The Globe and Mail

Go to the Globe and Mail homepage

Jump to main navigationJump to main content

Press release from PR Newswire

Och-Ziff Capital Management Group LLC Reports 2012 First Quarter Results

Wednesday, May 02, 2012

Och-Ziff Capital Management Group LLC Reports 2012 First Quarter Results07:30 EDT Wednesday, May 02, 20122012 First Quarter Dividend of $0.10 per Class A ShareNEW YORK, May 2, 2012 /PRNewswire/ -- Och-Ziff Capital Management Group LLC (NYSE:OZM) (the "Company" or "Och-Ziff") today reported a GAAP Net Loss(1) of $122.7 million, or $0.87 per basic and diluted Class A Share, for the first quarter ended March 31, 2012. The Company also declared a $0.10 per share cash dividend on its Class A Shares for the 2012 first quarter.Summary HighlightsDistributable Earnings of $57.3 million, or $0.13 per Adjusted Class A Share, for the 2012 first quarter, 12% lower than $65.2 million, or $0.16 per Adjusted Class A Share, for the 2011 first quarter. Assets under management of $29.5 billion as of April 1, 2012, 4% higher than $28.4 billion as of January 1, 2012, and 2% higher than $29.0 billion as of April 1, 2011. Estimated assets under management of $29.8 billion as of May 1, 2012, which reflected year-to-date performance-related appreciation of $1.6 billion and capital net outflows of approximately $600 million. Estimated year-to-date net returns through April 30, 2012 of the OZ Master Fund of +5.0%, the OZ Europe Master Fund of +4.9%, the OZ Asia Master Fund of +5.2% and the OZ Global Special Investments Master Fund of +5.4%."Our investment performance during the 2012 first quarter and year-to-date has been strong," said Daniel S. Och, Chairman and Chief Executive Officer of Och-Ziff. "We generated consistent, positive, absolute returns with low volatility, and the strength of our performance reflects our intense focus on generating returns for our fund investors. At the same time, we have actively managed our exposures, maintained our diversification and continued to be opportunistic in moving capital to what we viewed as the best investment opportunities. We deployed capital in U.S. structured credit as well as U.S. and Asian long/short equity special situations, and we were fully invested in the OZ Master Fund as of April 1, 2012."Demand by institutional investors for alternative asset managers is increasing as these investors seek non-volatile returns to enhance the yield and diversity of their portfolios. We believe that this will lead to higher allocations to the hedge fund industry over time, although there is still near-term concern among these investors about economic conditions worldwide. However, we think the most important factor about future flows is not the exact point at which they start increasing, but rather the aggregate size of those flows over time and the corresponding market share that we are able to attract. We remain confident that as investors deploy capital to alternative asset managers we will be a leading beneficiary."(1) References to the Company's GAAP Net Loss throughout this press release refer to the Company's GAAP Net Loss Allocated to Class A Shareholders.GAAP NET LOSS ALLOCATED TO CLASS A SHAREHOLDERSFor the 2012 first quarter, Och-Ziff reported a GAAP Net Loss of $122.7 million, or $0.87 per basic and diluted Class A Share, compared to a GAAP Net Loss of $95.5 million, or $0.99 per basic and diluted Class A Share, for the 2011 first quarter.The year-over-year increase in the GAAP Net Loss was primarily due to an increase in the Company's interest in its principal operating subsidiaries (the "Och-Ziff Operating Group") driven by the public offering of 33.3 million Class A Shares in November 2011, the issuance of Class A Shares related to the vesting of Class A Restricted Share Units ("RSUs") and the exchange of Och-Ziff Operating Group A Units ("Group A Units") for Class A Shares. Because of the increase in the Company's interest in the Och-Ziff Operating Group, a larger portion of the losses of the Och-Ziff Operating Group was allocated to the Company. Also contributing to the year-over-year increase in the GAAP Net Loss were higher income taxes, partially offset by higher profitability in the Och-Ziff Operating Group due to lower operating expenses.The GAAP Net Loss in the 2012 first quarter primarily resulted from non-cash expenses of $398.4 million associated with the Company's reorganization in connection with its initial public offering ("IPO") in November 2007. These expenses are related to the amortization of Group A Units, which represent equity interests in the Och-Ziff Operating Group that were issued to the Company's pre-IPO owners in exchange for their pre-IPO interests in those subsidiaries. The Group A Units generally vest annually over five years through November 2012, and therefore the amortization of these expenses is expected to result in a GAAP Net Loss on an annual basis through the end of this year. Once vested, Group A Units may be exchanged on a one-to-one basis for Class A Shares.Additionally, the GAAP Net Loss in the 2012 first quarter was driven by non-cash expenses of $17.8 million for the amortization of equity-based compensation. These expenses primarily relate to RSUs and to Group A Units granted to partners subsequent to the IPO. Each RSU represents the right to receive one Class A Share upon vesting.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 discussion of "Non-GAAP Financial Measures" at the end of this press release.DISTRIBUTABLE EARNINGS (NON-GAAP)The Company's Distributable Earnings for the 2012 first quarter were $57.3 million, or $0.13 per Adjusted Class A Share, compared to $65.2 million, or $0.16 per Adjusted Class A Share, for the 2011 first quarter.The year-over-year decrease was principally attributable to lower incentive income, which was due to tax distributions taken in the first quarter of 2011 that did not recur in the first quarter of 2012. Tax distributions are amounts distributed to the Company to cover tax liabilities on incentive income that has been accrued by certain of the funds the Company manages, but will not be realized until the end of the relevant measurement period. These amounts relate to assets under management that have measurement periods of longer than one year. Also contributing to the decline were higher Adjusted Income Taxes. These decreases were partially offset by lower year-over-year guaranteed bonus accruals.Distributable Earnings is a non-GAAP measure. For reconciliations of Distributable Earnings to the respective GAAP Net Losses for the periods discussed above, please see Exhibit 2 that accompanies this press release. Additionally, please see the discussion of "Non-GAAP Financial Measures" at the end of this press release, including the definitions of Distributable Earnings and Adjusted Class A Shares.ASSETS UNDER MANAGEMENTOch-Ziff's assets under management were $30.1 billion as of March 31, 2012, $1.3 billion, or 5%, higher than $28.8 billion as of December 31, 2011, and $1.1 billion, or 4%, higher than $29.0 billion as of March 31, 2011. The year-over-year increase was driven by capital net inflows of $902.4 million and performance-related appreciation of $184.3 million.   Assets under management by fund:% Change (1)(dollars in billions)March 31, 2012December 31, 2011March 31, 2011Mar. 2012 vs.Dec. 2011Mar. 2012 vs.Mar. 2011OZ Master Fund$         20.9$                 20.2$         20.14%4%OZ Europe Master Fund2.22.32.9-2%-23%OZ Asia Master Fund1.71.61.65%4%OZ Global Special Investments    Master Fund1.01.01.25%-17%Other (1) (2)4.33.73.214%31%(1) Rounding differences may occur.(2) Includes real estate funds, credit funds and other alternative investment vehicles managed by the Company.Estimated assets under management were $29.8 billion as of May 1, 2012, which reflected estimated year-to-date performance-related appreciation of $1.6 billion and capital net outflows of approximately $600 million.INVESTMENT PERFORMANCEFor the 2012 first quarter, performance was driven primarily by global long/short equity special situations and U.S. and European credit-related strategies.  Performance by fund(1):2012JanuaryFebruaryMarch1QOZ Master Fund1.59%1.64%1.38%4.68%OZ Europe Master Fund1.82%1.99%0.97%4.85%OZ Asia Master Fund2.64%2.26%0.91%5.91%OZ Global Special Investments Master Fund1.39%2.01%1.60%5.08%(1) Please see important disclosures on Exhibit 5 that accompanies this press release. 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. Management evaluates Economic Income for the Och-Ziff Funds segment, the Company's only reportable 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.For reconciliations of Economic Income and its components to the respective GAAP measures, please see Exhibits 2 and 3 that accompany this press release. Additionally, please see the discussion of "Non-GAAP Financial Measures" at the end of this press release.The Company conducts substantially all of its business through the Och-Ziff Funds segment, which provides asset management services to its hedge funds 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.Economic Income Revenues (Non-GAAP)Economic Income revenues for the 2012 first quarter were $119.5 million, a 5% decrease from Economic Income revenues of $125.3 million for the 2011 first quarter. Management fees were $117.9 million, essentially unchanged from the prior-year period. The year-over-year decrease in Economic Income revenues was primarily due to a $5.7 million decrease in incentive income in the Och-Ziff Funds segment. The decline in incentive income was due to tax distributions taken in the first quarter of 2011 that did not recur in the first quarter of 2012. Tax distributions are amounts distributed to the Company to cover tax liabilities on incentive income that has been accrued by certain of the funds the Company manages, but will not be realized until the end of the relevant measurement period. These amounts relate to assets under management that have measurement periods of longer than one year.Compensation and Benefits (Non-GAAP)Compensation and benefits for the 2012 first quarter totaled $20.7 million, 11% lower than compensation and benefits of $23.2 million for the 2011 first quarter. Salaries and benefits for the 2012 first quarter totaled $19.3 million, a 10% increase from salaries and benefits of $17.6 million for the prior-year period.The decrease in compensation and benefits was driven by a $4.2 million decrease in bonus expense due to lower guaranteed bonus accruals in the Och-Ziff Funds segment. This decrease was partially offset by a $1.7 million increase in salaries and benefits due in part to an increase in our worldwide headcount. The ratio of salaries and benefits to management fees for the 2012 first quarter was 16% compared to 15% for the 2011 first quarter. The increase was primarily due to the year-over-year increase in salaries and benefits while management fees remained essentially unchanged.Non-Compensation Expenses (Non-GAAP)Non-compensation expenses for the 2012 first quarter totaled $22.5 million, an 8% increase from non-compensation expenses of $20.9 million for the 2011 first quarter. The ratio of non-compensation expenses to management fees for the 2012 first quarter was 19% compared to 18% for the 2011 first quarter. The increase was primarily due to the year-over-year net increase in various non-compensation expenses while management fees remained essentially unchanged.Economic Income (Non-GAAP)Economic Income for the 2012 first quarter was $75.9 million, 6% lower than Economic Income of $80.5 million for the 2011 first quarter.The decrease was principally driven by lower incentive income in the Och-Ziff Funds segment, partially offset by lower operating expenses in both the Och-Ziff Funds segment and the Company's Other Operations.CAPITALAs of March 31, 2012, the number of Class A Shares outstanding was 139,934,281. 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") in the Och-Ziff Operating Group ("Partner Units") and RSUs outstanding during the period have been converted on a one-to-one basis into Class A Shares. For the first quarter ended March 31, 2012, the total weighted-average Adjusted Class A Shares outstanding were 453,277,643.DIVIDENDThe Board of Directors of Och-Ziff authorized a 2012 first-quarter dividend of $0.10 per Class A Share. The dividend is payable on May 21, 2012 to holders of record as of the close of business on May 14, 2012. The ex-dividend date will be May 10, 2012.For U.S. federal income tax purposes, the dividend will be treated as a partnership distribution.  Based on the best information currently available, the Company estimates that when calculating withholding taxes, the entire amount of the 2012 first-quarter dividend will be treated as U.S. source dividend income.Non-U.S. holders of Class A Shares are generally subject to U.S. federal withholding tax at a rate of 30% (subject to reduction by applicable treaty or other exception) on their share of U.S. source dividends and certain other types of U.S. source income realized by the Company. With respect to interest, however, no withholding is generally required if proper certification (on an IRS Form W-8) of a beneficial owner's foreign status has been filed with the withholding agent.  Non-U.S. holders must generally provide the withholding agent with a properly completed IRS Form W-8 to obtain any reduction in withholding.*          *          *          *The Company will host a conference call today, May 2, 2012, at 8:30 a.m. Eastern Time to discuss its 2012 first-quarter results. The call will be open to the public and can be accessed by dialing +1-888-713-4199 (callers inside the U.S.) or +1-617-213-4861 (callers outside the U.S.).  The number should be dialed at least ten minutes prior to the start of the call and the passcode will be 77685607. A simultaneous webcast of the call will be available to the public on a listen-only basis on the Class A Shareholders section of the Company's website (www.ozcap.com).For those unable to listen to the live broadcast, a replay will be available by dialing +1-888-286-8010 (callers inside the U.S.) or +1-617-801-6888 (callers outside the U.S.), passcode 92962212, beginning approximately two hours after the event for two weeks.  A webcast replay of the event will also be available on the Company's website as noted above.*          *          *          *Non-GAAP Financial MeasuresThe Company's non-GAAP measures should not be considered as alternatives to the Company's GAAP Net Loss 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 financial measures calculated and presented in accordance with GAAP, please see Exhibits 2 and 3 attached to this press release. Economic IncomeIn 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 for the Company, the Och-Ziff Funds segment and Other Operations 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, therefore, 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 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. 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.   In addition, the full amount of deferred cash compensation expense and expenses related to compensation arrangements based on annual investment performance are recognized on the date they are determined (generally in the fourth quarter of each year), as management determines the total amount of compensation based on the Company's performance in the year of the award. 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, compensation and benefits, non-compensation expenses and net loss (income) allocated to noncontrolling interests as presented on an Economic Income basis are also non-GAAP measures. No adjustments to the GAAP basis have been made for incentive income, other revenues and net gains (losses) on joint ventures.  Distributable EarningsDistributable 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, including the Group A Units and other non-equity profit interests in the Och-Ziff Operating Group that may convert into Group A Units upon the occurrence of certain events.  Distributable Earnings per Share is equal to Distributable Earnings divided by the weighted-average number of Adjusted Class A Shares. Adjusted Class A Shares are determined assuming all Partner Units and RSUs are converted on a one-to-one basis into 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 and the Ziffs with respect to their Partner Units. *          *          *          *Forward-Looking StatementsThis 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, which 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 any 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. The Company cautions that forward-looking statements are subject to numerous assumptions, estimates, risks and uncertainties, including but not limited to: global economic, business, market and geopolitical conditions, including Euro-zone sovereign debt issues; U.S. and foreign regulatory developments relating to, among other things, financial institutions and markets, government oversight and taxation; the conditions impacting the hedge fund industry; the Company's ability to successfully compete for fund investors, assets, professional talent and investment opportunities; the Company's ability to retain its executive managing directors, managing directors and 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 the Company's business; as well as 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, the Company's 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 that are included in the Company's filings with the 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, 2011 filed with the SEC on February 27, 2012. 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, whether as a result 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, Beijing and Mumbai. Och-Ziff provides asset management services to institutional investors globally through its hedge fund and other alternative investment vehicles. Och-Ziff's funds seek to generate consistent, positive, absolute returns across market cycles with low volatility compared to the equity markets, and with an emphasis on preservation of capital. Och-Ziff's multi-strategy approach combines global investment strategies, including convertible and derivative arbitrage, corporate credit, long/short equity special situations, merger arbitrage, private investments and structured credit. As of May 1, 2012, Och-Ziff had approximately $29.8 billion in assets under management. For more information, please visit Och-Ziff's website (www.ozcap.com).   EXHIBIT 1OCH-ZIFF CAPITAL MANAGEMENT GROUP LLCConsolidated Statements of Comprehensive Loss (Unaudited)(dollars in thousands, except per share amounts)Three Months Ended March 31,20122011RevenuesManagement fees $      122,082$    121,346Incentive income1,2216,966Other revenues364358Income of consolidated Och-Ziff funds 17,2579,738Total Revenues 140,924138,408ExpensesCompensation and benefits 40,87059,205Reorganization expenses398,416405,855Interest expense1,2432,048General, administrative and other28,94825,105Expenses of consolidated Och-Ziff funds2,1121,450Total Expenses 471,589493,663Other IncomeNet gains on investments in Och-Ziff funds and joint ventures94176Change in deferred income of consolidated Och-Ziff funds(15,372)(2,326)Net gains of consolidated Och-Ziff funds76,4128,287Total Other Income61,1346,137Loss before Income Taxes(269,531)(349,118)Income taxes 14,4048,626Consolidated Net Loss(283,935)(357,744)Other Comprehensive Income, Net of TaxForeign currency translation adjustment3718Total Comprehensive Loss$    (283,898)$  (357,726)Allocation of Consolidated Net LossClass A Shareholders$    (122,744)$    (95,464)Noncontrolling interests(161,191)(262,280)$    (283,935)$  (357,744)Allocation of Total Comprehensive LossClass A Shareholders$    (122,732)$    (95,460)Noncontrolling interests(161,166)(262,266)$    (283,898)$  (357,726)Net Loss Per Class A ShareBasic and Diluted$          (0.87)$        (0.99)Weighted-Average Class A Shares OutstandingBasic and Diluted140,894,18596,812,723  EXHIBIT 2OCH-ZIFF CAPITAL MANAGEMENT GROUP LLCReconciliation of Non-GAAP Measures to the Respective GAAP Measures (Unaudited)(dollars in thousands, except per share amounts)Three Months Ended March 31, 2012Och-ZiffFunds SegmentOther OperationsTotalCompanyNet loss allocated to Class A Shareholders - GAAP $           (123,196)$                       452$     (122,744)Reorganization expenses398,416-398,416Net loss allocated to the Och-Ziff Operating Group A Units(236,408)-(236,408)Equity-based compensation 17,7882017,808Income taxes14,404-14,404Depreciation and amortization2,1711872,358Amortization of deferred cash compensation and expenses related to compensation arrangements based on annual fund performance1,280-1,280Other946(166)780Economic Income - Non-GAAP$               75,401$                       49375,894Adjusted Income Taxes - Non-GAAP(1)(18,623)Distributable Earnings - Non-GAAP$         57,271Weighted-Average Class A Shares Outstanding140,894,185Weighted-Average Partner Units304,810,448Weighted-Average Class A Restricted Share Units (RSUs)7,573,010Weighted-Average Adjusted Class A Shares453,277,643Distributable Earnings Per Adjusted Class A Share - Non-GAAP$             0.13Three Months Ended March 31, 2011Och-ZiffFunds SegmentOther OperationsTotalCompanyNet loss allocated to Class A Shareholders - GAAP $             (95,589)$                       125$       (95,464)Reorganization expenses405,855-405,855Net loss allocated to the Och-Ziff Operating Group A Units(276,988)-(276,988)Equity-based compensation 31,9291,56933,498Income taxes8,986(360)8,626Depreciation and amortization2,2901842,474Amortization of deferred cash compensation and expenses related to compensation arrangements based on annual fund performance1,689-1,689Other887(87)800Economic Income - Non-GAAP$              79,059$                     1,43180,490Adjusted Income Taxes - Non-GAAP(1)(15,309)Distributable Earnings - Non-GAAP$         65,181Weighted-Average Class A Shares Outstanding96,812,723Weighted-Average Partner Units305,215,206Weighted-Average Class A Restricted Share Units (RSUs)13,003,234Weighted-Average Adjusted Class A Shares415,031,163Distributable Earnings Per Adjusted Class A Share - Non-GAAP$             0.16(1) Presents an estimate of income tax expense 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 3OCH-ZIFF CAPITAL MANAGEMENT GROUP LLCComponents of Economic Income and Reconciliation of Certain Non-GAAP Measures to the Respective GAAP Measures (Unaudited)(1)(dollars in thousands)Three Months Ended March 31, 2012Och-Ziff Funds SegmentOther OperationsTotalCompanyManagement fees - GAAP$            119,695$                    2,387$  122,082Adjustment to management fees(2)(4,202)-(4,202)Management Fees - Economic Income Basis - Non-GAAP115,4932,387117,880Incentive income(3) 1,221-1,221Other revenues(3) 264100364Total Revenues - Economic Income Basis - Non-GAAP$             116,978$                    2,487$   119,465Compensation and benefits - GAAP$              39,874$                       996$    40,870Adjustment to compensation and benefits(4)(20,131)(20)(20,151)Compensation and Benefits - Economic Income Basis - Non-GAAP$               19,743$                       976$     20,719Interest expense and general, administrative and other expenses - GAAP$              29,453$                       738$    30,191Adjustment to interest expense and general, administrative and other expenses(5)(7,457)(187)(7,644)Non-Compensation Expenses - Economic Income Basis - Non-GAAP$               21,996$                       551$    22,547Net gains (losses) on investments in Och-Ziff funds and joint ventures - GAAP$                   205$                     (111)$           94Adjustment to net gains (losses) on investments in Och-Ziff funds and joint ventures(6)(43)-(43)Net Gains (Losses) on Joint Ventures(7) $                    162$                      (111)$            51Net income (loss) allocated to noncontrolling interests - GAAP$           (214,891)$                  53,700$ (161,191)Adjustment to net income (loss) allocated to noncontrolling interests(8)214,891(53,344)161,547Net Income Allocated to Noncontrolling Interests - Economic Income Basis - Non-GAAP(9)$                      -$                       356$         356Three Months Ended March 31, 2011Och-Ziff Funds SegmentOther OperationsTotalCompanyManagement fees - GAAP$            117,060$                    4,286$  121,346Adjustment to management fees(2)(3,373)-(3,373)Management Fees - Economic Income Basis - Non-GAAP113,6874,286117,973Incentive income(3) 6,966-6,966Other revenues(3) 30256358Total Revenues - Economic Income Basis - Non-GAAP$             120,955$                    4,342$   125,297Compensation and benefits - GAAP$              56,881$                    2,324$    59,205Adjustment to compensation and benefits(4)(34,454)(1,569)(36,023)Compensation and Benefits - Economic Income Basis - Non-GAAP$              22,427$                       755$     23,182Interest expense and general, administrative and other expenses - GAAP$              25,688$                    1,465$    27,153Adjustment to interest expense and general, administrative and other expenses(5)(6,050)(184)(6,234)Non-Compensation Expenses - Economic Income Basis - Non-GAAP$               19,638$                     1,281$     20,919Net gains (losses) on investments in Och-Ziff funds and joint ventures - GAAP$                   230$                       (54)$         176Adjustment to net gains (losses) on investments in Och-Ziff funds and joint ventures(6)(61)-(61)Net Gains (Losses) on Joint Ventures(7) $                    169$                       (54)$          115Net income (loss) allocated to noncontrolling interests - GAAP$           (271,896)$                    9,616$ (262,280)Adjustment to net income (loss) allocated to noncontrolling interests(8)271,896(8,795)263,101Net Income Allocated to Noncontrolling Interests - Economic Income Basis - Non-GAAP(9)$                      -$                       821$          821(1) The items presented on an Economic Income basis above are the components that comprise Economic Income for the Och-Ziff Funds segment, Other Operations and the Company.(2) 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.(3) These items are presented on a GAAP basis, accordingly no adjustments to or reconciliations of these items are presented.(4) 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. Additionally, the full amount of deferred cash compensation and expenses related to compensation arrangements based on annual investment performance is recognized on the date it is determined (generally in the fourth quarter of each year), as management determines the total amount of compensation based on the Company's performance in the year of the award.(5) 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.(6) Adjustment to exclude net gains (losses) on investments in Och-Ziff funds, as management does not consider these gains (losses) to be reflective of the operating performance of the Company.(7) Represents the net gains (losses) on joint ventures established to expand certain of the Company's private investments platforms.(8) Adjustment to exclude amounts allocated to the executive managing directors and the Ziffs on their interests in the Och-Ziff Operating Group, as management reviews the 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 (losses) to investors in those funds, is also removed.(9) Represents the residual interests in the domestic real estate management business not owned by the Company.  EXHIBIT 4OCH-ZIFF CAPITAL MANAGEMENT GROUP LLCFinancial Supplement (Unaudited)(dollars in millions)Three MonthsEnded March 31,2012Total Assets Under Management(1)Beginning of period balance$              28,766Net flows(63)Appreciation (2)1,414End of Period Balance$              30,117Assets Under Management by Fund(1)OZ Master Fund$              20,950OZ Europe Master Fund2,234OZ Asia Master Fund1,703OZ Global Special Investments Master Fund1,023Net Returns(3)OZ Master Fund4.7%OZ Europe Master Fund4.9%OZ Asia Master Fund5.9%OZ Global Special Investments Master Fund5.1%Year Ended December 31,201120102009Total Assets Under Management(1)Beginning of period balance$              27,935$         23,080$         26,955Net flows1,1162,693(8,053)Appreciation (depreciation)(2)(285)2,1624,178End of Period Balance$              28,766$         27,935$        23,080Assets Under Management by Fund(1)OZ Master Fund$              20,198$         19,625$        15,577OZ Europe Master Fund2,2722,9582,957OZ Asia Master Fund1,6201,5351,246OZ Global Special Investments Master Fund9761,2401,999Net Returns(3)OZ Master Fund-0.5%8.5%23.1%OZ Europe Master Fund-4.9%7.5%16.4%OZ Asia Master Fund-3.8%9.9%34.0%OZ Global Special Investments Master Fund3.2%13.4%8.4%Past performance is no indication or guarantee of future results.(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 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), and includes the reinvestment of all dividends and other income. Management fees and incentive income vary by product.  (3) Net return represents a composite of the average return of the feeder funds that comprise each of the Company's most significant master funds. Net return is presented on a total return basis, net of all fees and expenses (except incentive income on Special Investments that could reduce returns on these investments at the time of realization), and includes the reinvestment of all dividends and other income. Performance 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.  EXHIBIT 5OCH-ZIFF CAPITAL MANAGEMENT GROUP LLCFund Performance of Certain Och-Ziff Funds (Unaudited)2012JanuaryFebruaryMarch1QNet Returns(1)OZ Master Fund1.59%1.64%1.38%4.68%OZ Europe Master Fund1.82%1.99%0.97%4.85%OZ Asia Master Fund2.64%2.26%0.91%5.91%OZ Global Special Investments Master Fund1.39%2.01%1.60%5.08%S&P 500 Index(2)4.48%4.32%3.29%12.59%MSCI World Index(2)4.36%4.78%1.82%11.34%2011JanuaryFebruaryMarchAprilMayNet Returns(1)OZ Master Fund1.71%1.14%0.48%0.73%-0.04%OZ Europe Master Fund2.29%0.91%0.34%0.38%0.20%OZ Asia Master Fund0.98%0.03%0.44%0.80%-1.68%OZ Global Special Investments Master Fund2.20%1.77%0.59%0.95%0.38%S&P 500 Index(2)2.37%3.43%0.04%2.96%-1.13%MSCI World Index(2)1.96%2.97%-1.23%2.33%-1.17%2011JuneJulyAugustSeptemberOctoberNet Returns(1)OZ Master Fund-0.71%-0.01%-1.84%-1.94%0.66%OZ Europe Master Fund-2.21%-1.68%-2.71%-0.95%0.21%OZ Asia Master Fund0.78%0.88%-1.70%-4.05%2.40%OZ Global Special Investments Master Fund0.49%-0.36%-1.75%-1.55%0.34%S&P 500 Index(2)-1.67%-2.03%-5.43%-7.03%10.93%MSCI World Index(2)-1.55%-2.70%-6.72%-6.02%8.58%NovemberDecemberFY2011Net Returns(1)OZ Master Fund-0.57%-0.02%-0.48%OZ Europe Master Fund-1.57%-0.14%-4.93%OZ Asia Master Fund-0.73%-1.85%-3.80%OZ Global Special Investments Master Fund0.30%-0.17%3.16%S&P 500 Index(2)-0.22%1.02%2.11%MSCI World Index(2)-1.22%0.62%-4.96% Past performance is no indication or guarantee of future results.(1)  Net return represents a composite of the average return of the feeder funds that comprise each of the Company's most significant master funds. Net return is presented on a total return basis, net of all fees and expenses (except incentive income on unrealized gains attributable to investments 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), and includes the reinvestment of all dividends and other income. Performance 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. (2) This comparison shows the returns of the S&P 500 Index (SPTR) and the MSCI World Index (GDDLWI) ("Broader Market Indices") against certain Och-Ziff funds (the "funds"). This comparison is intended solely for illustrative purposes to show a historical comparison of the funds to the broader equity markets, as represented by the Broader Market Indices, and should not be considered as an indication of how the funds will perform relative to the Broader Market Indices in the future. The Broader Market Indices are not performance benchmarks of the funds. The funds are not managed to correlate in any way with the returns or composition of the Broader Market Indices, which are unmanaged. It is not possible to invest in an unmanaged index. You should not assume that there is any material overlap between the securities in the funds and those that comprise the Broader Market Indices. The S&P 500 Index is an equity index whose value is calculated as the free-float weighted average of the share prices of the 500 large-cap companies listed on the NYSE and NASDAQ. The MSCI World Index is a free-float adjusted market capitalization weighted index that is designed to measure the equity market performance of developed markets. Returns of the Broader Market Indices have not been reduced by fees and expenses associated with investing in securities and include the reinvestment of dividends.  EXHIBIT 6OCH-ZIFF CAPITAL MANAGEMENT GROUP LLCFinancial Supplement (Unaudited)As of April 1, 2012OZ Master Fund by Investment StrategyInvestors by TypeLong/Short Equity Special Situations37%Pensions29%Structured Credit26%Fund-of-Funds17%Convertible and Derivative Arbitrage15%Foundations and Endowments14%Corporate Credit13%Corporate, Institutional and Other12%Private Investments6%Private Banks12%Merger Arbitrage3%Related Parties9%Cash0%Family Offices and Individuals7%Assets Under Management by Geography(1)Investors by GeographyNorth America53%North America72%Europe29%Europe17%Asia18%Asia and Other11%(1)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.SOURCE Och-Ziff Capital Management Group LLCFor further information: Investor Relations: Tina Madon, Managing Director, Head of Investor Relations, Och-Ziff Capital Management Group LLC, +1-212-719-7381, tina.madon@ozcap.com; or Media Relations: George Sard or Jonathan Gasthalter, Sard Verbinnen & Co, +1-212-687-8080