Institutional Investor's Alpha Magazine - May 2008 - (Page 25)

Cover Story Och-Ziff OZ Welcome to By Loch Adamson O n July 2, 2007, Daniel Och, founder, chairman and CEO of New York– based Och-Ziff Capital Management Group, celebrated a milestone in the ﬁ rm’s history with his senior partners. After months of preparation Och-Ziff, known to its investors as OZ, had formally ﬁled notice with the Securities and Exchange Commission of the ﬁrm’s intention to pursue an IPO. The timing seemed ideal: With global equity markets rising and liquidity plentiful, Och and his team anticipated being able to raise billions without much difﬁculty. But within a few weeks, the contagion from subprime mortgages had infected the world’s equity markets, sending stock prices sharply lower and volatility toward the sky. Undaunted, Och and his partners pressed ahead, even as market sentiment weakened. Over the next three months, a slew of banks began writing down multibillion-dollar losses on their subprime exposure, and Citigroup CEO Charles Prince and Merrill Lynch & Co. CEO Stanley O’Neal resigned as the magnitude of their missteps became known. In the wake of a dismal earnings season, arguably one of the worst in Wall Street’s history, Och and his team took the ﬁrm public at $32 a share on November 14. The share price dropped by 4.2 percent on the ﬁrst day of trading. By May 1, Och-Ziff’s shares had lost 33 percent of their initial value, closing at $21.33. For the proud, intensely private Och, watching his company’s stock get buffeted by volatile markets has not been easy. “Am I frustrated?” says the lanky, ginger-haired, 47-year-old CEO. “Of course I am. We are as committed to building value for our public shareholders as we have always been for our fund investors.” Och’s frustration is pro Daniel Och is trying fessional and personal. Although the former Goldto turn Och-Ziff Capital man, Sachs & Co. equities trader’s stake in Och-Ziff Management into wa s wort h more t ha n a global deal-making $4.5 billion the morning after the IPO, he didn’t giant. Taking the ﬁrm take his multistrategy ﬁrm public just to get rich. He public last fall in the face and his partners embarked of market turbulence on the IPO to raise ﬂexible long-term capital to fund was just the ﬁrst step. the expansion of the ﬁrm’s investment platform, create a currency to help retain employees and increase recognition of the Och-Ziff name worldwide — all part of a plan to build a powerful, enduring global ﬁnancial services business. Since launching his multistrategy arbitrage firm 14 years ago with $100 million from the Ziff family’s pubMAY 2008 • INSTITUTIONAL INVESTOR’S ALPHA • 25

Table of Contents Feed for the Digital Edition of Institutional Investor's Alpha Magazine - May 2008

Institutional Investor's Alpha Magazine - May 2008 Contents Letter from the Editor Longs & Shorts Pension Corner: Send in the Clones The Good Guys: Outside the Box Cover Story: Welcome to Oz Interview: The Tipping Point Regulation: When Sentinels Go Astray Strategies: Taking Credit Research Center: The Hedge Fund 100 Book Excerpt: Shoot the Messenger Alpha Bytes: VaR Enough? Unhedged: Commentary: Not Your Father's Activist

Institutional Investor's Alpha Magazine - May 2008

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