Institutional Investor's Alpha Magazine - May 2008 - (Page 33)

Och-Ziff veterans warn that the pressure to meet analysts’ expectations can take a toll. “You need to make compromises as an executive of a public company,” says a former high-ranking Wall Street executive. “The pressure to meet near-term earnings expectations is very high, which makes it much harder to develop strategies and programs that have a longer time horizon, even if they’re in the best long-term interests of the business.” True to form, however, Och is using his new capital very selectively, to prepare the ground for longer-term investments. Over the past year he and his senior partners have been working on a spate of new deals, including two recently disclosed joint ventures. Last fall the ﬁrm won the opportunity to develop residential properties with one of the largest real estate companies in Turkey. In January, Och-Ziff announced it would be partnering with Mvelaphanda Holdings, a private investment ﬁ rm in South Africa co-founded in 1998 by businessman Mosima (Tokyo) Sexwale, who was a political prisoner alongside Nelson Mandela during apartheid. In conjunction with Palladino Holdings, another private investment ﬁrm in South Africa, Och-Ziff and Mvelaphanda — the word means progress — are raising money to invest in mining and oil and natural-gas exploration. Och also plans to develop an emerging-markets investment platform, much in the style of his ﬁ rm’s current geographically focused funds, and has recently spoken about opportunities for Residential Credit Services, a Dallas-based subprime-mortgage servicing company that Och-Ziff helped found two years ago to buy and reorganize portfolios of home loans. Although Och’s limited partners credit him with thoughtfully building his business, they are watching to see whether his team can retain its competitive edge as it pursues private investments and far-ﬂung joint ventures. The Howard Hughes Medical Institute’s Zimmerman worries that the pressures of extending the ﬁrm’s business platform while answering to Wall Street may distract Och from investing, especially as the ﬁrm gets bigger. “It is harder to produce high compound returns with tens of billions of dollars of assets under management than it is with single-digit billions,” Zimmerman says. “We’re extremely mindful about the capacity of these firms as they manage increasingly large amounts of money, and we’re not shy about leaving if we think that capacity has been exceeded.” Och won’t retreat even if investors balk. Having spent the past 14 years preparing for this moment, he remains committed to his plan. prime partner Unique liquidity. Start-up services. Commission management. Advanced algorithms and analytics. ITG is a smart supplement to your existing prime broker relationships. With more than 20 years experience serving hedge funds, innovative technology, and a broad range of customizable solutions, ITG is a partner primed for your success. Add ITG to your broker mix. You’ll appreciate our unparalleled service and confidential, broker-neutral approach. Please contact us at +1.212.444.6300, hedge@itg.com or visit www.itg.com/hedge. E N D - T O - E N D T R A D I N G S O L U T I O N STM www.itg.com ©2008 Investment Technology Group, Inc. Member FINRA, SIPC. 91907-52793 MAY 2008 • INSTITUTIONAL INVESTOR’S ALPHA • 33 http://www.itg.com http://www.itg.com/hedge http://www.itg.com

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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