SOURCE: Och-Ziff Capital Management Group LLC

Och-Ziff Capital Management Group LLC

February 11, 2016 07:30 ET

Och-Ziff Capital Management Group LLC Reports 2015 Fourth Quarter and Full Year Results

NEW YORK, NY--(Marketwired - February 11, 2016) - Och-Ziff Capital Management Group LLC (NYSE: OZM) (the "Company" or "Och-Ziff") today reported GAAP net loss allocated to Class A Shareholders ("GAAP Net Loss") of $22.3 million, or $0.12 per basic and diluted Class A Share, for the 2015 fourth quarter and GAAP Net Income of $25.7 million, or $0.14 per basic and diluted Class A Share, for the 2015 full year.

Summary

  • Distributable Earnings of $251.9 million, or $0.49 per Adjusted Class A Share, for the 2015 full year. This amount reflects a loss of $36.1 million, or $0.07 per Adjusted Class A Share, for the 2015 fourth quarter.
  • No cash dividend declared for the Company's Class A Shares for the 2015 fourth quarter.
  • Assets under management totaled $45.5 billion as of December 31, 2015.
    • Longer-dated assets under management, which are those subject to initial commitment periods of three years or longer, were $16.8 billion, or 37% of the Company's total assets under management as of December 31, 2015, increasing 11% year-over-year.
    • Assets under management in the Company's dedicated credit, real estate and other single-strategy funds were $16.0 billion, comprising 35% of assets under management as of December 31, 2015, increasing 19% year-over-year.
    • Estimated assets under management totaled $43.7 billion as of February 1, 2016.

"The 2015 fourth quarter capped off a difficult year for equity and credit markets globally, and 2016 has gotten off to a challenging start," said Dan Och, Chairman and Chief Executive Officer of Och-Ziff. "However, this type of environment plays to our strengths and we are well positioned to manage such uncertainty. Dynamic capital allocation has always been a cornerstone of much of our business, and it will be critical in this environment.

"As we look ahead to what will likely be a volatile year, we see considerable opportunity for experienced managers with sufficient capital and deep investment expertise. In challenging markets, investors turn to Och-Ziff for a number of reasons: our risk management, our reputation for capital preservation, and our ability to produce results towards the end of a downturn. They seek asset managers who can offer exactly what we have: a long track record of excellent performance, a diverse array of products, a strong, global franchise and a robust infrastructure. It is this combined offering that enables us to take advantage of opportunities across markets, and I believe this agility will be crucial in 2016."

(1) Please see Exhibit 7 that accompanies this press release for additional information regarding the returns of the OZ Master Fund.

GAAP NET INCOME (LOSS) ALLOCATED TO CLASS A SHAREHOLDERS

For the 2015 fourth quarter, Och-Ziff reported a GAAP Net Loss of $22.3 million, or $0.12 per basic and diluted Class A Share, compared to GAAP net income allocated to class A Shareholders ("GAAP Net Income") of $84.7 million, or $0.49 per basic and $0.47 per diluted Class A Share, for the 2014 fourth quarter. For the 2015 full year, Och-Ziff reported GAAP Net Income of $25.7 million, or $0.14 per basic and diluted Class A Share, compared to $142.4 million, or $0.82 per basic and $0.80 per diluted Class A Share, for the 2014 full year.

The year-over-year decrease for both the Company's fourth quarter and full year GAAP results was primarily driven by lower incentive income and higher non-compensation expenses, partially offset by lower bonus expense.

Throughout this press release, the Company presents financial measures that are not prepared in accordance with GAAP. For a discussion of these non-GAAP measures, please see the section titled "Non-GAAP Financial Measures" at the end of this press release.

DISTRIBUTABLE EARNINGS (NON-GAAP)

The Company reported a loss on a Distributable Earnings basis for the 2015 fourth quarter of $36.1 million, or $0.07 per Adjusted Class A Share, compared to a profit of $255.4 million, or $0.50 per Adjusted Class A Share, for the 2014 fourth quarter. Distributable Earnings for the 2015 full year were $251.9 million, or $0.49 per Adjusted Class A Share, 57% lower than $590.3 million, or $1.16 per Adjusted Class A Share, for the 2014 full year.

The year-over-year decrease in Distributable Earnings for both the 2015 fourth quarter and full year was primarily due to lower incentive income and higher non-compensation expenses, partially offset by lower cash bonus expense and lower Adjusted Income Taxes. Please see the "Economic Income (Non-GAAP)" section of this press release for a discussion of the drivers affecting the Company's Economic Income.

Distributable Earnings is a non-GAAP measure. For reconciliations of Distributable Earnings to the respective GAAP Net Income for the periods discussed above, please see Exhibits 2 and 3 that accompany this press release. Additionally, please see the section titled "Non-GAAP Financial Measures" at the end of this press release, including the definitions of Distributable Earnings, Adjusted Income Taxes and Adjusted Class A Shares.

ASSETS UNDER MANAGEMENT

                               

(dollars in billions)
  December 31,
2015
    December 31,
2014
                   
                                       
Multi-strategy funds   $ 29.5     $ 34.1                        
Credit                                      
  Opportunistic credit funds     5.4       5.1                        
  Institutional Credit Strategies     7.2       5.2                        
Real estate funds     2.0       2.0                        
Other     1.3       1.1                        
Total   $ 45.5     $ 47.5                        
                                       
                                       
    Year-Over-Year Change  
(dollars in billions)   Inflows /
(Outflows)
    Distributions
/ Other
Reductions
   
Appreciation /
(Depreciation)
   

Total
   

%
 
                                       
Multi-strategy funds   $ (4.7 )   $ -     $ 0.1     $ (4.6 )   -13 %
Credit                                      
  Opportunistic credit funds     1.1       (0.7 )     (0.1 )     0.3     6 %
  Institutional Credit Strategies     2.1       -       -       2.1     40 %
Real estate funds     0.2       (0.2 )     -       -     1 %
Other     0.1       -       -       0.2     14 %
Total   $ (1.2 )   $ (0.9 )   $ -     $ (2.0 )   -4 %
                                       

Totals may not sum due to rounding. Please see Exhibit 6 for detailed information.

As of December 31, 2015, assets under management totaled $45.5 billion, a decrease of $2.0 billion, or 4%, from December 31, 2014, which was driven by capital net outflows of $1.2 billion and $907.9 million of distributions to investors and other reductions in the Company's closed-end opportunistic credit and real estate funds. These amounts were partially offset by performance-related appreciation of $44.8 million. During the month of December, the Company had approximately $1.0 billion of intra-month capital net inflows, which are included in the $45.5 billion of assets under management as of December 31, 2015.

Assets under management decreased to an estimated $43.7 billion as of February 1, 2016. This decrease reflected estimated performance-related depreciation of approximately $628.8 million in January and capital net outflows of approximately $1.2 billion, which was comprised of approximately $936.4 million of capital net outflows on January 1, 2016 and approximately $244.2 million of capital net outflows from January 2, 2016 to February 1, 2016.

Please see detailed assets under management and fund information on Exhibits 6 through 8 that accompany this press release.

Multi-strategy funds

Assets under management in the Company's multi-strategy funds totaled $29.5 billion as of December 31, 2015, decreasing 13%, or $4.6 billion, year-over-year. This change was driven by net capital outflows of $4.7 billion, primarily in the OZ Master Fund, partially offset by performance-related appreciation of $129.1 million.

For the 2015 full year, the OZ Master Fund, the Company's largest multi-strategy fund, generated a gross return of 1.6% and a net return of -0.4%. On a gross basis, U.S. merger arbitrage and long/short equity special situations in Asia were the largest contributors to the return. The Company's credit strategies globally made a slightly positive contribution. Weak performance in U.S. long/short equity special situations partially offset these returns.

The OZ Asia and OZ Europe Master Funds, the company's region-specific multi-strategy funds, both had strong performance in 2015. They generated 2015 full-year gross returns of 13.8% and 8.9%, respectively, and net returns of 9.6% and 5.8%, respectively.

Credit

Assets under management in the Company's dedicated credit products totaled $12.6 billion as of December 31, 2015, increasing $2.4 billion, or 23%, year-over-year. This change was driven by capital net inflows of $3.2 billion, partially offset by $727.2 million of distributions and other reductions in the Company's closed-end opportunistic credit funds and $111.3 million of performance-related depreciation.

Opportunistic credit

The Company's opportunistic credit funds seek to generate risk-adjusted returns by capturing value in mispriced investments across disrupted, dislocated and distressed corporate, structured and private credit markets globally.

Assets under management in the Company's opportunistic credit funds totaled $5.4 billion as of December 31, 2015, increasing 6% year-over-year. This increase was primarily due to $1.1 billion of capital net inflows primarily into the Customized Credit Focused Platform and OZ Credit Opportunities Master Fund, the Company's global opportunistic credit fund, partially offset by $727.2 million of distributions and other reductions related to the Company's closed-end opportunistic credit funds. Also offsetting the increase was $108.9 million of performance-related depreciation, driven by negative investment performance across the Company's open-end opportunistic credit funds.

For the 2015 full year, the OZ Credit Opportunities Fund generated a gross return of -4.4% and a net return of -5.2%. On a gross basis, modestly positive performance in the fund's European credit portfolio was offset by weaker performance in its U.S. portfolio.

Institutional Credit Strategies

Institutional Credit Strategies ("ICS") is the Company's 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 for clients.

Assets under management in ICS totaled $7.2 billion as of December 31, 2015, increasing $2.1 billion, or 40%, year-over-year. The increase was primarily driven by four CLOs that closed in the year-over-year period. ICS managed 13 CLOs as of December 31, 2015.

Real estate funds

Assets under management in the Company's real estate funds totaled $2.0 billion as of December 31, 2015, increasing $26.2 million, or 1%, year-over-year. The increase was driven by Och-Ziff Real Estate Credit Fund I and Och-Ziff Real Estate Fund III, partially offset by distributions and other reductions from Och-Ziff Real Estate Funds I and II. Since inception, the net IRR for Och-Ziff Real Estate Fund II (for which the investment period ended in 2014) was 22.6% through December 31, 2015. Since inception, the net IRR for Och-Ziff Real Estate Fund I (for which the investment period ended in 2010) was 15.6% through December 31, 2015.

ECONOMIC INCOME (NON-GAAP)

In addition to analyzing the Company's results on a GAAP basis, management also reviews the Company's results on an "Economic Income" basis. Economic Income excludes certain adjustments that are required for presentation of the Company's results on a GAAP basis, but that management does not consider when evaluating operating performance in any given period.

For reconciliations of Economic Income and its components to the respective GAAP measures, please see Exhibits 2 through 5 that accompany this press release. Additionally, please see the discussion of "Non-GAAP Financial Measures" at the end of this press release.

Economic Income Revenues (Non-GAAP)

Economic Income revenues for the 2015 fourth quarter were $218.4 million, a 63% decrease from $592.4 million for the 2014 fourth quarter. Management fees were $148.6 million, 11% lower than $166.7 million for the prior-year period. Incentive income was $69.2 million, 84% lower than the $425.3 million for the prior-year period.

Economic Income revenues for the 2015 full year were $849.3 million, a 30% decrease from $1.2 billion for the 2014 full year. Management fees were $642.2 million, essentially unchanged from $649.3 million for the prior-year period. Incentive income was $205.0 million, 63% lower than the $559.2 million for the prior-year period.

The year-over-year decrease in management fees for both the quarter-to-date and year-to-date period was driven primarily by lower assets under management in the Company's multi-strategy funds, partially offset by higher assets under management in the Company's ICS products. This change in mix resulted in a lower year-over-year average management fee rate for both periods. The year-over-year decrease in incentive income for both the quarter-to-date and year-to-date period was driven primarily by lower returns across many of the Company's funds.

The average management fee rate was 1.34% for the 2015 fourth quarter and 1.39% for the 2015 full year. The Company's average management fee will vary from quarter to quarter based on the mix of products that comprise its assets under management.

Compensation and Benefits (Non-GAAP)

Compensation and benefits for the 2015 fourth quarter totaled $200.3 million, down 22% from $257.2 million for the 2014 fourth quarter. Salaries and benefits were $29.4 million, 9% higher than $26.8 million in the prior-year period. Bonus expense for the 2015 fourth quarter totaled $170.9 million, 26% lower than $230.4 million for the prior-year period.

Compensation and benefits for the 2015 full year totaled $302.7 million, a 16% decrease from $358.6 million for the 2014 full year. Salaries and benefits were $113.7 million, 10% higher than $103.7 million in the prior-year period. Bonus expense for the 2015 full year totaled $189.0 million, 26% lower than $254.9 million for the prior-year period.

The year-over-year increases in salaries and benefits were driven primarily by an increase in the Company's headcount. Bonus expense declined as a result of lower incentive income. The ratio of salaries and benefits to management fees was 20% for the 2015 fourth quarter and 18% for the 2015 full year, compared to 16% for the 2014 fourth quarter and 16% for the 2014 full year. These increases were the result of lower year-over-year management fees in both periods, as well as higher expense levels. The ratio of cash bonus expense to total Economic Income revenues was 22% for the 2015 full year, compared to 21% for the 2014 full year.

Non-Compensation Expenses (Non-GAAP)

Non-compensation expenses for the 2015 fourth quarter totaled $55.6 million, up 59% from $35.0 million in the prior-year period. Non-compensation expenses for the 2015 full year totaled $201.4 million, up 60% from $126.1 million in the prior-year period. The year-over-year increases were primarily driven by higher professional fees due to increased legal expenses relating to certain regulatory and legal matters, as well as higher interest expense due to the issuance of the Company's Senior Notes in the 2014 fourth quarter.

The ratio of non-compensation expenses to management fees was 37% for the 2015 fourth quarter and 31% for the 2015 full year, respectively, compared to 21% for 2014 fourth quarter and 19% for the 2014 full year.

Economic Income (Non-GAAP)

Economic Income for the 2015 fourth quarter was a loss of $37.6 million, compared to profit of $300.2 million for the 2014 fourth quarter. Economic Income for the full year of 2015 was $345.2 million, lower than the $729.9 million for the full year of 2014.

The year-over-year decrease in Economic Income for both the quarter-to-date and year-to-date periods was primarily due to lower incentive income and higher non-compensation expenses, partially offset by lower bonus expenses.

CAPITAL

As of December 31, 2015, the number of Class A Shares outstanding was 181,026,455. For purposes of calculating Distributable Earnings per Share, the Company assumes that all the interests held by its executive managing directors and Ziff Investors Partnership, L.P. II and certain of its affiliates and control persons (the "Ziffs") (until the Ziffs exchanged their remaining interests during the 2014 second quarter) in the Company's principal operating subsidiaries (the "Och-Ziff Operating Group") (collectively, "Partner Units"), as well as Class A Restricted Share Units ("RSUs") outstanding during the applicable period, have been converted on a one-to-one basis into Class A Shares ("Adjusted Class A Shares"). For the fourth quarter and the full year ended December 31, 2015, the total weighted-average Adjusted Class A Shares outstanding were 513,870,889 and 515,541,881, respectively.

DIVIDEND

The Board of Directors of Och-Ziff did not declare a 2015 fourth-quarter dividend on the Company's Class A Shares.

Dan Och, Chairman and Chief Executive Officer of Och-Ziff, and Joel Frank, Chief Financial Officer, will host a conference call today, February 11, 2016, at 8:30 a.m. Eastern Time to discuss the Company's 2015 fourth quarter and full year results. The call can be accessed by dialing +1-888-680-0890 (in the U.S.) or +1-617-213-4857 (international), passcode 39236948. A simultaneous webcast of the call will be available on the Public Investors page of the Company's website (www.ozcap.com).

For those unable to listen to the live broadcast, a replay will be available shortly after the call by dialing +1-888-286-8010 (in the U.S.) or +1-617-801-6888 (international), passcode 16043837. A webcast replay will also be available on the Company's website as noted above.

Non-GAAP Financial Measures

Management evaluates Economic Income for the Och-Ziff Funds segment, the Company's only reportable operating segment under GAAP, and for the Company's Other Operations. Economic Income for the Company equals the sum of Economic Income for the Och-Ziff Funds segment and the Company's Other Operations.

The Company conducts substantially all of its business through the Och-Ziff Funds segment, which provides asset management services to its multi-strategy, opportunistic credit and equity funds, Institutional Credit Strategies and other alternative investment vehicles. The Company's Other Operations are primarily comprised of its real estate business, which provides asset management services to its real estate funds.

The Company's non-GAAP measures should not be considered as alternatives to the Company's GAAP Net Income or cash flow from operations, or as indicative of liquidity or the cash available to fund operations. The Company's non-GAAP measures may not be comparable to similarly titled measures used by other companies.

For reconciliations of the Company's non-GAAP measures to the most directly comparable GAAP measures, please see Exhibits 2 and 3 that accompany this press release.

Economic Income

In addition to analyzing the Company's results on a GAAP basis, management also reviews the Company's results on an "Economic Income" basis. Economic Income excludes the adjustments described below that are required for presentation of the Company's results on a GAAP basis, but that management does not consider when evaluating the operating performance of the Company in any given period. Management uses Economic Income as the basis on which it evaluates the financial performance of the Company and makes resource allocation and other operating decisions. Management considers it important that investors review the same operating information that it uses.

Economic Income is a measure of pre-tax operating performance that excludes the following from the Company's results on a GAAP basis:

  • Income allocations to the Company's executive managing directors and the Ziffs (until they exchanged their remaining interests during the 2014 second quarter) on their direct interests in the Och-Ziff Operating Group. Management reviews operating performance at the Och-Ziff Operating
    Group level, where substantially all of the Company's operations are performed, prior to making any income allocations.
  • Reorganization expenses related to the Company's IPO, equity-based compensation expenses and depreciation and amortization expenses, as management does not consider these non-cash expenses 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 net gains (losses) on investments in Och-Ziff funds, as management does not consider these items to be reflective of operating performance.
  • Amounts related to the consolidated Och-Ziff 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.

The Company also defers the recognition of incentive income allocations from the consolidated Och-Ziff funds until all clawback contingencies are resolved, consistent with the revenue recognition policy for the funds the Company does not consolidate.

In addition, expenses related to compensation and profit-sharing arrangements based on fund investment performance are recognized at the end of the relevant commitment period, as management reviews the total compensation expense related to these arrangements in relation to any incentive income earned by the relevant fund.

As a result of the adjustments described above, as well as an adjustment to present management fees net of recurring placement and related service fees (rather than considering these fees an expense), management fees, incentive income, compensation and benefits, non-compensation expenses and net income allocated to noncontrolling interests as presented on an Economic Income basis are also non-GAAP measures.

Distributable Earnings

Distributable Earnings is a non-GAAP measure of after-tax operating performance and equals Economic Income less Adjusted Income Taxes. Adjusted Income Taxes are estimated assuming the conversion of all outstanding Partner Units into Class A Shares, on a one-to-one basis, and include the impact of payments under the tax receivable agreement. Therefore, all income (loss) of the Och-Ziff Operating Group allocated to the Partner Units is treated as if it were allocated to Och-Ziff Capital Management Group LLC. Partner Units represent interests in the Och-Ziff Operating Group held by the Company's executive managing directors and the Ziffs (until they exchanged their remaining interests during the 2014 second quarter), including the Och-Ziff Operating Group A Units and Och-Ziff Operating Group D Units. Distributable Earnings per Share is equal to Distributable Earnings divided by the weighted-average number of Adjusted Class A Shares.

Management believes Distributable Earnings provides useful information to investors because it uses Distributable Earnings, among other financial information, to determine the earnings available to distribute as dividends to holders of the Company's Class A Shares and to the Company's executive managing directors with respect to their Partner Units.

Forward-Looking Statements

This press release may contain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, that reflect the Company's current views with respect to, among other things, future events and financial performance. The Company generally identifies forward-looking statements by terminology such as "outlook," "believe," "expect," "potential," "continue," "may," "will," "should," "could," "seek," "approximately," "predict," "intend," "plan," "estimate," "anticipate," "opportunity," "comfortable," "assume," "remain," "maintain," "sustain," "achieve," "see," "think," "position" or the negative version of those words or other comparable words.

Any forward-looking statements contained in this press release are based upon historical information and on the Company's current plans, estimates and expectations. The inclusion of this or other forward-looking information should not be regarded as a representation by the Company or any other person that the future plans, estimates or expectations contemplated by the Company will be achieved. We caution that forward-looking statements are subject to numerous assumptions, estimates, risks and uncertainties, including but not limited to the following: global economic, business, market and geopolitical conditions; U.S. and foreign regulatory developments relating to, among other things, financial institutions and markets, government oversight, fiscal and tax policy; conditions impacting the alternative asset management industry; the Company's ability to successfully compete for fund investors, assets, professional talent and investment opportunities; the Company's ability to retain its active executive managing directors, managing directors and other investment professionals; the Company's successful formulation and execution of its business and growth strategies; the Company's ability to appropriately manage conflicts of interest and tax and other regulatory factors relevant to its business; and assumptions relating to the Company's operations, investment performance, financial results, financial condition, business prospects, growth strategy and liquidity.

If one or more of these or other risks or uncertainties materialize, or if the Company's assumptions or estimates prove to be incorrect, its actual results may vary materially from those indicated in these statements. These factors are not and should not be construed as exhaustive and should be read in conjunction with the other cautionary statements and risks that are included in the Company's filings with the U.S. Securities and Exchange Commission ("SEC"), including but not limited to the Company's annual report on Form 10-K for the year ended December 31, 2014, dated February 23, 2015, and in the Company's quarterly report on Form 10-Q for the quarter ended March 31, 2015, dated May 5, 2015, as well as may be updated from time to time in the Company's other SEC filings. There may be additional risks, uncertainties and factors that the Company does not currently view as material or that are not known. The forward-looking statements contained in this press release are made only as of the date of this press release. The Company does not undertake to update any forward-looking statement because of new information, future developments or otherwise.

This press release does not constitute an offer of any Och-Ziff fund.

About Och-Ziff Capital Management Group LLC    

Och-Ziff Capital Management Group LLC is one of the largest institutional alternative asset managers in the world, with offices in New York, London, Hong Kong, Mumbai, Beijing, Dubai, Shanghai and Houston. Och-Ziff provides asset management services to investors globally through its multi-strategy funds, dedicated credit funds, including opportunistic credit funds and Institutional Credit Strategies products, real estate funds and other alternative investment vehicles. Och-Ziff seeks to generate consistent, positive, absolute returns across market cycles, with low volatility compared to the broader markets, and with an emphasis on preservation of capital. Och-Ziff 's funds invest across multiple strategies and geographies, consistent with the investment objectives for each fund. The global investment strategies Och-Ziff employs include convertible and derivative arbitrage, corporate credit, long/short equity special situations, merger arbitrage, private investments, real estate and structured credit. As of February 1, 2016, Och-Ziff had approximately $43.7 billion in assets under management. For more information, please visit Och-Ziff 's website (www.ozcap.com).

 
EXHIBIT 1
OCH-ZIFF CAPITAL MANAGEMENT GROUP LLC
Consolidated Statements of Comprehensive Income (Loss) (Unaudited)
(dollars in thousands, except per share amounts)
 
    Three Months Ended December 31,   Year Ended December 31,
    2015     2014   2015     2014
Revenues                            
  Management fees   $ 147,784     $ 169,514   $ 643,991     $ 664,221
  Incentive income     66,301       416,239     187,563       507,261
  Other revenues     529       372     2,077       1,303
  Income of consolidated Och-Ziff funds     128,214       101,525     489,350       369,499
  Total Revenues     342,828       687,650     1,322,981       1,542,284
                             
Expenses                            
  Compensation and benefits     218,631       286,048     430,526       492,712
  Reorganization expenses     2,012       4,018     14,064       16,083
  Interest expense     5,408       3,119     21,441       8,166
  General, administrative and other     56,807       30,497     184,139       132,800
  Expenses of consolidated Och-Ziff funds     82,923       58,673     303,770       185,888
  Total Expenses     365,781       382,355     953,940       835,649
                             
Other Income (Loss)                            
  Net gains on investments in Och-Ziff funds and joint ventures    
25
     
50
   
68
     
5,999
  Net gains (losses) of consolidated Och-Ziff funds     (91,431 )     22,228     (69,572 )     137,726
  Total Other Income (Loss)     (91,406 )     22,278     (69,504 )     143,725
                             
Income (Loss) Before Income Taxes     (114,359 )     327,573     299,537       850,360
  Income taxes     12,617       48,019     132,224       139,048
Consolidated and Comprehensive Net Income (Loss)   $ (126,976 )   $ 279,554   $ 167,313     $ 711,312
                             
Allocation of Consolidated and Comprehensive Net  Income (Loss)                            
  Class A Shareholders   $ (22,308 )   $ 84,675   $ 25,740     $ 142,445
  Noncontrolling interests     (79,169 )     191,392     191,177       535,288
  Redeemable noncontrolling interests     (25,499 )     3,487     (49,604 )     33,579
    $ (126,976 )   $ 279,554   $ 167,313     $ 711,312
                             
Earnings (Loss) Per Class A Share                            
  Basic   $ (0.12 )   $ 0.49   $ 0.14     $ 0.82
  Diluted   $ (0.12 )   $ 0.47   $ 0.14     $ 0.80
                             
Weighted-Average Class A Shares Outstanding                            
  Basic     178,601,584       173,740,719     177,935,977       172,843,926
  Diluted     178,601,584       179,862,242     180,893,947       178,179,112
                             
 
EXHIBIT 2
OCH-ZIFF CAPITAL MANAGEMENT GROUP LLC
Reconciliation of Non-GAAP Measures to the Respective GAAP Measures (Unaudited)
(dollars in thousands, except per share amounts)
 
    Three Months Ended December 31, 2015  
    Och-Ziff
Funds Segment
    Other
Operations
    Total
Company
 
Net income (loss) allocated to Class A Shareholders-GAAP   $ (18,462 )   $ (3,846 )   $ (22,308 )
Net income (loss) allocated to the Och-Ziff Operating Group A Units     (38,790 )     -       (38,790 )
Equity-based compensation, net of RSUs settled in cash     19,386       589       19,975  
Income taxes     12,617       -       12,617  
Adjustment for incentive income allocations from consolidated funds subject to clawback    
1,349
     
(5,764
)    
(4,415
)
Allocations to Och-Ziff Operating Group D Units     (2,021 )     -       (2,021 )
Adjustment for expenses related to compensation and profit-sharing arrangements based on fund investment performance    

-
     

1,205
     

1,205
 
Reorganization expenses     2,012       -       2,012  
Changes in tax receivable agreement liability     (7,959 )     -       (7,959 )
Depreciation and amortization     3,008       188       3,196  
Other adjustments     (937 )     (132 )     (1,069 )
Economic Income-Non-GAAP   $ (29,797 )   $ (7,760 )     (37,557 )
Adjusted Income Taxes-Non-GAAP(1)                     1,419  
Distributable Earnings-Non-GAAP                   $ (36,138 )
                         
Weighted-Average Class A Shares Outstanding                     178,601,584  
Weighted-Average Partner Units                     321,321,750  
Weighted-Average Class A Restricted Share Units (RSUs)                     13,947,555  
Weighted-Average Adjusted Class A Shares                     513,870,889  
                         
Distributable Earnings Per Adjusted Class A Share-Non-GAAP                   $ (0.07 )
                         
   
    Three Months Ended December 31, 2014  
    Och-Ziff 
Funds Segment
    Other 
Operations
    Total 
Company
 
Net income (loss) allocated to Class A Shareholders-GAAP   $ 59,480     $ 25,195     $ 84,675  
Net income (loss) allocated to the Och-Ziff Operating Group A Units     185,285       -       185,285  
Equity-based compensation, net of RSUs settled in cash     18,966       771       19,737  
Income taxes     48,019       -       48,019  
Adjustment for incentive income allocations from consolidated funds subject to clawback    
(705
)    
(35,644
)    
(36,349
)
Allocations to Och-Ziff Operating Group D Units     10,942       1,650       12,592  
Adjustment for expenses related to compensation and profit-sharing arrangements based on fund investment performance    

(7,202
)    

3,700
     

(3,502
)
Reorganization expenses     4,018       -       4,018  
Changes in tax receivable agreement liability     (15,911 )     -       (15,911 )
Depreciation and amortization     1,562       190       1,752  
Other adjustments     (78 )     (78 )     (156 )
Economic Income-Non-GAAP   $ 304,376     $ (4,216 )     300,160  
Adjusted Income Taxes-Non-GAAP(1)                     (44,749 )
Distributable Earnings-Non-GAAP                   $ 255,411  
                         
Weighted-Average Class A Shares Outstanding                     173,740,719  
Weighted-Average Partner Units                     320,911,117  
Weighted-Average Class A Restricted Share Units (RSUs)                     15,905,081  
Weighted-Average Adjusted Class A Shares                     510,556,917  
                         
Distributable Earnings Per Adjusted Class A Share-Non-GAAP                   $ 0.50  
   
(1) Presents an estimate of income tax expense (benefit) by assuming the conversion of all Partner Units into Class A Shares, on a one-to-one basis, as well as the impact of payments under the tax receivable agreement. Therefore, all income (loss) of the Och-Ziff Operating Group allocated to the Partner Units is treated as if it were allocated to Och-Ziff Capital Management Group LLC.
   
 
EXHIBIT 3
OCH-ZIFF CAPITAL MANAGEMENT GROUP LLC
Reconciliation of Non-GAAP Measures to the Respective GAAP Measures (Unaudited)
(dollars in thousands, except per share amounts)
 
    Year Ended December 31, 2015  
    Och-Ziff
Funds Segment
    Other
Operations
    Total
Company
 
Net income (loss) allocated to Class A Shareholders-GAAP   $ (13,688 )   $ 39,428     $ 25,740  
Net income allocated to the Och-Ziff Operating Group A Units     136,449       -       136,449  
Equity-based compensation, net of RSUs settled in cash     103,643       2,922       106,565  
Income taxes     132,224       -       132,224  
Adjustment for incentive income allocations from consolidated funds subject to clawback     1,165       (46,242 )     (45,077 )
Allocations to Och-Ziff Operating Group D Units     11,974       701       12,675  
Adjustment for expenses related to compensation and profit-sharing arrangements based on fund investment performance     -       8,612       8,612  
Reorganization expenses     14,064       -       14,064  
Changes in tax receivable agreement liability     (55,852 )     -       (55,852 )
Depreciation and amortization     10,583       748       11,331  
Other adjustments     (405 )     (1,110 )     (1,515 )
Economic Income-Non-GAAP   $ 340,157     $ 5,059       345,216  
Adjusted Income Taxes-Non-GAAP(1)                     (93,335 )
Distributable Earnings-Non-GAAP                   $ 251,881  
                         
Weighted-Average Class A Shares Outstanding                     177,935,977  
Weighted-Average Partner Units                     323,699,605  
Weighted-Average Class A Restricted Share Units (RSUs)                     13,906,299  
Weighted-Average Adjusted Class A Shares                     515,541,881  
                         
Distributable Earnings Per Adjusted Class A Share-Non-GAAP                   $ 0.49  
                         
   
    Year Ended December 31, 2014  
    Och-Ziff 
Funds Segment
    Other 
Operations
    Total 
Company
 
Net income (loss) allocated to Class A Shareholders-GAAP   $ 115,698     $ 26,747     $ 142,445  
Net income allocated to the Och-Ziff Operating Group A Units     365,793       -       365,793  
Equity-based compensation, net of RSUs settled in cash     102,505       1,829       104,334  
Income taxes     138,938       110       139,048  
Adjustment for incentive income allocations from consolidated funds subject to clawback     (21,099 )     (11,638 )     (32,737 )
Allocations to Och-Ziff Operating Group D Units     25,360       1,650       27,010  
Adjustment for expenses related to compensation and profit-sharing arrangements based on fund investment performance     -       2,816       2,816  
Reorganization expenses     16,083       -       16,083  
Changes in tax receivable agreement liability     (40,383 )     -       (40,383 )
Depreciation and amortization     6,242       748       6,990  
Other adjustments     (1,137 )     (319 )     (1,456 )
Economic Income-Non-GAAP   $ 708,000     $ 21,943       729,943  
Adjusted Income Taxes-Non-GAAP(1)                     (139,599 )
Distributable Earnings-Non-GAAP                   $ 590,344  
                         
Weighted-Average Class A Shares Outstanding                     172,843,926  
Weighted-Average Partner Units                     320,831,550  
Weighted-Average Class A Restricted Share Units (RSUs)                     14,865,078  
Weighted-Average Adjusted Class A Shares                     508,540,554  
                         
Distributable Earnings Per Adjusted Class A Share-Non-GAAP                   $ 1.16  
   
(1) Presents an estimate of income tax expense (benefit) by assuming the conversion of all Partner Units into Class A Shares, on a one-to-one basis, as well as the impact of payments under the tax receivable agreement. Therefore, all income (loss) of the Och-Ziff Operating Group allocated to the Partner Units is treated as if it were allocated to Och-Ziff Capital Management Group LLC.
   
   
EXHIBIT 4  
OCH-ZIFF CAPITAL MANAGEMENT GROUP LLC  
Components of Economic Income and Reconciliation of These Non-GAAP Measures to the Respective GAAP Measures (Unaudited)  
(dollars in thousands)  
       
    Three Months Ended December 31, 2015  
    Och-Ziff
Funds Segment
   
Other Operations
    Total
Company
 
Management fees-GAAP   $ 142,620     $ 5,164     $ 147,784  
Adjustment to management fees(1)     848       -       848  
Management Fees-Economic Income Basis-Non-GAAP     143,468       5,164       148,632  
                         
Incentive income-GAAP     66,301       -       66,301  
Adjustment to incentive income(2)     1,522       1,416       2,938  
Incentive Income-Economic Income Basis-Non-GAAP     67,823       1,416       69,239  
Other revenues     522       7       529  
Total Revenues-Economic Income Basis-Non-GAAP   $ 211,813     $ 6,587     $ 218,400  
                         
Compensation and benefits-GAAP   $ 203,084     $ 15,547     $ 218,631  
Adjustment to compensation and benefits(3)     (16,506 )     (1,795 )     (18,301 )
Compensation and Benefits-Economic Income Basis-Non-GAAP   $ 186,578     $ 13,752     $ 200,330  
                         
Interest expense and general, administrative and other expenses-GAAP   $ 61,432     $ 783     $ 62,215  
Adjustment to interest expense and general, administrative and other expenses(4)     (6,398 )     (188 )     (6,586 )
Non-Compensation Expenses-Economic Income Basis-Non-GAAP   $ 55,034     $ 595     $ 55,629  
                         
Net gains (losses) on investments in Och-Ziff funds and joint ventures-GAAP   $ 25     $
    $ 25  
Adjustment to net gains on investments in Och-Ziff funds and joint ventures(5)     (25 )     -       (25 )
Net Gains on Joint Ventures-GAAP   $ -     $ -     $ -  
                         
Net income allocated to noncontrolling interests-GAAP   $ (105,506 )   $ 26,337     $ (79,169 )
Adjustment to net income allocated to noncontrolling interests(6)     105,504       (26,337 )     79,167  
Net Loss Allocated to Noncontrolling Interests-Economic Income Basis-Non-GAAP   $ (2 )   $ -     $ (2 )
                         
         
    Three Months Ended December 31, 2014  
    Och-Ziff
Funds Segment
   
Other Operations
    Total
Company
 
Management fees-GAAP   $ 164,549     $ 4,965     $ 169,514  
Adjustment to management fees(1)     (2,782 )     -       (2,782 )
Management Fees-Economic Income Basis-Non-GAAP     161,767       4,965       166,732  
                         
Incentive income-GAAP     416,239       -       416,239  
Adjustment to incentive income(2)     7,161       1,917       9,078  
Incentive Income-Economic Income Basis-Non-GAAP     423,400       1,917       425,317  
Other revenues     365       7       372  
Total Revenues-Economic Income Basis-Non-GAAP   $ 585,532     $ 6,889     $ 592,421  
                         
Compensation and benefits-GAAP   $ 269,349     $ 16,699     $ 286,048  
Adjustment to compensation and benefits(3)     (22,707 )     (6,120 )     (28,827 )
Compensation and Benefits-Economic Income Basis-Non-GAAP   $ 246,642     $ 10,579     $ 257,221  
                         
Interest expense and general, administrative and other expenses-GAAP   $ 32,902     $ 714     $ 33,616  
Adjustment to interest expense and general, administrative and other expenses(4)     1,614       (188 )     1,426  
Non-Compensation Expenses-Economic Income Basis-Non-GAAP   $ 34,516     $ 526     $ 35,042  
                         
Net gains (losses) on investments in Och-Ziff funds and joint ventures-GAAP   $ 50     $ -     $ 50  
Adjustment to net gains on investments in Och-Ziff funds and joint ventures(5)     (50 )     -       (50 )
Net Gains on Joint Ventures-GAAP   $ -     $ -     $ -  
                         
Net income allocated to noncontrolling interests-GAAP   $ 197,611     $ (6,219 )   $ 191,392  
Adjustment to net income allocated to noncontrolling interests(6)     (197,613 )     6,219       (191,394 )
Net Loss Allocated to Noncontrolling Interests-Economic Income Basis-Non-GAAP   $ (2 )   $ -     $ (2 )
                         
(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 Och-Ziff funds is also removed.
(2) Adjustment to exclude the impact of eliminations related to the consolidated Och-Ziff funds.
(3) Adjustment to exclude equity-based compensation, as management does not consider these non-cash expenses to be reflective of the operating performance of the Company. 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 recognized at the end of the relevant commitment period, 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 Och-Ziff Operating Group D Units are also excluded, as management reviews operating performance at the Och-Ziff Operating Group level, where substantially all of the Company's operations are performed, prior to making any income allocations.
(4) Adjustment to exclude depreciation, amortization and changes in the tax receivable agreement liability, as management does not consider these items to be reflective of the operating performance of the Company. Additionally, recurring placement and related service fees are excluded, as management considers these fees a reduction in management fees, not an expense.
(5) Adjustment to exclude net gains on investments in Och-Ziff funds, as management does not consider these gains to be reflective of the operating performance of the Company.
(6) Adjustment to exclude amounts allocated to the executive managing directors on their interests in the Och-Ziff Operating Group, as management reviews the operating performance of the Company at the Och-Ziff Operating Group level. The Company conducts substantially all of its activities through the Och-Ziff Operating Group. Additionally, the impact of the consolidated Och-Ziff funds, including the allocation of earnings to investors in those funds, is also removed.
   
   
EXHIBIT 5  
OCH-ZIFF CAPITAL MANAGEMENT GROUP LLC  
Components of Economic Income and Reconciliation of These Non-GAAP Measures to the Respective GAAP Measures (Unaudited)  
(dollars in thousands)  
             
    Year Ended December 31, 2015  
    Och-Ziff
Funds Segment
   
Other Operations
    Total
Company
 
Management fees-GAAP   $ 623,869     $ 20,122     $ 643,991  
Adjustment to management fees(1)     (1,804 )     -       (1,804 )
Management Fees-Economic Income Basis-Non-GAAP     622,065       20,122       642,187  
                         
Incentive income-GAAP     187,563       -       187,563  
Adjustment to incentive income(2)     10,232       7,217       17,449  
Incentive Income-Economic Income Basis-Non-GAAP     197,795       7,217       205,012  
Other revenues     2,045       32       2,077  
Total Revenues-Economic Income Basis-Non-GAAP   $ 821,905     $ 27,371     $ 849,276  
                         
Compensation and benefits-GAAP   $ 398,015     $ 32,511     $ 430,526  
Adjustment to compensation and benefits(3)     (115,617 )     (12,235 )     (127,852 )
Compensation and Benefits-Economic Income Basis-Non-GAAP   $ 282,398     $ 20,276     $ 302,674  
                         
Interest expense and general, administrative and other expenses-GAAP   $ 202,795     $ 2,785     $ 205,580  
Adjustment to interest expense and general, administrative and other expenses(4)     (3,433 )     (749 )     (4,182 )
Non-Compensation Expenses-Economic Income Basis-Non-GAAP   $ 199,362     $ 2,036     $ 201,398  
                         
Net gains on investments in Och-Ziff funds and joint ventures-GAAP   $ 66     $ 2     $ 68  
Adjustment to net gains on investments in Och-Ziff funds and joint ventures(5)     (66 )     (2 )     (68 )
Net Gains on Joint Ventures-GAAP   $ -     $ -     $ -  
                         
Net income allocated to noncontrolling interests-GAAP   $ 89,057     $ 102,120     $ 191,177  
Adjustment to net income allocated to noncontrolling interests(6)     (89,069 )     (102,120 )     (191,189 )
Net Loss Allocated to Noncontrolling Interests-Economic Income Basis-Non-GAAP   $ (12 )   $ -     $ (12 )
                         
                 
    Year Ended December 31, 2014  
    Och-Ziff
Funds Segment
   
Other Operations
    Total
Company
 
Management fees-GAAP   $ 648,945     $ 15,276     $ 664,221  
Adjustment to management fees(1)     (14,938 )     -       (14,938 )
Management Fees-Economic Income Basis-Non-GAAP     634,007       15,276       649,283  
                         
Incentive income-GAAP     507,261       -       507,261  
Adjustment to incentive income(2)     20,637       31,272       51,909  
Incentive Income-Economic Income Basis-Non-GAAP     527,898       31,272       559,170  
Other revenues     1,275       28       1,303  
Total Revenues-Economic Income Basis-Non-GAAP   $ 1,163,180     $ 46,576     $ 1,209,756  
                         
Compensation and benefits-GAAP   $ 463,963     $ 28,749     $ 492,712  
Adjustment to compensation and benefits(3)     (127,866 )     (6,294 )     (134,160 )
Compensation and Benefits-Economic Income Basis-Non-GAAP   $ 336,097     $ 22,455     $ 358,552  
                         
Interest expense and general, administrative and other expenses-GAAP   $ 138,040     $ 2,926     $ 140,966  
Adjustment to interest expense and general, administrative and other expenses(4)     (14,075 )     (748 )     (14,823 )
Non-Compensation Expenses-Economic Income Basis-Non-GAAP   $ 123,965     $ 2,178     $ 126,143  
                         
Net gains on investments in Och-Ziff funds and joint ventures-GAAP   $ 5,999     $ -     $ 5,999  
Adjustment to net gains on investments in Och-Ziff funds and joint ventures(5)     (1,125 )     -       (1,125 )
Net Gains on Joint Ventures-GAAP   $ 4,874     $ -     $ 4,874  
                         
Net income allocated to noncontrolling interests-GAAP   $ 433,528     $ 101,760     $ 535,288  
Adjustment to net income allocated to noncontrolling interests(6)     (433,536 )     (101,760 )     (535,296 )
Net Loss Allocated to Noncontrolling Interests-Economic Income Basis-Non-GAAP   $ (8 )   $ -     $ (8 )
                         
(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 Och-Ziff funds is also removed.
(2) Adjustment to exclude the impact of eliminations related to the consolidated Och-Ziff funds.
(3) Adjustment to exclude equity-based compensation, as management does not consider these non-cash expenses to be reflective of the operating performance of the Company. 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 recognized at the end of the relevant commitment period, 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 Och-Ziff Operating Group D Units are also excluded, as management reviews operating performance at the Och-Ziff Operating Group level, where substantially all of the Company's operations are performed, prior to making any income allocations.
(4) Adjustment to exclude depreciation, amortization and changes in the tax receivable agreement liability, as management does not consider these items to be reflective of the operating performance of the Company. Additionally, recurring placement and related service fees are excluded, as management considers these fees a reduction in management fees, not an expense.
(5) Adjustment to exclude net gains on investments in Och-Ziff funds, as management does not consider these gains to be reflective of the operating performance of the Company.
(6) Adjustment to exclude amounts allocated to the executive managing directors and the Ziffs (until they exchanged their remaining interests during the 2014 second quarter) on their interests in the Och-Ziff Operating Group, as management reviews the operating performance of the Company at the Och-Ziff Operating Group level. The Company conducts substantially all of its activities through the Och-Ziff Operating Group. Additionally, the impact of the consolidated Och-Ziff funds, including the allocation of earnings to investors in those funds, is also removed.
   
 
EXHIBIT 6
OCH-ZIFF CAPITAL MANAGEMENT GROUP LLC
Summary Of Changes In Assets Under Management(1) (Unaudited)
(dollars in thousands)
       
    Year Ended December 31, 2015  
   
December 31, 2014
   
Inflows / (Outflows)
    Distributions /
Other Reductions
 
Multi-strategy funds   $ 34,100,390     $ (4,719,269 )   $ -  
Credit                        
  Opportunistic credit funds     5,098,600       1,121,104       (727,190 )
  Institutional Credit Strategies     5,166,734       2,077,404       -  
Real estate funds     2,022,399       197,887       (165,587 )
Other     1,146,292       146,439       (15,102 )
Total   $ 47,534,415     $ (1,176,435 )   $ (907,879 )
   
           
    Year Ended December 31, 2015        
    Appreciation /
(Depreciation) (2)
   
December 31, 2015
       
Multi-strategy funds   $ 129,127     $ 29,510,248          
Credit                        
  Opportunistic credit funds     (108,885 )     5,383,629          
  Institutional Credit Strategies     (2,458 )     7,241,680          
Real estate funds     (6,140 )     2,048,559          
Other     33,116       1,310,745          
Total   $ 44,760     $ 45,494,861          
           
                         
    Year Ended December 31, 2014  
    December 31, 2013     Inflows / (Outflows)     Distributions / Other Reductions  
Multi-strategy funds   $ 31,768,578     $ 828,131     $ -  
Credit                        
  Opportunistic credit funds     4,305,438       749,093       (501,935 )
  Institutional Credit Strategies     2,605,628       2,553,940       -  
Real estate funds     970,568       1,475,219       (414,234 )
Other     588,600       528,362       (27,828 )
Total   $ 40,238,812     $ 6,134,745     $ (943,997 )
                         
                         
    Year Ended December 31, 2014        
    Appreciation /
(Depreciation) (2)
   
December 31, 2014
       
Multi-strategy funds   $ 1,503,681     $ 34,100,390          
Credit                        
  Opportunistic credit funds     546,004       5,098,600          
  Institutional Credit Strategies     7,166       5,166,734          
Real estate funds     (9,154 )     2,022,399          
Other     57,158       1,146,292          
Total   $ 2,104,855     $ 47,534,415          
                         
                         
    Year Ended December 31, 2013  
   
December 31, 2012
   
Inflows / (Outflows)
    Distributions /
Other Reductions
 
Multi-strategy funds   $ 27,846,914     $ (92,303 )   $ -  
Credit                        
  Opportunistic credit funds     2,312,220       1,709,239       (197,926 )
  Institutional Credit Strategies     985,934       1,628,237       -  
Real estate funds     980,781       76,444       (79,185 )
Other     478,081       59,005       -  
Total   $ 32,603,930     $ 3,380,622     $ (277,111 )
                         
                         
   
Year Ended December 31, 2013
       
    Appreciation /
(Depreciation) (2)
   
December 31, 2013
       
Multi-strategy funds   $ 4,013,967     $ 31,768,578          
Credit                        
  Opportunistic credit funds     481,905       4,305,438          
  Institutional Credit Strategies     (8,543 )     2,605,628          
Real estate funds     (7,472 )     970,568          
Other     51,514       588,600          
Total   $ 4,531,371     $ 40,238,812          
                         
(1) Includes amounts invested by the Company, its executive managing directors, employees and certain other related parties for which the Company charged no management fees and received no incentive income for the periods presented. Amounts presented in this table are not the amounts used to calculate management fees and incentive income for the respective periods.
(2) Appreciation (depreciation) reflects the aggregate net capital appreciation (depreciation) for the entire period and is presented on a total return basis, net of all fees and expenses (except incentive income on unrealized gains attributable to investments in certain funds that the Company, as investment manager, determines lack a readily ascertainable fair value, are illiquid or otherwise should be held until the resolution of a special event or circumstance that could reduce returns on these investments at the time of realization), and includes the reinvestment of all dividends and other income. Management fees and incentive income vary by product.
   
 
EXHIBIT 7
OCH-ZIFF CAPITAL MANAGEMENT GROUP LLC
Fund Information(1) (Unaudited)
(dollars in thousands)
 
    Assets Under Management as of December 31,
             
    2015   2014   2013
Multi-strategy funds                  
  OZ Master Fund(2)   $ 24,297,106   $ 27,884,293   $ 25,210,607
  OZ Asia Master Fund     1,200,213     1,337,913     1,341,550
  OZ Europe Master Fund     899,388     1,238,706     1,437,271
  OZ Enhanced Master Fund     1,130,747     1,135,868     662,898
  Och-Ziff European Multi-Strategy UCITS Fund     317,511     346,004     418,568
  Other funds     1,665,283     2,157,606     2,697,684
      29,510,248     34,100,390     31,768,578
Credit                  
Opportunistic credit funds:                  
  OZ Credit Opportunities Master Fund     1,486,241     1,206,009     504,603
  Customized Credit Focused Platform     2,460,716     1,773,592     1,533,062
  Closed-end opportunistic credit funds     919,786     1,616,377     1,865,632
  Other funds     516,886     502,622     402,141
      5,383,629     5,098,600     4,305,438
Institutional Credit Strategies     7,241,680     5,166,734     2,605,628
      12,625,309     10,265,334     6,911,066
                   
Real estate funds     2,048,559     2,022,399     970,568
                   
Other     1,310,745     1,146,292     588,600
                   
Total   $ 45,494,861   $ 47,534,415   $ 40,238,812
                   
         
    Returns for the Year Ended December 31,   Annualized Returns Since Inception Through December 31, 2015   
    2015   2014   2013  
    Gross   Net   Gross   Net   Gross   Net   Gross     Net  
                                     
Multi-strategy funds                                    
  OZ Master Fund(2)   1.6%   -0.4%   9.0%   5.5%   19.8%   13.9%   17.4% (2)   12.2% (2)
  OZ Asia Master Fund   13.8%   9.6%   7.5%   4.0%   20.1%   13.5%   10.2%     6.0%  
  OZ Europe Master Fund   8.9%   5.8%   4.1%   1.8%   18.1%   12.4%   12.1%     8.0%  
  OZ Enhanced Master Fund   0.9%   -1.1%   12.1%   7.9%   20.9%   15.3%   12.4%     8.1%  
  Och-Ziff European Multi-Strategy UCITS Fund   8.7%   5.6%   -4.7%   -6.7%   19.5%   14.8%   5.9%     3.0%  
  Other funds   n/m   n/m   n/m   n/m   n/m   n/m   n/m     n/m  
                                     
Credit                                    
Opportunistic credit funds:                                    
  OZ Credit Opportunities Master Fund   -4.4%   -5.2%   12.4%   8.9%   24.5%   18.2%   16.7%     12.0%  
  Customized Credit Focused Platform   -%   -0.6%   17.8%   13.3%   22.0%   16.6%   19.2%     14.5%  
  Closed-end opportunistic credit funds   See the following page for information on the Company's closed-end opportunistic credit funds.
  Other funds   n/m   n/m   n/m   n/m   n/m   n/m   n/m     n/m  
                                     
Institutional Credit Strategies   See the following page for information on the Company's institutional credit strategies.
                                     
                                     
Real estate funds   See the second following page for information on the Company's real estate funds.
                                     
Other   n/m   n/m   n/m   n/m   n/m   n/m   n/m     n/m  
                                     
Total                                    
                                     

n/m not meaningful
Please see the last page of this Exhibit 7 ("Fund Information - Footnotes") for important disclosures related to the footnotes referenced herein.

 
EXHIBIT 7
OCH-ZIFF CAPITAL MANAGEMENT GROUP LLC
Fund Information - continued (Unaudited)
(dollars in thousands)
 
    Assets Under Management as of
December 31,
             
   
2015
 
2014
 
2013
Closed-end Opportunistic Credit Funds (Investment Period)                  
OZ European Credit Opportunities Fund (2012-2015)   $ 230,662   $ 574,602   $ 523,878
OZ Structured Products Domestic Fund II (2011-2014)(7)     301,534     434,921     446,449
OZ Structured Products Offshore Fund II (2011-2014)(7)     267,429     373,082     382,247
OZ Structured Products Offshore Fund I (2010-2013)(7)     23,495     31,498     136,882
OZ Structured Products Domestic Fund I (2010-2013)(7)     14,621     17,080     87,149
Other funds     82,045     185,194     289,027
    $ 919,786   $ 1,616,377   $ 1,865,632
                   
                         
    Inception to Date as of December 31, 2015
            IRR      
    Total
Commitments
  Total Invested
Capital (3)
 
Gross (4)
   
Net (5)
    Gross
MOIC (6)
Closed-end Opportunistic Credit Funds (Investment Period)                            
OZ European Credit Opportunities Fund (2012-2015)   $ 459,600   $ 305,487   17.5 %   13.2 %   1.4x
OZ Structured Products Domestic Fund II (2011-2014)(7)     326,850     326,850   19.7 %   15.1 %   1.8x
OZ Structured Products Offshore Fund II (2011-2014)(7)     304,531     304,531   16.5 %   12.4 %   1.6x
OZ Structured Products Offshore Fund I (2010-2013)(7)     155,098     155,098   23.9 %   19.3 %   2.1x
OZ Structured Products Domestic Fund I (2010-2013)(7)     99,986     99,986   23.0 %   18.3 %   2.0x
Other funds     298,250     268,250   n/m     n/m     n/m
    $ 1,644,315   $ 1,460,202                
n/m not meaningful                            
Please see the last page of this Exhibit 7 ("Fund Information-Footnotes") for important disclosures related to the footnotes referenced herein.
 
         
            Assets Under Management as of December 31,
    Closing Date   Initial Deal Size   2015   2014   2013
Institutional Credit Strategies                            
CLOs:                            
  OZLM I   July 19, 2012   $ 510,700   $ 499,344   $ 468,242   $ 465,614
  OZLM II   November 1, 2012     560,100     517,301     517,050     514,436
  OZLM III   February 20, 2013     653,250     613,827     613,190     610,254
  OZLM IV   June 27, 2013     600,000     543,297     542,744     546,077
  OZLM V   December 17, 2013     501,250     470,335     470,428     469,247
  OZLM VI   April 16, 2014     621,250     598,438     592,707     -
  OZLM VII   June 26, 2014     824,750     798,289     796,271     -
  OZLM VIII   September 9, 2014     622,250     597,988     596,858     -
  OZLM IX   December 22, 2014     510,208     495,643     494,244     -
  OZLM XI   March 12, 2015     510,500     491,366     -     -
  OZLM XII   May 28, 2015     565,650     548,452     -     -
  OZLM XIII   August 6, 2015     511,600     493,012     -     -
  OZLM XIV   December 21, 2015     507,420     495,798     -     -
          7,498,928     7,163,090     5,091,734     2,605,628
Other funds   n/a     n/a     78,590     75,000     -
        $ 7,498,928   $ 7,241,680   $ 5,166,734   $ 2,605,628
                             
 
EXHIBIT 7
OCH-ZIFF CAPITAL MANAGEMENT GROUP LLC
Fund Information - continued (Unaudited)
(dollars in thousands)
 
    Assets Under Management as of December 31,
             
    2015   2014   2013
Real Estate Funds (Investment Period)                  
                   
Och-Ziff Real Estate Fund I (2005-2010)(7)   $ 33,752   $ 47,187   $ 72,389
Och-Ziff Real Estate Fund II (2011-2014) (7)     343,679     409,338     767,994
Och-Ziff Real Estate Fund III (2014-2019)(13)     1,447,770     1,438,000     -
Och-Ziff Real Estate Credit Fund I (2015-2019)(13)     130,150     -     -
Other funds     93,208     127,874     130,185
    $ 2,048,559   $ 2,022,399   $ 970,568
                   
                             
    Inception to Date as of December 31, 2015
        Total Investments
    Total Commitments   Invested Capital(9)   Total Value(10)   Gross IRR(11)     Net IRR(5)     Gross MOIC(12)
Real Estate Funds (Investment Period)                                  
                                   
Och-Ziff Real Estate Fund I (2005-2010)(7)   $ 408,081   $ 385,058   $ 783,257   25.2 %   15.6 %   2.0x
Och-Ziff Real Estate Fund II (2011-2014)(7)     839,508     725,770     1,263,560   35.2 %   22.6 %   1.7x
Och-Ziff Real Estate Fund III (2014-2019)(13)     1,500,000     231,275     274,401   n/m     n/m     n/m
Och-Ziff Real Estate Credit Fund I (2015-2019)(13)     172,450     22,419     26,483   n/m     n/m     n/m
Other funds     177,263     102,511     165,683   n/m     n/m     n/m
    $ 3,097,302   $ 1,467,033   $ 2,486,384                
                                   
     
    Inception to Date as of December 31, 2015
    Realized/Partially Realized Investments(8)
    Invested Capital   Total Value   Gross IRR(11)     Gross MOIC(12)
                       
Real Estate Funds (Investment Period)                      
                       
Och-Ziff Real Estate Fund I (2005-2010)(7)   $ 359,360   $ 775,738
  28.1
%   2.2x
Och-Ziff Real Estate Fund II (2011-2014)(7)     492,355     946,877   41.1 %   1.9x
Och-Ziff Real Estate Fund III (2014-2019)(13)     -     -   n/m     n/m
Och-Ziff Real Estate Credit Fund I (2015-2019)(13)     22,419     26,483   n/m     n/m
Other Funds     -     -   n/m     n/m
    $ 874,134   $ 1,749,098          
                       
 
    Unrealized Investments
    as of December 31, 2015
    Invested
Capital
  Total
Value
  Gross
MOIC (12)
Real Estate Funds (Investment Period)                
                 
Och-Ziff Real Estate Fund I (2005-2010)(7)   $ 25,698   $ 7,519   0.3x
Och-Ziff Real Estate Fund II (2011-2014)(7)     233,415     316,683   1.4x
Och-Ziff Real Estate Fund III (2014-2019)(13)     231,275     247,401   n/m
Och-Ziff Real Estate Credit Fund I(2015-2019)(13)     -     -   n/m
Other funds     102,511     165,683   n/m
    $ 592,899   $ 737,286    
                 

n/m not meaningful
Please see the last page of this Exhibit 7 ("Fund Information-Footnotes") for important disclosures related to the footnotes referenced herein.

 
EXHIBIT 7
OCH-ZIFF CAPITAL MANAGEMENT GROUP LLC
Fund Information - Footnotes
   
(1) The return information reflected in these tables represents, where applicable, the composite performance of all feeder funds that comprise each of the master funds presented. Gross return information is generally calculated using the total return of all feeder funds, net of all fees and expenses except management fees and incentive income of such feeder funds and master funds and the returns of each feeder fund include the reinvestment of all dividends and other income. Net return information is generally calculated as the gross returns less management fees and incentive income (except incentive income on unrealized gains attributable to investments in certain funds that the Company, as investment manager, determines lack a readily ascertainable fair value, are illiquid or otherwise should be held until the resolution of a special event or circumstance ("Special Investments") that could reduce returns on these investments at the time of realization). Return information also includes realized and unrealized gains and losses attributable to Special Investments and initial public offering investments that are not allocated to all investors in the feeder funds. Investors that were not allocated Special Investments and/or initial public offering investments may experience materially different returns. 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.
(2) 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 the Company's broad multi-strategy mandate that were not subject to portfolio investment restrictions or other factors that limited the Company's 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. 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 the Company's investment decisions and the diversity of the investment strategies followed. Furthermore, the composition of the investment strategies the Company follows is subject to its discretion, has varied materially since inception and is expected to vary materially in the future. As of December 31, 2015, the gross and net annualized returns since the OZ Master Fund's inception on January 1, 1998 were 13.4% and 9.1%, respectively.
(3) Represents funded capital commitments net of recallable distributions to investors.
(4) Gross internal rate of return ("IRR") for the Company's 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 December 31, 2015, 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.
(5) Net IRR is calculated as described in footnotes (4) and (11), but is reduced by all management fees and for the real estate funds other fund-level fees and expenses not adjusted for in the calculation of gross IRR. Net IRR is further reduced by accrued and paid incentive income, which 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 multiple of invested capital ("MOIC") for the Company's 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.
(7) These funds have concluded their investment periods, and therefore the Company expects 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) 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.
(9) Invested capital represents total aggregate contributions made for investments by the fund.
(10) Total value represents the sum of realized distributions and the fair value of unrealized and partially realized investments as of December 31, 2015. 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 December 31, 2015.
(11) Gross IRR for the Company's real estate funds represents the estimated, unaudited, annualized return based on the timing of cash inflows and outflows for the aggregated investments as of December 31, 2015, 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.
(12) Gross MOIC for the Company's 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.
(13) This fund recently launched and has only invested a small portion of its committed capital; therefore, IRR and MOIC information is not presented, as it is not meaningful.
   
 
EXHIBIT 8
OCH-ZIFF CAPITAL MANAGEMENT GROUP LLC
Longer-Term Assets Under Management (Unaudited)
(dollars in thousands)
 

As of December 31, 2015, approximately 37% of the Company's assets under management were subject to initial commitment periods of three years or longer. The Company earns incentive income on these assets based on the cumulative investment performance generated over this commitment period. The table below presents the amount of these assets under management, as well as the amount of incentive income accrued at the fund level but for which the commitment period has not concluded. These amounts have not yet been recognized in our revenues, as the Company recognizes incentive income at the end of the commitment period when amounts are no longer subject to clawback. Further, these amounts may ultimately not be recognized as revenue by the Company in the event of future losses in the respective funds.

     
    December 31, 2015
    Longer-Term
Assets Under
Management
  Accrued
Unrecognized
Incentive
Multi-strategy funds   $ 3,077,438   $ 28,736
Credit            
  Opportunistic credit funds     4,239,975     125,608
  Institutional Credit Strategies     7,206,031     -
Real estate funds     2,048,559     114,241
Other     270,318     -
    $ 16,842,321   $ 268,585
             

The Company recognizes incentive income on its longer-term assets under management in multi-strategy funds and open-end opportunistic credit funds at the end of their respective commitment periods, which are generally three to five years. The Company expects the commitment period with respect to approximately 10% and 20% of the longer-term assets under management in the multi-strategy funds to mature during the first quarter of 2016 and the remainder of 2016, respectively. The Company does not expect the commitment period for a significant amount of longer-term assets under management in its open- end opportunistic credit funds to expire during the first quarter of 2016; however, the Company does expect the commitment period with respect to approximately 10% of the longer-term assets under management to mature during the remainder of 2016. Incentive income related to assets under management in the Company's closed-end opportunistic credit funds and its real estate funds is generally recognized at or near the end of the life of each fund. These funds generally begin to make distributions after the conclusion of their respective investment period, as presented in the tables in Exhibit 7. However, these investment periods may generally be extended for an additional one to two years.

 
EXHIBIT 9
OCH-ZIFF CAPITAL MANAGEMENT GROUP LLC
Financial Supplement (Unaudited)
As of January 1, 2016
 
OZ Master Fund by Investment Strategy     Investors by Type (1)  
  Long/Short Equity Special Situations 62%     Pensions 33%
  Merger Arbitrage 12%     Private Banks 17%
  Structured Credit 10%     Corporate, Institutional and Other 13%
  Convertible and Derivative Arbitrage 9%     Fund-of-Funds 12%
  Corporate Credit 6%     Foundations and Endowments 12%
  Private Investments 1%     Related Parties 7%
      Family Offices and Individuals 6%
       
       
Assets Under Management by Geography (2)     Investors by Geography (1)  
  North America 71%     North America 74%
  Europe 19%     Europe 15%
  Asia 10%     Asia and Other 11%
         
(1) Presents the composition of the Company's fund investor base across its funds excluding investors in its CLOs.
(2) The North American exposure includes the United States, Canada, Central America and South America. The European exposure includes Africa and the Middle East. The Asian exposure includes Australia and New Zealand.
   
                   
EXHIBIT 10  
OCH-ZIFF CAPITAL MANAGEMENT GROUP LLC  
Assets Under Management Trends (Unaudited)  
(dollars in thousands)  
                   
    Assets Under Management as of  
    December 31, 2015     December 31, 2014     December 31, 2013  
                         
Total Assets Under Management   $ 45,494,861     $ 47,534,415     $ 40,238,812  
Year-over-Year Growth     -4 %     18 %     23 %
                         
Longer-Term Assets Under Management(1)   $ 16,842,321     $ 15,150,049     $ 10,640,836  
% of Total Assets Under Management     37 %     32 %     26 %
                         
                         
Assets Under Management by Product                        
Multi-strategy funds     65 %     72 %     79 %
Credit                        
  Opportunistic credit funds     12 %     11 %     11 %
  Institutional Credit Strategies     16 %     11 %     6 %
Real estate funds     5 %     4 %     2 %
Other     2 %     2 %     2 %
Total assets under management in credit, real estate and other funds     35 %     28 %     21 %
                         
                         
    Assets Under Management as of          
    December 31, 2012     December 31, 2011          
                         
Total Assets Under Management   $ 32,603,930     $ 28,766,340          
Year-over-Year Growth     13 %     3 %        
                         
Longer-Term Assets Under Management(1)   $ 6,947,746     $ 5,178,012          
% of Total Assets Under Management     21 %     18 %        
                         
                         
Assets Under Management by Product                        
Multi-strategy funds     85 %     92 %        
Credit                        
  Opportunistic credit funds     7 %     4 %        
  Institutional Credit Strategies     3 %     - %        
Real estate funds     3 %     3 %        
Other     2 %     1 %        
Total assets under management in credit, real estate and other funds     15 %     8 %        
                         
   
(1) Longer-term assets under management are those subject to initial commitment periods of three years or longer. Please see Exhibit 8 for additional information.
   

Contact Information

  • Investor Relations Contact:
    Tina Madon
    Managing Director
    Head of Public Markets Investor Relations
    Och-Ziff Capital Management Group LLC
    +1-212-719-7381
    tina.madon@ozcap.com

    Media Relations Contact:
    Joe Snodgrass
    Managing Director
    Head of Corporate Communications
    +1-212-887-4821
    joseph.snodgrass@ozcap.com