Och-Ziff Capital Management Group LLC (NYSE:OZM) is off to a solid start in 2013 with profits of $351.3 million in last quarter of 2012 or $0.77 per share in earnings. The earnings beats the market estimate of $0.71 -$0.72 per share and compares more than well with the $0.04/share or $16.8 million profit Och-Ziff reported in the same quarter year ago. Och Ziff’s flagship, Och-Ziff Master Fund was up 11.6 percent in 2012, the handsome performance also boosted the performance fee the firm charges by 13 times, totalling $568 million in the last quarter, up from $43.1 million in 4Q2011. The total gains from all funds were $73.5 million, a leap from $9.6 million reported a year ago.
Revenues were up to $724 million, a major climb from the $181 million reported in the corresponding quarter of 2011. Analysts had expected its revenue to fall at $652 million, Och-Ziff Capital Management Group LLC (NYSE:OZM) beat estimates here as well.The assets under management also increased in the last quarter, the AUM is up from $31.3 billion in the third quarter to $32.6 billion, as of Dec 2012. The firm added another $500 million in the first month of January, its assets stood at $33.1 billion, as of Feb 1.
In other good news for shareholders, the company announced an increase in the dividend, which is up from 12 cents a share in 3Q2012 to 75 cents now. This also exceeds analyst expectations, which was 65 cents dividend. BAML rates OZM at Buy and sees the high revenue, greater incentive income and healthy earnings as major movers for the company, however, higher incentive (performance fee) income also means higher incentive compensation, which was 36 percent in Q4 and missed BAML’s forecast of 31 percent.
Competitors of Och-Ziff Capital Management Group LLC (NYSE:OZM) include MAN GROUP PLC (LON:EMG) (PINK:MNGPF) and Fortress Investment Group LLC (NYSE:FIG). Both have yet to report their Q4 earnings. Man Group will its report year end earnings on Feb 28. BAML expects a fall in AUM and no major strategic repositioning from the hedge fund, as it is engaged in reducing costs and building more strategies. BAML expects significant growth once the restructuring settles in and is therefore maintaing a Buy rating. The forecast is much better for Fortress Investment Group LLC (NYSE:FIG), the Macro Fund posted a 13 percent gain as of Oct 2012 and the AUM have been rising consistently.
