According to Credit Suisse Group AG (NYSE:CS) the hedge fund managers to report solid trends in 2Q 13 despite the broad-based  June  declines  in  equity  and  bond  market  prices.

Hedge Fund

Credit Suisse: Reduce EPS at FIG/OZM; Still Expect Beat from FIG

Specifically, Credit Suisse Group AG (NYSE:CS) still expect a beat from Fortress Investment Group LLC (NYSE:FIG) driven by incentive income, and while they estimate in-line EPS for Och-Ziff Capital Management Group LLC (NYSE:OZM), they believe OZM will post 13 percent annual organic growth driven by a $0.6 billion CLO raise. CS “core” alternative flow estimate (x-CLO) for Och-Ziff Capital Management Group LLC (NYSE:OZM) is also positive  in  2Q  and  compares  favorably  to  the  net  redemptions  experienced  in 2H 12.

They have reduced 2Q 13 EPS estimates for FIG (down 2 cents) and OZM (down  1  cent)  –  see  above table   for  specific  details. Fortress Investment Group LLC (NYSE:FIG) was  driven  by  lower performance in June which impacted Credit Suisse Group AG (NYSE:CS) performance fee estimate. Their LT EPS estimate for FIG fell by 3 percent, and they reduced their TP to $8.5 from $8.8.

Hedge Fund

Hedge Fund Key Development

Fortress Investment Group LLC (NYSE:FIG) continues its strategic shift away from traditional buyout vehicles and is marketing  two  separate  sector-specific  PE  funds:  MSR2  and  Fortress Infrastructure Partners (FIP). CS believe both funds will target capital raises of 1 billion and close in 2H 13. Credit business co-CIO Pete Briger has been negative on the credit market’s investment environment for some time, and has been slow to deploy the 5.9 billion in dry powder in the credit PE segment.

Credit Suisse Group AG (NYSE:CS) expect some commentary on the call regarding market opportunities and possible future capital deployment. FIG’s  flagship  Macro  Fund  and  recently  launched  Asia  Macro  Fund  (March 2011) are now up ~13 percent YTD. CS believe recent performance has translated into improved flows, with Asia Macro reportedly already hitting its 2013 cap of 1.7 billion.

OZM raised its fourth CLO in as many quarters with a $600 million offering in June. These four CLOs total 2.3 billion and represent an estimated 79 percent of OZM’s total organic  growth  over  the  past  four  quarters.  OZM’s  non-HF  business  (RE  & Credit) has now grown by an estimated 63 percent since 2Q 12. Based on Och-Ziff Capital Management Group LLC (NYSE:OZM)’s  performance/AuM  disclosures,  CS  model  estimates  2Q 13 core  multi-strategy  HF  net  flows  of  +500 million,  bringing  the  YTD  total  to  just under 1 billion. However, they estimate July 1 outflows of approximately 500 million and forecast  total  net  flows  of  under  200 million  in  3Q 13 . At a recent conference, MGMT noted that they think  they  will  grow  their  long/short  strategy  as  clients  have  requested dedicated platforms.

Hedge Fund