(Adds details on earnings)
By Svea Herbst-Bayliss
BOSTON, Nov 3 (Reuters) - Och-Ziff Capital Management Group on Tuesday reported a lower quarterly profit but met Wall Street’s estimates, as the hedge fund company earned less in management fees.
New York-based Och-Ziff said third-quarter distributable earnings dropped 43 percent to $66.1 million, or 13 cents per adjusted Class A share, compared with $116.7 million, or 23 cents a share a year ago.
Total revenue climbed to $325.9 million from $306.7 million, but management fees stood at $162.8 million, down from $171.9 million a year earlier.
Distributable earnings, which the company and analysts focus on, exclude costs from Och-Ziff’s November 2007 initial public offering. Och-Ziff is one of only a handful of publicly traded hedge funds and, like most hedge funds, it earns an incentive fee on top of a management fee when its funds perform well.
Results matched the average analysts’ estimate of 13 cents per share, according to ThomsonReuters I/B/E/S.
Stockholders will receive a 4-cent-per-share dividend, less than the 12 cents for the second quarter and 22 cents for the first quarter.
Och-Ziff, which manages money for state pension funds, foreign governments and individuals, reported assets of $44.4 billion on Nov. 1, down from $44.6 billion at the end of the third quarter. That marked a 5 percent decline from a year earlier when assets stood at $46.8 billion.
Most of the money Och-Ziff oversees is invested in its multi-strategy funds, but assets there shrunk to $29.5 billion from $33.8 billion a year earlier as investors pulled out $4.8 billion in cash. Yet demand for the firm’s dedicated credit funds rose, with investors adding $2.9 billion in new money to boost overall assets of those portfolios to $11.9 billion.
The company also bought back 4.6 million shares from a former executive. Och-Ziff’s stock price closed at $7.35 on Monday on the New York Stock Exchange, having fallen 37 percent since January.
Och-Ziff, like other hedge fund managers, faced losses in recent months as a growth slowdown in China and falling energy prices unnerved markets. The OZ Master Fund, the firm’s biggest single portfolio with $24.3 billion in assets, lost 1.99 percent in the first nine months of the year. The OZ Asia Master fund was up 2.84 percent, while the OZ Europe Master Fund was up 3.83 percent over the same period.
“We are confident in our investment process and optimistic about the prospects of our current portfolio,” Och-Ziff Chairman and Chief Executive Officer Daniel Och said, acknowledging the recent tough market conditions. (Reporting by Svea Herbst-Bayliss; Editing by Chizu Nomiyama and Paul Simao)