital contributions
|
2,251
|
|
|
—
|
|
|
2,251
|
|
|||
Comprehensive income
|
806
|
|
|
—
|
|
|
806
|
|
|||
Ending Balance
|
$
|
24,678
|
|
|
$
|
420,000
|
|
|
$
|
444,678
|
|
|
June 30, 2017
|
|
December 31, 2016
|
||||
|
(dollars in thousands)
|
||||||
United States government obligations, at fair value
(1)
|
$
|
99,495
|
|
|
$
|
—
|
|
CLOs, at fair value
|
43,723
|
|
|
21,341
|
|
||
Other funds and joint ventures, equity method
|
16,464
|
|
|
16,639
|
|
||
Total Investments
|
$
|
159,682
|
|
|
$
|
37,980
|
|
•
|
Level I
– Fair value is determined using quoted prices that are available in active markets for identical assets or liabilities. The types of assets and liabilities that would generally be included in this category are certain listed equities, U.S. government obligations and certain listed derivatives.
|
•
|
Level II
– Fair value is determined using quotations received from dealers making a market for these assets or liabilities (“broker quotes”), valuations obtained from independent third-party pricing services, the use of models or other valuation methodologies based on pricing inputs that are either directly or indirectly market observable as of the measurement date. The types of assets and liabilities that would generally be included in this category are certain corporate bonds, certain credit default swap contracts, certain bank debt securities, certain commercial real estate debt, less liquid equity securities, forward contracts and certain over the-counter (“OTC”) derivatives.
|
•
|
Level III
– Fair value is determined using pricing inputs that are unobservable in the market and includes situations where there is little, if any, market activity for the asset or liability. The fair value of assets and liabilities in this category may require significant judgment or estimation in determining fair value of the assets or liabilities. The fair value of these assets and liabilities may be estimated using a combination of observed transaction prices, independent pricing services, relevant broker quotes, models or other valuation methodologies based on pricing inputs that are neither directly or indirectly market observable. The types of assets and liabilities that would generally be included in this category include real estate investments, equity and debt securities issued by private entities, limited partnerships, certain corporate bonds, certain credit default swap contracts, certain bank debt securities, certain commercial real estate debt, certain OTC derivatives, residential and commercial mortgage-backed securities, asset-backed securities, collateralized debt obligations, investments in affiliated credit funds as well as debt obligations of the consolidated CLO.
|
|
As of June 30, 2017
|
||||||||||||||
|
Level I
|
|
Level II
|
|
Level III
|
|
Total
|
||||||||
|
|
|
|
|
|
|
|
||||||||
|
(dollars in thousands)
|
||||||||||||||
Assets, at Fair Value
|
|
|
|
|
|
|
|
||||||||
Included within cash and cash equivalents:
|
|
|
|
|
|
|
|
||||||||
United States government obligations
|
$
|
119,756
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
119,756
|
|
|
|
|
|
|
|
|
|
||||||||
Included within investments:
|
|
|
|
|
|
|
|
||||||||
United States government obligations
|
$
|
99,495
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
99,495
|
|
CLOs
(1)
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
43,723
|
|
|
$
|
43,723
|
|
|
|
|
|
|
|
|
|
||||||||
Investments of consolidated funds:
|
|
|
|
|
|
|
|
||||||||
Bank debt
|
$
|
—
|
|
|
$
|
186,477
|
|
|
$
|
39,338
|
|
|
$
|
225,815
|
|
Corporate bonds
|
—
|
|
|
7,285
|
|
|
—
|
|
|
7,285
|
|
||||
|
$
|
—
|
|
|
$
|
193,762
|
|
|
$
|
39,338
|
|
|
$
|
233,100
|
|
|
|
|
|
|
|
|
|
||||||||
Liabilities, at Fair Value
|
|
|
|
|
|
|
|
||||||||
Liabilities of consolidated funds:
|
|
|
|
|
|
|
|
||||||||
Senior debt obligations of consolidated CLO
|
$
|
—
|
|
|
$
|
83,381
|
|
|
$
|
—
|
|
|
$
|
83,381
|
|
Preferred shares of consolidated CLO
|
—
|
|
|
27,557
|
|
|
—
|
|
|
27,557
|
|
||||
Debt Obligations of Consolidated CLO, at Fair Value
|
$
|
—
|
|
|
$
|
110,938
|
|
|
$
|
—
|
|
|
$
|
110,938
|
|
|
As of December 31, 2016
|
||||||||||||||
|
Level I
|
|
Level II
|
|
Level III
|
|
Total
|
||||||||
|
|
|
|
|
|
|
|
||||||||
|
(dollars in thousands)
|
||||||||||||||
Assets, at Fair Value
|
|
|
|
|
|
|
|
||||||||
Included within cash and cash equivalents:
|
|
|
|
|
|
|
|
||||||||
United States government obligations
|
$
|
139,974
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
139,974
|
|
|
|
|
|
|
|
|
|
||||||||
Included within investments:
|
|
|
|
|
|
|
|
||||||||
CLOs
(1)
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
21,341
|
|
|
$
|
21,341
|
|
|
|
|
|
|
|
|
|
||||||||
Investments of consolidated funds:
|
|
|
|
|
|
|
|
||||||||
Bank debt
|
$
|
—
|
|
|
$
|
19,534
|
|
|
$
|
18,127
|
|
|
$
|
37,661
|
|
|
|
|
|
|
|
|
|
||||||||
Liabilities, at Fair Value
|
|
|
|
|
|
|
|
||||||||
Included within other liabilities:
|
|
|
|
|
|
|
|
||||||||
Obligation to deliver loans subject to forward sale agreement included within other liabilities
|
$
|
—
|
|
|
$
|
8,204
|
|
|
$
|
—
|
|
|
$
|
8,204
|
|
|
March 31, 2016
|
|
Transfers
In |
|
Transfers
Out |
|
Investment
Purchases / Issuances |
|
Investment
Sales / Settlements |
|
Gains / Losses
|
|
June 30, 2016
|
||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
|
(dollars in thousands)
|
||||||||||||||||||||||||||
Assets, at Fair Value
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Investments of consolidated funds:
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Bank debt
|
$
|
3,981
|
|
|
$
|
489
|
|
|
$
|
—
|
|
|
$
|
27,612
|
|
|
$
|
(23,408
|
)
|
|
$
|
194
|
|
|
$
|
8,868
|
|
|
December 31, 2015
|
|
Transfers
In |
|
Transfers
Out |
|
Investment
Purchases / Issuances |
|
Investment
Sales / Settlements |
|
Gains / Losses
|
|
June 30, 2016
|
||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
|
(dollars in thousands)
|
||||||||||||||||||||||||||
Assets, at Fair Value
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Investments of consolidated funds:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Bank debt
|
$
|
1,998,423
|
|
|
$
|
460
|
|
|
$
|
—
|
|
|
$
|
47,227
|
|
|
$
|
(2,037,742
|
)
|
|
$
|
500
|
|
|
$
|
8,868
|
|
Real estate investments
|
719,957
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(719,957
|
)
|
|
—
|
|
|
—
|
|
|||||||
Residential mortgage-backed securities
|
323,571
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(323,571
|
)
|
|
—
|
|
|
—
|
|
|||||||
Collateralized debt obligations
|
83,759
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(83,759
|
)
|
|
—
|
|
|
—
|
|
|||||||
Energy and natural resources limited partnerships
|
70,604
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(70,604
|
)
|
|
—
|
|
|
—
|
|
|||||||
Commercial real estate debt
|
18,295
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(18,295
|
)
|
|
—
|
|
|
—
|
|
|||||||
Corporate bonds
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||||
Asset-backed securities
|
23,739
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(23,739
|
)
|
|
—
|
|
|
—
|
|
|||||||
Commercial mortgage-backed securities
|
13,803
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(13,803
|
)
|
|
—
|
|
|
—
|
|
|||||||
Other investments (including derivatives, net)
|
1,938
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(1,938
|
)
|
|
—
|
|
|
—
|
|
|||||||
|
$
|
3,254,089
|
|
|
$
|
460
|
|
|
$
|
—
|
|
|
$
|
47,227
|
|
|
$
|
(3,293,408
|
)
|
|
$
|
500
|
|
|
$
|
8,868
|
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||||||
|
|
|
|
|
|
|
|
||||||||
|
(dollars in thousands)
|
||||||||||||||
Assets, at Fair Value
|
|
|
|
|
|
|
|
||||||||
Included within investments:
|
|
|
|
|
|
|
|
||||||||
CLOs
|
$
|
1,475
|
|
|
$
|
—
|
|
|
$
|
2,182
|
|
|
$
|
—
|
|
|
|
|
|
|
|
|
|
||||||||
Investments of consolidated funds:
|
|
|
|
|
|
|
|
||||||||
Bank debt
|
$
|
272
|
|
|
$
|
69
|
|
|
$
|
385
|
|
|
$
|
100
|
|
|
June 30, 2017
|
|
December 31, 2016
|
||||
|
|
|
|
||||
|
(dollars in thousands)
|
||||||
Assets
|
|
|
|
|
|
||
Assets of consolidated funds:
|
|
|
|
|
|
||
Investments of consolidated funds, at fair value
|
$
|
233,100
|
|
|
$
|
37,661
|
|
Other assets of consolidated funds
|
35,404
|
|
|
17,544
|
|
||
Total Assets
|
$
|
268,504
|
|
|
$
|
55,205
|
|
|
|
|
|
||||
Liabilities
|
|
|
|
|
|
||
Liabilities of consolidated funds:
|
|
|
|
|
|
||
Debt obligations of consolidated CLO
|
110,938
|
|
|
—
|
|
||
Other liabilities of consolidated funds
|
110,205
|
|
|
15,197
|
|
||
Total Liabilities
|
$
|
221,143
|
|
|
$
|
15,197
|
|
|
June 30, 2017
|
|
December 31, 2016
|
||||
|
(dollars in thousands)
|
||||||
Net assets of unconsolidated VIEs in which the Company has a variable interest
|
$
|
4,741,268
|
|
|
$
|
4,069,617
|
|
|
|
|
|
||||
Maximum risk of loss as a result of the Company's involvement with VIEs:
|
|
|
|
||||
Unearned revenues
|
107,475
|
|
|
96,409
|
|
||
Income and fees receivable
|
6,914
|
|
|
13,074
|
|
||
Investments in funds
|
56,086
|
|
|
35,868
|
|
||
Maximum Exposure to Loss
|
$
|
170,475
|
|
|
$
|
145,351
|
|
|
June 30, 2017
|
|
December 31, 2016
|
||||
|
|
|
|
||||
|
(dollars in thousands)
|
||||||
Fixed Assets:
|
|
|
|
|
|
||
Corporate aircraft held for sale
|
$
|
—
|
|
|
$
|
56,251
|
|
Leasehold improvements
|
53,419
|
|
|
54,414
|
|
||
Computer hardware and software
|
41,879
|
|
|
40,093
|
|
||
Furniture, fixtures and equipment
|
8,565
|
|
|
8,919
|
|
||
Accumulated depreciation and amortization
|
(53,820
|
)
|
|
(49,890
|
)
|
||
Fixed assets, net
|
50,043
|
|
|
109,787
|
|
||
Loans held for sale
|
37,360
|
|
|
8,204
|
|
||
Goodwill
|
22,691
|
|
|
22,691
|
|
||
Prepaid expenses
|
12,278
|
|
|
12,753
|
|
||
Trades receivable for loans subject to forward sale agreement
|
—
|
|
|
10,391
|
|
||
Other
|
3,505
|
|
|
6,158
|
|
||
Total Other Assets, Net
|
$
|
125,877
|
|
|
$
|
169,984
|
|
|
June 30, 2017
|
|
December 31, 2016
|
||||
|
|
|
|
||||
|
(dollars in thousands)
|
||||||
Unearned incentive income
|
$
|
107,475
|
|
|
$
|
96,079
|
|
Loan trades payable
|
37,472
|
|
|
10,391
|
|
||
Accrued expenses
|
25,275
|
|
|
30,728
|
|
||
Deferred rent credit
|
9,422
|
|
|
15,046
|
|
||
Interest payable
|
2,244
|
|
|
2,654
|
|
||
Obligation to deliver loans subject to forward sale agreement, at fair value
|
—
|
|
|
8,204
|
|
||
Other
|
12,750
|
|
|
11,892
|
|
||
Total Other Liabilities
|
$
|
194,638
|
|
|
$
|
174,994
|
|
•
|
Incurring certain additional indebtedness or issuing certain equity interest.
|
•
|
Creating liens.
|
•
|
Paying dividends or making certain other payments when there is a default or event of default under the Revolving Credit Facility.
|
•
|
Merging, consolidating, selling or otherwise disposing of its assets.
|
•
|
Engaging in certain transactions with shareholders or affiliates.
|
•
|
Engaging in a substantially different line of business.
|
•
|
Amending its organizational documents in a manner materially adverse to the lenders.
|
|
As of June 30, 2017
|
||||||||
|
Borrowings Outstanding
|
|
Fair Value
|
|
Interest Rate
|
||||
|
|
|
|
|
|
||||
|
(dollars in thousands)
|
|
|
||||||
Senior debt obligations of consolidated CLO
|
$
|
83,381
|
|
|
$
|
83,381
|
|
|
1.10%
|
Preferred shares of consolidated CLO
|
24,997
|
|
|
27,557
|
|
|
n/a
|
||
|
$
|
108,378
|
|
|
$
|
110,938
|
|
|
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||||||
|
(dollars in thousands)
|
||||||||||||||
Professional services
|
$
|
8,608
|
|
|
$
|
19,820
|
|
|
$
|
21,756
|
|
|
$
|
43,195
|
|
Occupancy and equipment
|
7,574
|
|
|
9,163
|
|
|
18,477
|
|
|
18,491
|
|
||||
Information processing and communications
|
7,182
|
|
|
8,325
|
|
|
14,211
|
|
|
18,674
|
|
||||
Recurring placement and related service fees
|
5,217
|
|
|
10,023
|
|
|
10,661
|
|
|
22,554
|
|
||||
Business development
|
2,213
|
|
|
3,789
|
|
|
4,970
|
|
|
8,458
|
|
||||
Insurance
|
1,924
|
|
|
4,027
|
|
|
3,884
|
|
|
8,031
|
|
||||
Other expenses
|
2,447
|
|
|
3,095
|
|
|
7,134
|
|
|
6,508
|
|
||||
|
35,165
|
|
|
58,242
|
|
|
81,093
|
|
|
125,911
|
|
||||
Settlements expense
|
—
|
|
|
214,285
|
|
|
—
|
|
|
414,285
|
|
||||
Total General, Administrative and Other
|
$
|
35,165
|
|
|
$
|
272,527
|
|
|
$
|
81,093
|
|
|
$
|
540,196
|
|
Three Months Ended June 30, 2017
|
Net Income Attributable to Class A Shareholders
|
|
Weighted-Average
Class A Shares
Outstanding
|
|
Earnings Per Class A Share
|
|
Number of
Antidilutive Units
Excluded from
Diluted Calculation
|
||||||
|
|
|
|
|
|
|
|
||||||
|
(dollars in thousands, except per share amounts)
|
||||||||||||
Basic
|
$
|
13,098
|
|
|
186,142,576
|
|
|
$
|
0.07
|
|
|
|
|
Effect of dilutive securities:
|
|
|
|
|
|
|
|
||||||
Group A Units
|
—
|
|
|
—
|
|
|
|
|
267,489,478
|
|
|||
RSUs
|
—
|
|
|
—
|
|
|
|
|
22,901,428
|
|
|||
Diluted
|
$
|
13,098
|
|
|
186,142,576
|
|
|
$
|
0.07
|
|
|
|
Three Months Ended June 30, 2016
|
Net Loss Attributable to Class A Shareholders
|
|
Weighted-Average
Class A Shares
Outstanding
|
|
Lo
ss Per Class A Share
|
|
Number of
Antidilutive Units
Excluded from
Diluted Calculation
|
||||||
|
|
|
|
|
|
|
|
||||||
|
(dollars in thousands, except per share amounts)
|
||||||||||||
Basic
|
$
|
(78,571
|
)
|
|
182,454,677
|
|
|
$
|
(0.43
|
)
|
|
|
|
Effect of dilutive securities:
|
|
|
|
|
|
|
|
||||||
Group A Units
|
(130,904
|
)
|
|
297,317,019
|
|
|
|
|
—
|
|
|||
RSUs
|
—
|
|
|
—
|
|
|
|
|
14,676,979
|
|
|||
Diluted
|
$
|
(209,475
|
)
|
|
479,771,696
|
|
|
$
|
(0.44
|
)
|
|
|
Six Months Ended June 30, 2017
|
Net Income Attributable to Class A Shareholders
|
|
Weighted-Average
Class A Shares
Outstanding
|
|
Earnings Per Class A Share
|
|
Number of
Antidilutive Units
Excluded from
Diluted Calculation
|
||||||
|
|
|
|
|
|
|
|
||||||
|
(dollars in thousands, except per share amounts)
|
||||||||||||
Basic
|
$
|
5,934
|
|
|
186,183,971
|
|
|
$
|
0.03
|
|
|
|
|
Effect of dilutive securities:
|
|
|
|
|
|
|
|
||||||
Group A Units
|
—
|
|
|
—
|
|
|
|
|
277,193,212
|
|
|||
RSUs
|
—
|
|
|
—
|
|
|
|
|
21,324,651
|
|
|||
Diluted
|
$
|
5,934
|
|
|
186,183,971
|
|
|
$
|
0.03
|
|
|
|
Six Months Ended June 30, 2016
|
Net Loss Attributable to Class A Shareholders
|
|
Weighted-Average
Class A Shares
Outstanding
|
|
Loss Per Class A Share
|
|
Number of
Antidilutive Units
Excluded from
Diluted Calculation
|
||||||
|
|
|
|
|
|
|
|
||||||
|
(dollars in thousands, except per share amounts)
|
||||||||||||
Basic
|
$
|
(147,927
|
)
|
|
182,501,762
|
|
|
$
|
(0.81
|
)
|
|
|
|
Effect of dilutive securities:
|
|
|
|
|
|
|
|
||||||
Group A Units
|
—
|
|
|
—
|
|
|
|
|
297,317,172
|
|
|||
RSUs
|
—
|
|
|
—
|
|
|
|
|
13,901,270
|
|
|||
Diluted
|
$
|
(147,927
|
)
|
|
182,501,762
|
|
|
$
|
(0.81
|
)
|
|
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||||||
|
|
|
|
|
|
|
|
||||||||
|
(dollars in thousands)
|
||||||||||||||
Fees charged on investments held by related parties:
|
|
|
|
|
|
|
|
||||||||
Management fees
|
$
|
2,643
|
|
|
$
|
4,492
|
|
|
$
|
5,334
|
|
|
$
|
9,259
|
|
Incentive income
|
$
|
457
|
|
|
$
|
1,080
|
|
|
$
|
2,335
|
|
|
$
|
2,000
|
|
|
Unearned Incentive Income
|
||
|
(dollars in thousands)
|
||
Balance as of December 31, 2016
|
$
|
96,079
|
|
Incentive income collected but subject to clawback
|
13,893
|
|
|
Incentive income recognized
|
(2,497
|
)
|
|
Balance as of June 30, 2017
|
$
|
107,475
|
|
•
|
Income allocations to the Company’s executive managing directors on their direct interests in the Oz Operating Group. Management reviews operating performance at the Oz Operating Group level, where the Company’s operations are performed, prior to making any income allocations.
|
•
|
Equity-based compensation expenses, depreciation and amortization expenses, and gains and losses on fixed assets, as management does not consider these items to be reflective of operating performance. However, the fair value of RSUs that are settled in cash to employees or executive managing directors is included as an expense at the time of settlement.
|
•
|
Changes in the tax receivable agreement liability and gains and losses on investments in funds, as management does not consider these to be reflective of operating performance.
|
•
|
Amounts related to the consolidated 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.
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||||||
|
|
|
|
|
|
|
|
||||||||
|
(dollars in thousands)
|
||||||||||||||
Oz Funds Segment:
|
|
|
|
|
|
|
|
||||||||
Economic Income Revenues
|
$
|
134,885
|
|
|
$
|
135,672
|
|
|
$
|
261,609
|
|
|
$
|
302,441
|
|
Economic Income
|
$
|
64,677
|
|
|
$
|
(162,586
|
)
|
|
$
|
108,123
|
|
|
$
|
(282,525
|
)
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||||||
|
|
|
|
|
|
|
|
||||||||
|
(dollars in thousands)
|
||||||||||||||
Total consolidated revenues
|
$
|
148,946
|
|
|
$
|
152,558
|
|
|
$
|
288,098
|
|
|
$
|
341,000
|
|
Adjustment to management fees
(1)
|
(5,217
|
)
|
|
(10,023
|
)
|
|
(10,661
|
)
|
|
(22,554
|
)
|
||||
Adjustment to other revenues
(2)
|
(1,258
|
)
|
|
—
|
|
|
(1,258
|
)
|
|
—
|
|
||||
Other Operations revenues
|
(6,618
|
)
|
|
(6,425
|
)
|
|
(13,107
|
)
|
|
(15,201
|
)
|
||||
Income of consolidated funds
|
(968
|
)
|
|
(438
|
)
|
|
(1,463
|
)
|
|
(804
|
)
|
||||
Economic Income Revenues - Oz Funds Segment
|
$
|
134,885
|
|
|
$
|
135,672
|
|
|
$
|
261,609
|
|
|
$
|
302,441
|
|
(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 funds is also removed.
|
(2)
|
Adjustment to exclude realized gains on sale of fixed assets.
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||||||
|
|
|
|
|
|
|
|
||||||||
|
(dollars in thousands)
|
||||||||||||||
Net Income (Loss) Attributable to Class A Shareholders—GAAP
|
$
|
13,098
|
|
|
$
|
(78,571
|
)
|
|
$
|
5,934
|
|
|
$
|
(147,927
|
)
|
Change in redemption value of Preferred Units
|
—
|
|
|
—
|
|
|
2,853
|
|
|
—
|
|
||||
Net Income (Loss) Attributable to Och-Ziff Capital Management Group LLC—GAAP
|
$
|
13,098
|
|
|
$
|
(78,571
|
)
|
|
$
|
8,787
|
|
|
$
|
(147,927
|
)
|
Net income (loss) attributable to Group A Units
|
22,010
|
|
|
(115,632
|
)
|
|
31,645
|
|
|
(203,651
|
)
|
||||
Equity-based compensation, net of RSUs settled in cash
|
22,960
|
|
|
19,471
|
|
|
41,438
|
|
|
38,013
|
|
||||
Income taxes
|
3,244
|
|
|
10,911
|
|
|
15,300
|
|
|
29,450
|
|
||||
Allocations to Group D Units
|
—
|
|
|
1,025
|
|
|
3,360
|
|
|
1,900
|
|
||||
Adjustment for expenses related to compensation and profit-sharing arrangements based on fund investment performance
|
3,793
|
|
|
1,425
|
|
|
5,772
|
|
|
2,689
|
|
||||
Changes in tax receivable agreement liability
|
—
|
|
|
(26
|
)
|
|
—
|
|
|
(171
|
)
|
||||
Depreciation, amortization and net gains and losses on fixed assets
|
1,244
|
|
|
3,580
|
|
|
5,456
|
|
|
6,982
|
|
||||
Other adjustments
|
(598
|
)
|
|
(942
|
)
|
|
(1,609
|
)
|
|
(1,373
|
)
|
||||
Other Operations
|
(1,074
|
)
|
|
(3,827
|
)
|
|
(2,026
|
)
|
|
(8,437
|
)
|
||||
Economic Income - Oz Funds Segment
|
$
|
64,677
|
|
|
$
|
(162,586
|
)
|
|
$
|
108,123
|
|
|
$
|
(282,525
|
)
|
|
Three Months Ended June 30, 2017
|
||||||||||||||||||
|
March 31, 2017
|
|
Inflows / (Outflows)
|
|
Distributions / Other Reductions
|
|
Appreciation / (Depreciation)
|
|
June 30, 2017
|
||||||||||
|
|
|
|
|
|
|
|
|
|
||||||||||
|
(dollars in thousands)
|
||||||||||||||||||
Multi-strategy funds
|
$
|
17,702,471
|
|
|
$
|
(2,205,158
|
)
|
|
$
|
—
|
|
|
$
|
593,729
|
|
|
$
|
16,091,042
|
|
Credit
|
|
|
|
|
|
|
|
|
|
||||||||||
Opportunistic credit funds
|
5,284,848
|
|
|
(27,660
|
)
|
|
—
|
|
|
84,334
|
|
|
5,341,522
|
|
|||||
Institutional Credit Strategies
|
8,014,361
|
|
|
510,198
|
|
|
—
|
|
|
(9,748
|
)
|
|
8,514,811
|
|
|||||
Real estate funds
|
2,231,786
|
|
|
417,184
|
|
|
(31,166
|
)
|
|
28
|
|
|
2,617,832
|
|
|||||
Other
|
684,368
|
|
|
(70,960
|
)
|
|
—
|
|
|
19,044
|
|
|
632,452
|
|
|||||
Total
|
$
|
33,917,834
|
|
|
$
|
(1,376,396
|
)
|
|
$
|
(31,166
|
)
|
|
$
|
687,387
|
|
|
$
|
33,197,659
|
|
|
Three Months Ended June 30, 2016
|
||||||||||||||||||
|
March 31, 2016
|
|
Inflows / (Outflows)
|
|
Distributions / Other Reductions
|
|
Appreciation / (Depreciation)
|
|
June 30, 2016
|
||||||||||
|
|
|
|
|
|
|
|
|
|
||||||||||
|
(dollars in thousands)
|
||||||||||||||||||
Multi-strategy funds
|
$
|
27,511,130
|
|
|
$
|
(1,706,955
|
)
|
|
$
|
—
|
|
|
$
|
290,219
|
|
|
$
|
26,094,394
|
|
Credit
|
|
|
|
|
|
|
|
|
|
||||||||||
Opportunistic credit funds
|
5,178,528
|
|
|
16,964
|
|
|
(147,400
|
)
|
|
144,664
|
|
|
5,192,756
|
|
|||||
Institutional Credit Strategies
|
7,242,804
|
|
|
8,797
|
|
|
—
|
|
|
(6,093
|
)
|
|
7,245,508
|
|
|||||
Real estate funds
|
2,067,870
|
|
|
155,956
|
|
|
(7,072
|
)
|
|
(2,933
|
)
|
|
2,213,821
|
|
|||||
Other
|
1,211,726
|
|
|
21,924
|
|
|
—
|
|
|
309
|
|
|
1,233,959
|
|
|||||
Total
|
$
|
43,212,058
|
|
|
$
|
(1,503,314
|
)
|
|
$
|
(154,472
|
)
|
|
$
|
426,166
|
|
|
$
|
41,980,438
|
|
|
Six Months Ended June 30, 2017
|
||||||||||||||||||
|
December 31, 2016
|
|
Inflows / (Outflows)
|
|
Distributions / Other Reductions
|
|
Appreciation / (Depreciation)
|
|
June 30, 2017
|
||||||||||
|
|
|
|
|
|
|
|
|
|
||||||||||
|
(dollars in thousands)
|
||||||||||||||||||
Multi-strategy funds
|
$
|
21,084,548
|
|
|
$
|
(6,364,276
|
)
|
|
$
|
—
|
|
|
$
|
1,370,770
|
|
|
$
|
16,091,042
|
|
Credit
|
|
|
|
|
|
|
|
|
|
||||||||||
Opportunistic credit funds
|
5,376,080
|
|
|
(239,581
|
)
|
|
(19,769
|
)
|
|
224,792
|
|
|
5,341,522
|
|
|||||
Institutional Credit Strategies
|
8,019,510
|
|
|
513,651
|
|
|
—
|
|
|
(18,350
|
)
|
|
8,514,811
|
|
|||||
Real estate funds
|
2,213,364
|
|
|
451,397
|
|
|
(47,599
|
)
|
|
670
|
|
|
2,617,832
|
|
|||||
Other
|
1,186,801
|
|
|
(566,008
|
)
|
|
(30,016
|
)
|
|
41,675
|
|
|
632,452
|
|
|||||
Total
|
$
|
37,880,303
|
|
|
$
|
(6,204,817
|
)
|
|
$
|
(97,384
|
)
|
|
$
|
1,619,557
|
|
|
$
|
33,197,659
|
|
|
Six Months Ended June 30, 2016
|
||||||||||||||||||
|
December 31, 2015
|
|
Inflows / (Outflows)
|
|
Distributions / Other Reductions
|
|
Appreciation / (Depreciation)
|
|
June 30, 2016
|
||||||||||
|
|
|
|
|
|
|
|
|
|
||||||||||
|
(dollars in thousands)
|
||||||||||||||||||
Multi-strategy funds
|
$
|
29,510,248
|
|
|
$
|
(2,761,207
|
)
|
|
$
|
—
|
|
|
$
|
(654,647
|
)
|
|
$
|
26,094,394
|
|
Credit
|
|
|
|
|
|
|
|
|
|
||||||||||
Opportunistic credit funds
|
5,383,629
|
|
|
(43,352
|
)
|
|
(288,400
|
)
|
|
140,879
|
|
|
5,192,756
|
|
|||||
Institutional Credit Strategies
|
7,241,680
|
|
|
14,176
|
|
|
—
|
|
|
(10,348
|
)
|
|
7,245,508
|
|
|||||
Real estate funds
|
2,048,559
|
|
|
230,995
|
|
|
(61,365
|
)
|
|
(4,368
|
)
|
|
2,213,821
|
|
|||||
Other
|
1,310,745
|
|
|
(21,448
|
)
|
|
—
|
|
|
(55,338
|
)
|
|
1,233,959
|
|
|||||
Total
|
$
|
45,494,861
|
|
|
$
|
(2,580,836
|
)
|
|
$
|
(349,765
|
)
|
|
$
|
(583,822
|
)
|
|
$
|
41,980,438
|
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||||||
|
|
|
|
|
|
|
|
||||||||
|
(dollars in thousands)
|
||||||||||||||
Weighted-average assets under management
|
$
|
31,929,871
|
|
|
$
|
41,772,672
|
|
|
$
|
32,543,110
|
|
|
$
|
43,079,692
|
|
Average management fee rates
|
0.94
|
%
|
|
1.28
|
%
|
|
0.96
|
%
|
|
1.30
|
%
|
|
Assets Under Management as of June 30,
|
|
Returns for the Six Months Ended June 30,
|
|
Annualized Returns Since Inception Through June 30, 2017
|
|
||||||||||||||||||||
|
|
|
|
|
2017
|
|
2016
|
|
|
|||||||||||||||||
|
2017
|
|
2016
|
|
Gross
|
|
Net
|
|
Gross
|
|
Net
|
|
Gross
|
|
Net
|
|
||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Fund
|
(dollars in thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
OZ Master Fund
(1)
|
$
|
13,126,322
|
|
|
$
|
21,448,827
|
|
|
10.2
|
%
|
|
7.5
|
%
|
|
-1.2
|
%
|
|
-2.1
|
%
|
|
17.0
|
%
|
(1)
|
11.9
|
%
|
(1)
|
OZ Asia Master Fund
|
792,224
|
|
|
1,102,792
|
|
|
18.4
|
%
|
|
14.8
|
%
|
|
-2.9
|
%
|
|
-3.8
|
%
|
|
10.1
|
%
|
|
6.0
|
%
|
|
||
OZ Europe Master Fund
|
328,692
|
|
|
845,900
|
|
|
6.2
|
%
|
|
4.2
|
%
|
|
-0.9
|
%
|
|
-1.8
|
%
|
|
11.7
|
%
|
|
7.7
|
%
|
|
||
OZ Enhanced Master Fund
|
661,351
|
|
|
1,003,949
|
|
|
17.0
|
%
|
|
12.7
|
%
|
|
-3.3
|
%
|
|
-4.2
|
%
|
|
14.6
|
%
|
|
9.9
|
%
|
|
||
Other funds
|
1,182,453
|
|
|
1,692,926
|
|
|
n/m
|
|
|
n/m
|
|
|
n/m
|
|
|
n/m
|
|
|
n/m
|
|
|
n/m
|
|
|
||
|
$
|
16,091,042
|
|
|
$
|
26,094,394
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
The annualized returns since inception are those of the Och-Ziff Multi-Strategy Composite, which represents the composite performance of all accounts that were managed in accordance with our broad multi-strategy mandate that were not subject to portfolio investment restrictions or other factors that limited our investment discretion since inception on April 1, 1994. Performance is calculated using the total return of all such accounts net of all investment fees and expenses of such accounts, except incentive income on unrealized gains attributable to Special Investments that could reduce returns in these investments at the time of realization, and the returns include the reinvestment of all dividends and other income. The performance calculation for the OZ Master Fund excludes realized and unrealized gains and losses attributable to currency hedging specific to certain investors investing in OZ Master Fund in currencies other than the U.S. Dollar. For the period from April 1, 1994 through December 31, 1997, the returns are gross of certain overhead expenses that were reimbursed by the accounts. Such reimbursement arrangements were terminated at the inception of the OZ Master Fund on January 1, 1998. The size of the accounts comprising the composite during the time period shown vary materially. Such differences impacted our investment decisions and the diversity of the investment strategies followed. Furthermore, the composition of the investment strategies we follow is subject to our discretion, has varied materially since inception and is expected to vary materially in the future. As of
June 30, 2017
, the gross and net annualized returns since the OZ Master Fund’s inception on January 1, 1998 were
13.2%
and
8.9%
, respectively.
|
|
Assets Under Management as of June 30,
|
||||||
|
2017
|
|
2016
|
||||
|
|
|
|
||||
|
(dollars in thousands)
|
||||||
Opportunistic credit funds
|
$
|
5,341,522
|
|
|
$
|
5,192,756
|
|
Institutional Credit Strategies
|
8,514,811
|
|
|
7,245,508
|
|
||
|
$
|
13,856,333
|
|
|
$
|
12,438,264
|
|
|
Assets Under Management as of June 30,
|
|
Returns for the Six Months Ended June 30,
|
|
Annualized Returns Since Inception Through June 30, 2017
|
||||||||||||||||||||
|
2017
|
|
2016
|
|
2017
|
|
2016
|
|
|||||||||||||||||
|
|
|
|
|
Gross
|
|
Net
|
|
Gross
|
|
Net
|
|
Gross
|
|
Net
|
||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Fund
|
(dollars in thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
OZ Credit Opportunities Master Fund
|
$
|
1,704,647
|
|
|
$
|
1,621,130
|
|
|
8.3
|
%
|
|
5.7
|
%
|
|
5.1
|
%
|
|
4.4
|
%
|
|
17.5
|
%
|
|
13.0
|
%
|
Customized Credit Focused Platform
|
2,862,409
|
|
|
2,519,090
|
|
|
5.7
|
%
|
|
4.2
|
%
|
|
5.6
|
%
|
|
4.2
|
%
|
|
19.6
|
%
|
|
14.8
|
%
|
||
Closed-end opportunistic credit funds
|
311,341
|
|
|
625,634
|
|
|
See below for return information on our closed-end opportunistic credit funds.
|
||||||||||||||||||
Other funds
|
463,125
|
|
|
426,902
|
|
|
n/m
|
|
|
n/m
|
|
|
n/m
|
|
|
n/m
|
|
|
n/m
|
|
|
n/m
|
|
||
|
$
|
5,341,522
|
|
|
$
|
5,192,756
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
Represents funded capital commitments net of recallable distributions to investors.
|
(2)
|
Gross IRR for our closed-end opportunistic credit funds represents the estimated, unaudited, annualized return based on the timing of cash inflows and outflows for the fund as of
June 30, 2017
, including the fair value of unrealized investments as of such date, together with any appreciation or depreciation from related hedging activity. Gross IRR does not include the effects of management fees or incentive income, which would reduce the return, and includes the reinvestment of all fund income.
|
(3)
|
Net IRR is calculated as described in footnote (2), but is reduced by all management fees, as well as paid incentive and accrued incentive income that will be payable upon the distribution of each fund’s capital in accordance with the terms of the relevant fund. Accrued incentive income may be higher or lower at such time. The net IRR represents a composite rate of return for a fund and does not reflect the net IRR specific to any individual investor.
|
(4)
|
Gross MOIC for our closed-end opportunistic credit funds is calculated by dividing the sum of the net asset value of the fund, accrued incentive income, life-to-date incentive income and management fees paid and any non-recallable distributions made from the fund by the invested capital.
|
(5)
|
These funds have concluded their investment periods, and therefore we expect assets under management for these funds to decrease as investments are sold and the related proceeds are distributed to the investors in these funds.
|
|
|
|
|
|
Assets Under Management as of June 30,
|
||||||||
|
Initial Closing Date
|
|
Initial Deal Size
|
|
2017
|
|
2016
|
||||||
|
|
|
|
|
|
|
|
||||||
|
|
|
(dollars in thousands)
|
||||||||||
CLOs
|
|
|
|
|
|
|
|
||||||
OZLM I
|
July 19, 2012
|
|
$
|
510,700
|
|
|
$
|
496,498
|
|
|
$
|
497,636
|
|
OZLM II
|
November 1, 2012
|
|
560,100
|
|
|
509,060
|
|
|
513,276
|
|
|||
OZLM III
|
February 20, 2013
|
|
653,250
|
|
|
608,724
|
|
|
612,123
|
|
|||
OZLM IV
|
June 27, 2013
|
|
600,000
|
|
|
538,856
|
|
|
541,114
|
|
|||
OZLM V
|
December 17, 2013
|
|
501,250
|
|
|
467,866
|
|
|
468,683
|
|
|||
OZLM VI
|
April 16, 2014
|
|
621,250
|
|
|
595,776
|
|
|
597,488
|
|
|||
OZLM VII
|
June 26, 2014
|
|
824,750
|
|
|
795,428
|
|
|
796,223
|
|
|||
OZLM VIII
|
September 9, 2014
|
|
622,250
|
|
|
595,685
|
|
|
596,574
|
|
|||
OZLM IX
|
December 22, 2014
|
|
510,208
|
|
|
498,995
|
|
|
495,016
|
|
|||
OZLM XI
|
March 12, 2015
|
|
510,500
|
|
|
489,818
|
|
|
491,377
|
|
|||
OZLM XII
|
May 28, 2015
|
|
565,650
|
|
|
548,902
|
|
|
547,916
|
|
|||
OZLM XIII
|
August 6, 2015
|
|
511,600
|
|
|
495,051
|
|
|
496,217
|
|
|||
OZLM XIV
|
December 21, 2015
|
|
507,420
|
|
|
502,048
|
|
|
495,798
|
|
|||
OZLM XV
|
December 20, 2016
|
|
409,250
|
|
|
396,489
|
|
|
—
|
|
|||
OZLME I
|
December 15, 2016
|
|
430,490
|
|
|
455,766
|
|
|
—
|
|
|||
OZLM XVI
|
June 8, 2017
|
|
410,250
|
|
|
401,172
|
|
|
—
|
|
|||
|
|
|
8,748,918
|
|
|
8,396,134
|
|
|
7,149,441
|
|
|||
Other funds
|
n/a
|
|
n/a
|
|
|
118,677
|
|
|
96,067
|
|
|||
|
|
|
$
|
8,748,918
|
|
|
$
|
8,514,811
|
|
|
$
|
7,245,508
|
|
|
Assets Under Management as of June 30,
|
||||||
|
2017
|
|
2016
|
||||
|
|
|
|
||||
Fund
|
(dollars in thousands)
|
||||||
Och-Ziff Real Estate Fund I
|
$
|
12,966
|
|
|
$
|
32,005
|
|
Och-Ziff Real Estate Fund II
|
294,066
|
|
|
345,174
|
|
||
Och-Ziff Real Estate Fund III
|
1,461,769
|
|
|
1,451,538
|
|
||
Och-Ziff Real Estate Credit Fund I
|
699,059
|
|
|
280,925
|
|
||
Other funds
|
149,972
|
|
|
104,179
|
|
||
|
$
|
2,617,832
|
|
|
$
|
2,213,821
|
|
|
Inception to Date as of June 30, 2017
|
|||||||||||||||||||||||||||||||
|
|
|
Total Investments
|
|
Realized/Partially Realized Investments
(1)
|
|||||||||||||||||||||||||||
|
Total Commitments
|
|
Invested Capital
(2)
|
|
Total
Value
(3)
|
|
Gross IRR
(4)
|
|
Net IRR
(5)
|
|
Gross MOIC
(6)
|
|
Invested Capital
|
|
Total
Value
|
|
Gross IRR
(4)
|
|
Gross MOIC
(6)
|
|||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Fund (Investment Period)
|
(dollars in thousands)
|
|||||||||||||||||||||||||||||||
Och-Ziff Real Estate Fund I
(7)
(2005-2010)
|
$
|
408,081
|
|
|
$
|
385,321
|
|
|
$
|
808,015
|
|
|
25.2
|
%
|
|
15.7
|
%
|
|
2.1x
|
|
$
|
372,355
|
|
|
$
|
803,995
|
|
|
26.6
|
%
|
|
2.2x
|
Och-Ziff Real Estate Fund II
(7)
(2011-2014)
|
839,508
|
|
|
756,188
|
|
|
1,390,523
|
|
|
32.7
|
%
|
|
21.8
|
%
|
|
1.8x
|
|
562,500
|
|
|
1,161,918
|
|
|
37.0
|
%
|
|
2.1x
|
|||||
Och-Ziff Real Estate Fund III
(8)
(2014-2019)
|
1,500,000
|
|
|
598,279
|
|
|
748,845
|
|
|
n/m
|
|
|
n/m
|
|
|
n/m
|
|
76,540
|
|
|
96,254
|
|
|
n/m
|
|
|
n/m
|
|||||
Och-Ziff Real Estate Credit Fund I
(8)
(2015-2019)
|
736,225
|
|
|
97,395
|
|
|
112,035
|
|
|
n/m
|
|
|
n/m
|
|
|
n/m
|
|
22,771
|
|
|
26,834
|
|
|
n/m
|
|
|
n/m
|
|||||
Other funds
|
291,469
|
|
|
161,818
|
|
|
225,061
|
|
|
n/m
|
|
|
n/m
|
|
|
n/m
|
|
39,969
|
|
|
97,598
|
|
|
n/m
|
|
|
n/m
|
|||||
|
$
|
3,775,283
|
|
|
$
|
1,999,001
|
|
|
$
|
3,284,479
|
|
|
|
|
|
|
|
|
$
|
1,074,135
|
|
|
$
|
2,186,599
|
|
|
|
|
|
|
Unrealized Investments as of June 30, 2017
|
||||||||
|
Invested Capital
|
|
Total
Value
|
|
Gross
MOIC
(6)
|
||||
|
|
|
|
|
|
||||
Fund (Investment Period)
|
(dollars in thousands)
|
|
|
||||||
Och-Ziff Real Estate Fund I (2005-2010)
(7)
|
$
|
12,966
|
|
|
$
|
4,020
|
|
|
0.3x
|
Och-Ziff Real Estate Fund II (2011-2014)
(7)
|
193,688
|
|
|
228,605
|
|
|
1.2x
|
||
Och-Ziff Real Estate Fund III (2014-2019)
(8)
|
521,739
|
|
|
652,591
|
|
|
n/m
|
||
Och-Ziff Real Estate Credit Fund I (2015-2019)
(8)
|
74,624
|
|
|
85,201
|
|
|
n/m
|
||
Other funds
|
121,849
|
|
|
127,463
|
|
|
n/m
|
||
|
$
|
924,866
|
|
|
$
|
1,097,880
|
|
|
|
(1)
|
An investment is considered partially realized when the total amount of proceeds received, including dividends, interest or other distributions of income and return of capital, represents at least 50% of invested capital.
|
(2)
|
Invested capital represents total aggregate contributions made for investments by the fund.
|
(3)
|
Total value represents the sum of realized distributions and the fair value of unrealized and partially realized investments as of
June 30, 2017
. Total value will be impacted (either positively or negatively) by future economic and other factors. Accordingly, the total value ultimately realized will likely be higher or lower than the amounts presented as of
June 30, 2017
.
|
(4)
|
Gross IRR for our real estate funds represents the estimated, unaudited, annualized return based on the timing of cash inflows and outflows for the aggregated investments as of
June 30, 2017
, including the fair value of unrealized and partially realized investments as of such date, together with any unrealized appreciation or depreciation from related hedging activity. Gross IRR is not adjusted for estimated management fees, incentive income or other fees or expenses to be paid by the fund, which would reduce the return.
|
(5)
|
Net IRR is calculated as described in footnote (4), but is reduced by all management fees and other fund-level fees and expenses not adjusted for in the calculation of gross IRR. Net IRR is further reduced by paid incentive and accrued incentive income that will be payable upon the distribution of each fund’s capital in accordance with the terms of the relevant fund. Accrued incentive income may be higher or lower at such time. The net IRR represents a composite rate of return for a fund and does not reflect the net IRR specific to any individual investor.
|
(6)
|
Gross MOIC for our real estate funds is calculated by dividing the value of a fund’s investments by the invested capital, prior to adjustments for incentive income, management fees or other expenses to be paid by the fund.
|
(7)
|
These funds have concluded their investment periods, and therefore we expect assets under management for these funds to decrease as investments are sold and the related proceeds are distributed to the investors in these funds.
|
(8)
|
These funds recently launched and have only invested a small portion of their committed capital; therefore, IRR and MOIC information is not presented, as it is not meaningful.
|
|
June 30, 2017
|
||||||
|
Longer-Term Assets Under Management
|
|
Accrued Unrecognized Incentive Income
|
||||
|
|
|
|
||||
|
(dollars in thousands)
|
||||||
Multi-strategy funds
|
$
|
1,225,212
|
|
|
$
|
26,300
|
|
Credit
|
|
|
|
||||
Opportunistic credit funds
|
3,809,826
|
|
|
194,038
|
|
||
Institutional Credit Strategies
|
8,470,904
|
|
|
—
|
|
||
Real estate funds
|
2,617,832
|
|
|
149,631
|
|
||
Other
|
280,681
|
|
|
1,368
|
|
||
|
$
|
16,404,455
|
|
|
$
|
371,337
|
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||||||
|
(dollars in thousands)
|
||||||||||||||
Management fees
|
$
|
80,082
|
|
|
$
|
143,399
|
|
|
$
|
166,337
|
|
|
$
|
300,309
|
|
Incentive income
|
66,115
|
|
|
8,136
|
|
|
117,741
|
|
|
38,723
|
|
||||
Other revenues
|
1,781
|
|
|
585
|
|
|
2,557
|
|
|
1,164
|
|
||||
Income of consolidated funds
|
968
|
|
|
438
|
|
|
1,463
|
|
|
804
|
|
||||
Total Revenues
|
$
|
148,946
|
|
|
$
|
152,558
|
|
|
$
|
288,098
|
|
|
$
|
341,000
|
|
•
|
A
$63.3 million
decrease
in management fees, driven primarily by lower assets under management in our multi-strategy funds, as well as lower average management fee rates.
See “Assets Under Management and Fund Performance—Weighted-Average Assets Under Management and Average Management Fee Rate” above for information regarding our average management fee rate.
|
•
|
A
$58.0 million
increase
in incentive income, primarily due to the following:
|
•
|
A
$134.0 million
decrease
in management fees, driven primarily by lower assets under management in our multi-strategy funds, as well as lower average management fee rates.
See “Assets Under Management and Fund Performance—Weighted-Average Assets Under Management and Average Management Fee Rate” above for information regarding our average management fee rate.
|
•
|
A
$79.0 million
increase
in incentive income, primarily due to the following:
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||||||
|
(dollars in thousands)
|
||||||||||||||
Compensation and benefits
|
$
|
69,679
|
|
|
$
|
57,743
|
|
|
$
|
139,622
|
|
|
$
|
112,004
|
|
Interest expense
|
5,152
|
|
|
5,937
|
|
|
11,432
|
|
|
11,323
|
|
||||
General, administrative and other
|
35,165
|
|
|
272,527
|
|
|
81,093
|
|
|
540,196
|
|
||||
Expenses of consolidated funds
|
460
|
|
|
33
|
|
|
544
|
|
|
299
|
|
||||
Total Expenses
|
$
|
110,456
|
|
|
$
|
336,240
|
|
|
$
|
232,691
|
|
|
$
|
663,822
|
|
•
|
A
$237.4 million
decrease
in general, administrative and other expenses
driven primarily by $214.3 million of settlements expenses accrued in the second quarter of 2016, which did not reoccur in the second quarter of 2017, and an $11.2 million decrease in professional services, which was driven primarily by lower legal fees, as well as reductions across various other expenses.
|
•
|
An
$11.9 million
increase
in compensation and benefits expenses, primarily driven by the following: (i) a $14.2 million increase in bonus expense primarily due to the decision to provide and accrue for minimum discretionary bonuses; and (ii) a $3.5 million increase in equity-based compensation. The increase in equity-based compensation expenses was primarily driven by $6.0 million of Group P Units amortization, which units were granted in 2017, partially offset by a $3.1 million decrease in Group A Units amortization due to a lower number of unvested units outstanding. These increases in compensation and benefits expenses were partially offset by a $4.7 million decrease in salaries and benefits, primarily due to lower headcount as our global headcount decreased to
495
as of
June 30, 2017
from
611
as of
June 30, 2016
.
|
•
|
A
$785 thousand
decrease
in interest expense, primarily due to the repayments of the Revolving Credit Facility and the Aircraft Loan in the first quarter of 2017, these decreases were partially offset by increases due to interest expense on the CLO Investments Loans that were entered into in November 2016 and June 2017.
|
•
|
A
$459.1 million
decrease
in general, administrative and other expenses
driven primarily by $414.3 million of settlements expense accrued in the first half of 2016, as well as a $21.4 million decrease in professional services, which was driven primarily by lower legal fees, as well as reductions across various other expenses.
|
•
|
A
$27.6 million
increase
in compensation and benefits expenses primarily driven by the following: (i) a $31.9 million increase in bonus expense primarily due to the decision to provide and accrue for minimum discretionary bonuses;(ii) a $3.4 million increase in equity-based compensation expense. The increase in equity-based compensation expense was primarily driven by $8.1 million of Group P Units amortization, which units were granted in 2017, and a $1.6 million increase in RSU amortization, offset partially by a $6.2 million decrease in Group A Units amortization due to a lower number of unvested units outstanding. Further contributing to the increase in compensation and benefits expenses was a $1.5 million increase in distributions accrued on the Group D Units. These increases were partially offset by a $9.1 million decrease in salaries and benefits, which was primarily due to lower headcount, as discussed above.
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||||||
|
(dollars in thousands)
|
||||||||||||||
Changes in tax receivable agreement liability
|
$
|
—
|
|
|
$
|
26
|
|
|
$
|
—
|
|
|
$
|
171
|
|
Net gains on investments in funds and joint ventures
|
65
|
|
|
250
|
|
|
786
|
|
|
499
|
|
||||
Net gains of consolidated funds
|
385
|
|
|
816
|
|
|
620
|
|
|
1,361
|
|
||||
Total Other Income
|
$
|
450
|
|
|
$
|
1,092
|
|
|
$
|
1,406
|
|
|
$
|
2,031
|
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||||||
|
(dollars in thousands)
|
||||||||||||||
Income taxes
|
$
|
3,244
|
|
|
$
|
10,911
|
|
|
$
|
15,300
|
|
|
$
|
29,450
|
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||||||
|
(dollars in thousands)
|
||||||||||||||
Group A Units
|
$
|
22,010
|
|
|
$
|
(115,632
|
)
|
|
$
|
31,645
|
|
|
$
|
(203,651
|
)
|
Consolidated funds
|
—
|
|
|
—
|
|
|
—
|
|
|
262
|
|
||||
Other
|
132
|
|
|
40
|
|
|
275
|
|
|
(48
|
)
|
||||
Total
|
$
|
22,142
|
|
|
$
|
(115,592
|
)
|
|
$
|
31,920
|
|
|
$
|
(203,437
|
)
|
|
|
|
|
|
|
|
|
||||||||
Redeemable noncontrolling interests
|
$
|
456
|
|
|
$
|
662
|
|
|
$
|
806
|
|
|
$
|
1,123
|
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||||||
|
(dollars in thousands)
|
||||||||||||||
Net income (loss) attributable to Class A Shareholders
|
$
|
13,098
|
|
|
$
|
(78,571
|
)
|
|
$
|
5,934
|
|
|
$
|
(147,927
|
)
|
•
|
Income allocations to our executive managing directors on their direct interests in the Oz Operating Group. Management reviews operating performance at the Oz Operating Group level, where our operations are performed, prior to making any income allocations.
|
•
|
Equity-based compensation expenses, depreciation and amortization expenses, and gains and losses on fixed assets, as management does not consider these items to be reflective of operating performance. However, the fair value of RSUs that are settled in cash to employees or executive managing directors is included as an expense at the time of settlement.
|
•
|
Changes in the tax receivable agreement liability and gains and losses on investments in funds, as management does not consider these items to be reflective of operating performance.
|
•
|
Amounts related to the consolidated 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.
|
|
Three Months Ended June 30, 2017
|
|
Three Months Ended June 30, 2016
|
||||||||||||||||||||
|
Oz Funds Segment
|
|
Other
Operations |
|
Total
Company |
|
Oz Funds Segment
|
|
Other
Operations |
|
Total
Company |
||||||||||||
|
(dollars in thousands)
|
||||||||||||||||||||||
Economic Income Basis
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Management fees
|
$
|
69,581
|
|
|
$
|
5,284
|
|
|
$
|
74,865
|
|
|
$
|
128,139
|
|
|
$
|
5,237
|
|
|
$
|
133,376
|
|
Incentive income
|
64,821
|
|
|
1,294
|
|
|
66,115
|
|
|
6,950
|
|
|
1,186
|
|
|
8,136
|
|
||||||
Other revenues
|
483
|
|
|
40
|
|
|
523
|
|
|
583
|
|
|
2
|
|
|
585
|
|
||||||
Total Economic Income Revenues
|
$
|
134,885
|
|
|
$
|
6,618
|
|
|
$
|
141,503
|
|
|
$
|
135,672
|
|
|
$
|
6,425
|
|
|
$
|
142,097
|
|
•
|
A
$58.5 million
decrease
in management fees, driven primarily by lower assets under management in our multi-strategy funds, as well as lower average management fee rates.
See “Assets Under Management and Fund Performance—Weighted-Average Assets Under Management and Average Management Fee Rate” above for information regarding our average management fee rate.
|
•
|
A
$58.0 million
increase
in incentive income, primarily due to the following:
|
|
Six Months Ended June 30, 2017
|
|
Six Months Ended June 30, 2016
|
||||||||||||||||||||
|
Oz Funds Segment
|
|
Other
Operations |
|
Total
Company |
|
Oz Funds Segment
|
|
Other
Operations |
|
Total
Company |
||||||||||||
|
(dollars in thousands)
|
||||||||||||||||||||||
Economic Income Basis
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Management fees
|
$
|
145,133
|
|
|
$
|
10,543
|
|
|
$
|
155,676
|
|
|
$
|
267,383
|
|
|
$
|
10,372
|
|
|
$
|
277,755
|
|
Incentive income
|
115,243
|
|
|
2,498
|
|
|
117,741
|
|
|
33,903
|
|
|
4,820
|
|
|
38,723
|
|
||||||
Other revenues
|
1,233
|
|
|
66
|
|
|
1,299
|
|
|
1,155
|
|
|
9
|
|
|
1,164
|
|
||||||
Total Economic Income Revenues
|
$
|
261,609
|
|
|
$
|
13,107
|
|
|
$
|
274,716
|
|
|
$
|
302,441
|
|
|
$
|
15,201
|
|
|
$
|
317,642
|
|
•
|
A
$122.1 million
decrease
in management fees, driven primarily by lower assets under management in our multi-strategy funds, as well as lower average management fee rates.
See “Assets Under Management and Fund Performance—Weighted-Average Assets Under Management and Average Management Fee Rate” above for information regarding our average management fee rate.
|
•
|
A
$79.0 million
increase
in incentive income, primarily due to the following:
|
|
Three Months Ended June 30, 2017
|
|
Three Months Ended June 30, 2016
|
||||||||||||||||||||
|
Oz Funds Segment
|
|
Other
Operations |
|
Total
Company |
|
Oz Funds Segment
|
|
Other
Operations |
|
Total
Company |
||||||||||||
|
(dollars in thousands)
|
||||||||||||||||||||||
Economic Income Basis
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Compensation and benefits
|
$
|
38,303
|
|
|
$
|
4,898
|
|
|
$
|
43,201
|
|
|
$
|
34,039
|
|
|
$
|
1,957
|
|
|
$
|
35,996
|
|
Non-compensation expenses
|
31,905
|
|
|
646
|
|
|
32,551
|
|
|
264,222
|
|
|
641
|
|
|
264,863
|
|
||||||
Total Economic Income Expenses
|
$
|
70,208
|
|
|
$
|
5,544
|
|
|
$
|
75,752
|
|
|
$
|
298,261
|
|
|
$
|
2,598
|
|
|
$
|
300,859
|
|
•
|
A
$232.3 million
decrease
in non-compensation expenses,
driven primarily by $214.3 million of settlements expenses accrued in the second quarter of 2016, which did not reoccur in the second quarter of 2017, and an $11.2 million decrease in professional services, which was driven primarily by lower legal fees, as well as reductions across various other expenses.
|
•
|
A
$7.2 million
increase
in compensation and benefit expenses primarily due to an $11.9 million increase in bonus expense, which was driven by the decision to provide and accrue for minimum discretionary bonuses, partially offset by a $4.7 million decrease in salaries and benefits expense, which was driven by lower headcount.
|
|
Six Months Ended June 30, 2017
|
|
Six Months Ended June 30, 2016
|
||||||||||||||||||||
|
Oz Funds Segment
|
|
Other
Operations |
|
Total
Company |
|
Oz Funds Segment
|
|
Other
Operations |
|
Total
Company |
||||||||||||
|
(dollars in thousands)
|
||||||||||||||||||||||
Economic Income Basis
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Compensation and benefits
|
$
|
79,668
|
|
|
$
|
9,797
|
|
|
$
|
89,465
|
|
|
$
|
65,098
|
|
|
$
|
4,654
|
|
|
$
|
69,752
|
|
Non-compensation expenses
|
73,818
|
|
|
1,284
|
|
|
75,102
|
|
|
519,873
|
|
|
2,110
|
|
|
521,983
|
|
||||||
Total Economic Income Expenses
|
$
|
153,486
|
|
|
$
|
11,081
|
|
|
$
|
164,567
|
|
|
$
|
584,971
|
|
|
$
|
6,764
|
|
|
$
|
591,735
|
|
•
|
A
$446.9 million
decrease
in non-compensation expenses,
driven primarily by $414.3 million of settlements expense accrued in the first half of 2016, as well as a $21.4 million decrease in professional services, which was driven primarily by lower legal fees, as well as reductions across various other expenses.
|
•
|
A
$19.7 million
increase
in compensation expenses primarily due to a $28.8 million increase in bonus expense, which was driven by the decision to provide and accrue for minimum discretionary bonuses, partially offset by a $9.1 million decrease in salaries and benefits expense, which was driven by lower headcount.
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||||||
|
(dollars in thousands)
|
||||||||||||||
Economic Income:
|
|
|
|
|
|
|
|
||||||||
Oz Funds Segment
|
$
|
64,677
|
|
|
$
|
(162,586
|
)
|
|
$
|
108,123
|
|
|
$
|
(282,525
|
)
|
Other Operations
|
1,074
|
|
|
3,827
|
|
|
2,026
|
|
|
8,437
|
|
||||
Total Company
|
$
|
65,751
|
|
|
$
|
(158,759
|
)
|
|
$
|
110,149
|
|
|
$
|
(274,088
|
)
|
•
|
Pay our operating expenses, primarily consisting of compensation and benefits, as well as any related tax withholding obligations, and non-compensation expenses.
|
•
|
Pay interest on our debt obligations.
|
•
|
Provide capital to facilitate the growth of our business.
|
•
|
Pay income taxes.
|
•
|
Make cash distributions in accordance with our distribution policy as discussed below under “—Dividends and Distributions.”
|
•
|
Support the future growth in our business.
|
•
|
Create new or enhance existing products and investment platforms.
|
•
|
Repay borrowings.
|
•
|
Pursue new investment opportunities.
|
•
|
Develop new distribution channels.
|
•
|
Cover potential costs incurred in connection with the legal and regulatory matters described in the notes to our consolidated financial statements included in this report.
|
•
|
The amount and timing of the income of Oz Corp will impact the payments to be made under the tax receivable agreement. To the extent that Oz Corp does not have sufficient taxable income to utilize the amortization deductions available as a result of the increased tax basis in the Oz Operating Partnerships’ assets, payments required under the tax receivable agreement would be reduced.
|
•
|
The price of our Class A Shares at the time of any exchange will determine the actual increase in tax basis of the Oz Operating Partnerships’ assets resulting from such exchange; payments under the tax receivable agreement resulting from future exchanges, if any, will be dependent in part upon such actual increase in tax basis.
|
•
|
The composition of the Oz Operating Partnerships’ assets at the time of any exchange will determine the extent to which Oz Corp may benefit from amortizing its increased tax basis in such assets and thus will impact the amount of future payments under the tax receivable agreement resulting from any future exchanges.
|
•
|
The extent to which future exchanges are taxable will impact the extent to which Oz Corp will receive an increase in tax basis of the Oz Operating Partnerships’ assets as a result of such exchanges, and thus will impact the benefit derived by Oz Corp and the resulting payments, if any, to be made under the tax receivable agreement.
|
•
|
The tax rates in effect at the time any potential tax savings are realized, which would affect the amount of any future payments under the tax receivable agreement.
|
|
|
Class A Shares
|
|
|
||||||
Payment Date
|
|
Record Date
|
|
Dividend
per Share |
|
Related Distributions
to Executive Managing Directors (dollars in thousands) |
||||
May 19, 2017
|
|
May 12, 2017
|
|
$
|
0.02
|
|
|
$
|
6,904
|
|
March 6, 2017
|
|
February 27, 2017
|
|
$
|
0.01
|
|
|
$
|
3,228
|
|
|
Three Months Ended June 30, 2017
|
||||||||||
|
Oz Funds Segment
|
|
Other
Operations |
|
Total
Company |
||||||
|
|
|
|
|
|
||||||
|
(dollars in thousands)
|
||||||||||
Income (Loss) Attributable to Class A Shareholders—GAAP
|
$
|
16,454
|
|
|
$
|
(3,356
|
)
|
|
$
|
13,098
|
|
Change in redemption value of Preferred Units
|
—
|
|
|
—
|
|
|
—
|
|
|||
Net Income (Loss) Allocated to Och-Ziff Capital Management Group LLC—GAAP
|
16,454
|
|
|
(3,356
|
)
|
|
13,098
|
|
|||
Net income allocated to Group A Units
|
22,010
|
|
|
—
|
|
|
22,010
|
|
|||
Equity-based compensation
|
22,287
|
|
|
673
|
|
|
22,960
|
|
|||
Income taxes
|
3,244
|
|
|
—
|
|
|
3,244
|
|
|||
Adjustment for expenses related to compensation and profit-sharing arrangements based on fund investment performance
|
—
|
|
|
3,793
|
|
|
3,793
|
|
|||
Depreciation, amortization and net gains and losses on fixed assets
|
1,244
|
|
|
—
|
|
|
1,244
|
|
|||
Other adjustments
|
(562
|
)
|
|
(36
|
)
|
|
(598
|
)
|
|||
Economic Income—Non-GAAP
|
$
|
64,677
|
|
|
$
|
1,074
|
|
|
$
|
65,751
|
|
|
Three Months Ended June 30, 2016
|
||||||||||
|
Oz Funds Segment
|
|
Other
Operations |
|
Total
Company |
||||||
|
|
|
|
|
|
||||||
|
(dollars in thousands)
|
||||||||||
(Loss) Income Attributable to Class A Shareholders—GAAP
|
$
|
(80,087
|
)
|
|
$
|
1,516
|
|
|
$
|
(78,571
|
)
|
Change in redemption value of Preferred Units
|
—
|
|
|
—
|
|
|
—
|
|
|||
Net (Loss) Income Allocated to Och-Ziff Capital Management Group LLC—GAAP
|
$
|
(80,087
|
)
|
|
$
|
1,516
|
|
|
$
|
(78,571
|
)
|
Net loss allocated to Group A Units
|
(115,632
|
)
|
|
—
|
|
|
(115,632
|
)
|
|||
Equity-based compensation, net of RSUs settled in cash
|
18,687
|
|
|
784
|
|
|
19,471
|
|
|||
Income taxes
|
10,911
|
|
|
—
|
|
|
10,911
|
|
|||
Allocations to Group D Units
|
1,025
|
|
|
—
|
|
|
1,025
|
|
|||
Adjustment for expenses related to compensation and profit-sharing arrangements based on fund investment performance
|
—
|
|
|
1,425
|
|
|
1,425
|
|
|||
Changes in tax receivable agreement liability
|
(26
|
)
|
|
—
|
|
|
(26
|
)
|
|||
Depreciation and amortization
|
3,394
|
|
|
186
|
|
|
3,580
|
|
|||
Other adjustments
|
(858
|
)
|
|
(84
|
)
|
|
(942
|
)
|
|||
Economic Income—Non-GAAP
|
$
|
(162,586
|
)
|
|
$
|
3,827
|
|
|
$
|
(158,759
|
)
|
|
Six Months Ended June 30, 2017
|
||||||||||
|
Oz Funds Segment
|
|
Other
Operations |
|
Total
Company |
||||||
|
|
|
|
|
|
||||||
|
(dollars in thousands)
|
||||||||||
Income (Loss) Attributable to Class A Shareholders—GAAP
|
$
|
10,974
|
|
|
$
|
(5,040
|
)
|
|
$
|
5,934
|
|
Change in redemption value of Preferred Units
|
2,853
|
|
|
—
|
|
|
2,853
|
|
|||
Net Income (Loss) Allocated to Och-Ziff Capital Management Group LLC—GAAP
|
13,827
|
|
|
(5,040
|
)
|
|
8,787
|
|
|||
Net income allocated to Group A Units
|
31,645
|
|
|
—
|
|
|
31,645
|
|
|||
Equity-based compensation
|
39,985
|
|
|
1,453
|
|
|
41,438
|
|
|||
Income taxes
|
15,296
|
|
|
4
|
|
|
15,300
|
|
|||
Allocations to Group D Units
|
3,310
|
|
|
50
|
|
|
3,360
|
|
|||
Adjustment for expenses related to compensation and profit-sharing arrangements based on fund investment performance
|
—
|
|
|
5,772
|
|
|
5,772
|
|
|||
Depreciation, amortization and net gains and losses on fixed assets
|
5,456
|
|
|
—
|
|
|
5,456
|
|
|||
Other adjustments
|
(1,396
|
)
|
|
(213
|
)
|
|
(1,609
|
)
|
|||
Economic Income—Non-GAAP
|
$
|
108,123
|
|
|
$
|
2,026
|
|
|
$
|
110,149
|
|
|
Six Months Ended June 30, 2016
|
||||||||||
|
Oz Funds Segment
|
|
Other
Operations |
|
Total
Company |
||||||
|
|
|
|
|
|
||||||
|
(dollars in thousands)
|
||||||||||
(Loss) Income Attributable to Class A Shareholders—GAAP
|
$
|
(151,809
|
)
|
|
$
|
3,882
|
|
|
$
|
(147,927
|
)
|
Change in redemption value of Preferred Units
|
—
|
|
|
—
|
|
|
—
|
|
|||
Net (Loss) Income Allocated to Och-Ziff Capital Management Group LLC—GAAP
|
(151,809
|
)
|
|
3,882
|
|
|
(147,927
|
)
|
|||
Net loss allocated to Group A Units
|
(203,651
|
)
|
|
—
|
|
|
(203,651
|
)
|
|||
Equity-based compensation, net of RSUs settled in cash
|
36,655
|
|
|
1,358
|
|
|
38,013
|
|
|||
Income taxes
|
29,450
|
|
|
—
|
|
|
29,450
|
|
|||
Allocations to Group D Units
|
1,900
|
|
|
—
|
|
|
1,900
|
|
|||
Adjustment for expenses related to compensation and profit-sharing arrangements based on fund investment performance
|
—
|
|
|
2,689
|
|
|
2,689
|
|
|||
Changes in tax receivable agreement liability
|
(171
|
)
|
|
—
|
|
|
(171
|
)
|
|||
Depreciation and amortization
|
6,609
|
|
|
373
|
|
|
6,982
|
|
|||
Other adjustments
|
(1,508
|
)
|
|
135
|
|
|
(1,373
|
)
|
|||
Economic Income—Non-GAAP
|
$
|
(282,525
|
)
|
|
$
|
8,437
|
|
|
$
|
(274,088
|
)
|
|
Three Months Ended June 30, 2017
|
|
Three Months Ended June 30, 2016
|
||||||||||||||||||||
|
Oz Funds Segment
|
|
Other
Operations |
|
Total
Company |
|
Oz Funds Segment
|
|
Other
Operations |
|
Total
Company |
||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
|
(dollars in thousands)
|
||||||||||||||||||||||
Management fees—GAAP
|
$
|
74,798
|
|
|
$
|
5,284
|
|
|
$
|
80,082
|
|
|
$
|
138,162
|
|
|
$
|
5,237
|
|
|
$
|
143,399
|
|
Adjustment to management fees
(1)
|
(5,217
|
)
|
|
—
|
|
|
(5,217
|
)
|
|
(10,023
|
)
|
|
—
|
|
|
(10,023
|
)
|
||||||
Management Fees—Economic Income Basis—Non-GAAP
|
69,581
|
|
|
5,284
|
|
|
74,865
|
|
|
128,139
|
|
|
5,237
|
|
|
133,376
|
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Incentive income—GAAP
|
64,821
|
|
|
1,294
|
|
|
66,115
|
|
|
6,950
|
|
|
1,186
|
|
|
8,136
|
|
||||||
Adjustment to incentive income
(2)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Incentive Income—Economic Income Basis—Non-GAAP
|
64,821
|
|
|
1,294
|
|
|
66,115
|
|
|
6,950
|
|
|
1,186
|
|
|
8,136
|
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Other revenues—GAAP
|
1,741
|
|
|
40
|
|
|
1,781
|
|
|
583
|
|
|
2
|
|
|
585
|
|
||||||
Adjustment to other revenues
(3)
|
(1,258
|
)
|
|
—
|
|
|
(1,258
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Other Revenues—Economic Income Basis—Non-GAAP
|
483
|
|
|
40
|
|
|
523
|
|
|
583
|
|
|
2
|
|
|
585
|
|
||||||
Total Revenues—Economic Income Basis—Non-GAAP
|
$
|
134,885
|
|
|
$
|
6,618
|
|
|
$
|
141,503
|
|
|
$
|
135,672
|
|
|
$
|
6,425
|
|
|
$
|
142,097
|
|
|
Six Months Ended June 30, 2017
|
|
Six Months Ended June 30, 2016
|
||||||||||||||||||||
|
Oz Funds Segment
|
|
Other
Operations |
|
Total
Company |
|
Oz Funds Segment
|
|
Other
Operations |
|
Total
Company |
||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
|
(dollars in thousands)
|
||||||||||||||||||||||
Management fees—GAAP
|
$
|
155,794
|
|
|
$
|
10,543
|
|
|
$
|
166,337
|
|
|
$
|
289,937
|
|
|
$
|
10,372
|
|
|
$
|
300,309
|
|
Adjustment to management fees
(1)
|
(10,661
|
)
|
|
—
|
|
|
(10,661
|
)
|
|
(22,554
|
)
|
|
—
|
|
|
(22,554
|
)
|
||||||
Management Fees—Economic Income Basis—Non-GAAP
|
145,133
|
|
|
10,543
|
|
|
155,676
|
|
|
267,383
|
|
|
10,372
|
|
|
277,755
|
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Incentive income—GAAP
|
115,243
|
|
|
2,498
|
|
|
117,741
|
|
|
33,903
|
|
|
4,820
|
|
|
38,723
|
|
||||||
Adjustment to incentive income
(2)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Incentive Income—Economic Income Basis—Non-GAAP
|
115,243
|
|
|
2,498
|
|
|
117,741
|
|
|
33,903
|
|
|
4,820
|
|
|
38,723
|
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Other revenues—GAAP
|
2,491
|
|
|
66
|
|
|
2,557
|
|
|
1,155
|
|
|
9
|
|
|
1,164
|
|
||||||
Adjustment to other revenues
(3)
|
(1,258
|
)
|
|
—
|
|
|
(1,258
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Other Revenues—Economic Income Basis—Non-GAAP
|
1,233
|
|
|
66
|
|
|
1,299
|
|
|
1,155
|
|
|
9
|
|
|
1,164
|
|
||||||
Total Revenues—Economic Income Basis—Non-GAAP
|
$
|
261,609
|
|
|
$
|
13,107
|
|
|
$
|
274,716
|
|
|
$
|
302,441
|
|
|
$
|
15,201
|
|
|
$
|
317,642
|
|
(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 funds is also removed.
|
(2)
|
Adjustment to exclude the impact of eliminations related to the consolidated funds.
|
(3)
|
Adjustment to exclude realized gains on sale of fixed assets.
|
|
Three Months Ended June 30, 2017
|
|
Three Months Ended June 30, 2016
|
||||||||||||||||||||
|
Oz Funds Segment
|
|
Other
Operations |
|
Total
Company |
|
Oz Funds Segment
|
|
Other
Operations |
|
Total
Company |
||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
|
(dollars in thousands)
|
||||||||||||||||||||||
Compensation and benefits—GAAP
|
$
|
60,315
|
|
|
$
|
9,364
|
|
|
$
|
69,679
|
|
|
$
|
53,577
|
|
|
$
|
4,166
|
|
|
$
|
57,743
|
|
Adjustment to compensation and benefits
(1)
|
(22,012
|
)
|
|
(4,466
|
)
|
|
(26,478
|
)
|
|
(19,538
|
)
|
|
(2,209
|
)
|
|
(21,747
|
)
|
||||||
Compensation and Benefits—Economic Income Basis—Non-GAAP
|
$
|
38,303
|
|
|
$
|
4,898
|
|
|
$
|
43,201
|
|
|
$
|
34,039
|
|
|
$
|
1,957
|
|
|
$
|
35,996
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Interest expense and general, administrative and other expenses—GAAP
|
$
|
39,671
|
|
|
$
|
646
|
|
|
$
|
40,317
|
|
|
$
|
277,637
|
|
|
$
|
827
|
|
|
$
|
278,464
|
|
Adjustment to interest expense and general, administrative and other expenses
(2)
|
(7,766
|
)
|
|
—
|
|
|
(7,766
|
)
|
|
(13,415
|
)
|
|
(186
|
)
|
|
(13,601
|
)
|
||||||
Non-Compensation Expenses—Economic Income Basis—Non-GAAP
|
$
|
31,905
|
|
|
$
|
646
|
|
|
$
|
32,551
|
|
|
$
|
264,222
|
|
|
$
|
641
|
|
|
$
|
264,863
|
|
|
Six Months Ended June 30, 2017
|
|
Six Months Ended June 30, 2016
|
||||||||||||||||||||
|
Oz Funds Segment
|
|
Other
Operations |
|
Total
Company |
|
Oz Funds Segment
|
|
Other
Operations |
|
Total
Company |
||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
|
(dollars in thousands)
|
||||||||||||||||||||||
Compensation and benefits—GAAP
|
$
|
122,550
|
|
|
$
|
17,072
|
|
|
$
|
139,622
|
|
|
$
|
103,303
|
|
|
$
|
8,701
|
|
|
$
|
112,004
|
|
Adjustment to compensation and benefits
(1)
|
(42,882
|
)
|
|
(7,275
|
)
|
|
(50,157
|
)
|
|
(38,205
|
)
|
|
(4,047
|
)
|
|
(42,252
|
)
|
||||||
Compensation and Benefits—Economic Income Basis—Non-GAAP
|
$
|
79,668
|
|
|
$
|
9,797
|
|
|
$
|
89,465
|
|
|
$
|
65,098
|
|
|
$
|
4,654
|
|
|
$
|
69,752
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Interest expense and general, administrative and other expenses—GAAP
|
$
|
91,241
|
|
|
$
|
1,284
|
|
|
$
|
92,525
|
|
|
$
|
549,036
|
|
|
$
|
2,483
|
|
|
$
|
551,519
|
|
Adjustment to interest expense and general, administrative and other expenses
(2)
|
(17,423
|
)
|
|
—
|
|
|
(17,423
|
)
|
|
(29,163
|
)
|
|
(373
|
)
|
|
(29,536
|
)
|
||||||
Non-Compensation Expenses—Economic Income Basis—Non-GAAP
|
$
|
73,818
|
|
|
$
|
1,284
|
|
|
$
|
75,102
|
|
|
$
|
519,873
|
|
|
$
|
2,110
|
|
|
$
|
521,983
|
|
(1)
|
Adjustment to exclude equity-based compensation, as management does not consider these non-cash expenses to be reflective of our operating performance. However, the fair value of RSUs that are settled in cash to employees or executive managing directors is included as an expense at the time of settlement. Further, expenses related to compensation and profit-sharing arrangements based on fund investment performance are generally recognized at the same time as the related incentive income revenue, 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 Group D Units are also excluded, as management reviews operating performance at the Oz Operating Group level, where our operations are performed, prior to making any income allocations. Further, deferred cash compensation is expensed in full in the year granted for Economic Income, rather than over the service period for GAAP.
|
(2)
|
Adjustment to exclude depreciation, amortization and losses on fixed assets as management does not consider these items to be reflective of our operating performance. Additionally, recurring placement and related service fees are excluded, as management considers these fees a reduction in management fees, not an expense.
|
|
Three Months Ended June 30, 2017
|
|
Three Months Ended June 30, 2016
|
||||||||||||||||||||
|
Oz Funds Segment
|
|
Other
Operations |
|
Total
Company |
|
Oz Funds Segment
|
|
Other
Operations |
|
Total
Company |
||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
|
(dollars in thousands)
|
||||||||||||||||||||||
Net income (loss) attributable to noncontrolling interests—GAAP
|
$
|
21,956
|
|
|
$
|
186
|
|
|
$
|
22,142
|
|
|
$
|
(115,646
|
)
|
|
$
|
54
|
|
|
$
|
(115,592
|
)
|
Adjustment to net income (loss) attributable to noncontrolling interests
(1)
|
(21,956
|
)
|
|
(186
|
)
|
|
(22,142
|
)
|
|
115,643
|
|
|
(54
|
)
|
|
115,589
|
|
||||||
Net Loss Attributable to Noncontrolling Interests—Economic Income Basis—Non-GAAP
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
(3
|
)
|
|
$
|
—
|
|
|
$
|
(3
|
)
|
|
Six Months Ended June 30, 2017
|
|
Six Months Ended June 30, 2016
|
||||||||||||||||||||
|
Oz Funds Segment
|
|
Other
Operations |
|
Total
Company |
|
Oz Funds Segment
|
|
Other
Operations |
|
Total
Company |
||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
|
(dollars in thousands)
|
||||||||||||||||||||||
Net income (loss) attributable to noncontrolling interests—GAAP
|
$
|
31,579
|
|
|
$
|
341
|
|
|
$
|
31,920
|
|
|
$
|
(203,667
|
)
|
|
$
|
230
|
|
|
$
|
(203,437
|
)
|
Adjustment to net income (loss) attributable to noncontrolling interests
(1)
|
(31,579
|
)
|
|
(341
|
)
|
|
(31,920
|
)
|
|
203,662
|
|
|
(230
|
)
|
|
203,432
|
|
||||||
Net Loss Attributable to Noncontrolling Interests—Economic Income Basis—Non-GAAP
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
(5
|
)
|
|
$
|
—
|
|
|
$
|
(5
|
)
|
(1)
|
Adjustment to exclude amounts allocated to our executive managing directors on their interests in the Oz Operating Group, as management reviews operating performance at the Oz Operating Group level. We conduct substantially all of our activities through the Oz Operating Group. Additionally, the impact of the consolidated funds, including the allocation of earnings to investors in those funds, is also removed.
|
Exhibit No.
|
|
Description
|
|
|
|
|
||
|
||
|
||
|
||
101.INS
|
|
XBRL Instance Document
|
101.SCH
|
|
XBRL Taxonomy Extension Schema Document
|
101.CAL
|
|
XBRL Taxonomy Extension Calculation Linkbase Document
|
101.DEF
|
|
XBRL Taxonomy Extension Definition Linkbase Document
|
101.LAB
|
|
XBRL Taxonomy Extension Label Linkbase Document
|
101.PRE
|
|
XBRL Taxonomy Extension Presentation Linkbase Document
|
|
OCH-ZIFF CAPITAL MANAGEMENT GROUP LLC
|
||
|
|
|
|
|
By:
|
|
/s/ Alesia J. Haas
|
|
|
|
Alesia J. Haas
|
|
|
|
Chief Financial Officer and Executive Managing Director
|
Name:
|
Alesia J. Haas
|
Title:
|
Chief Financial Officer
|
Name:
|
Alesia J. Haas
|
Title:
|
Chief Financial Officer
|
Name:
|
Alesia J. Haas
|
Title:
|
Chief Financial Officer
|
Name:
|
Alesia J. Haas
|
Title:
|
Chief Financial Officer
|
By
:
|
/s/ Alfred Chi--
|
1.
|
I have reviewed this
Quarterly Report on Form 10-Q
of Och-Ziff Capital Management Group LLC;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
a.
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
b.
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
c.
|
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
d.
|
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
5.
|
The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
|
a.
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
b.
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
Date:
|
August 2, 2017
|
|
/s/ Daniel S. Och
|
|
|
|
|
Name:
|
Daniel S. Och
|
|
|
|
Title:
|
Chief Executive Officer and Executive Managing Director
|
1.
|
I have reviewed this
Quarterly Report on Form 10-Q
of Och-Ziff Capital Management Group LLC;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
a.
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
b.
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
c.
|
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
d.
|
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
5.
|
The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
|
a.
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
b.
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
Date:
|
August 2, 2017
|
|
/s/ Alesia J. Haas
|
|
|
|
|
Name:
|
Alesia J. Haas
|
|
|
|
Title:
|
Chief Financial Officer and Executive Managing Director
|
i.
|
The
Form 10-Q
fully complies with the requirements of Section 13(a) or Section 15(d) of the Securities Exchange Act of 1934 (15 U.S.C. 78m(a) or 78o(d)); and
|
ii.
|
The information contained in the
Form 10-Q
fairly presents, in all material respects, the financial condition and results of operations of the Company.
|
Date:
|
August 2, 2017
|
|
/s/ Daniel S. Och
|
|
|
|
|
Name:
|
Daniel S. Och
|
|
|
|
Title:
|
Chief Executive Officer and Executive Managing Director
|
|
|
|
|
|
Date:
|
August 2, 2017
|
|
/s/ Alesia J. Haas
|
|
|
|
|
Name:
|
Alesia J. Haas
|
|
|
|
Title:
|
Chief Financial Officer and Executive Managing Director
|