Och-Ziff Capital Management became the latest alternative investment manager to offer shares to the public, but its share price suffered the same fate as those of Fortress Investments and
Och-Ziff Capital Management became the latest alternative investment manager to offer shares to the public, but its share price suffered the same fate as those of Fortress Investments and the Blackstone Group, which remain well below their offering prices from earlier this year.
The flotation has been watched with interest by the market after Fortress and Blackstone led the trend toward public offerings of hedge fund and private equity management firms – they were followed this month by London-based GLG, which obtained a New York listing through a reverse takeover – but have suffered from market disenchantment exacerbated by the sub-prime crisis and resulting credit crunch.
Och-Ziff made its debut on the New York Stock Exchange on Wednesday after pricing its initial public offering of 36 million class A shares at USD32 per share. The stock quickly rose to a high of USD32.74 in early trading before slipping to USD30.65 by the close, a decline of 6.25 per cent.
The current partners in Och-Ziff, which was founded by former Goldman Sachs head of proprietary equity trading Daniel Och in 1994 with capital from the Ziff publishing family, will receive proceeds from the IPO of more than USD1.1bn as well as USD1.25bn from the concurrent sale of a 9.9 per cent stake to Dubai International Capital. The firm’s partners have agreed to invest all their after-tax proceeds in Och-Ziff funds.
Goldman Sachs and Lehman Brothers were global co-ordinators for the offering, while Merrill Lynch, Morgan Stanley, Citi, Deutsche Bank Securities and JP Morgan served as bookrunners.
Och-Ziff, which has 18 partners, 27 managing directors and 300 employees, had some USD30.1 billion in assets under management for more than 700 investors at the end of September. Some 65 per cent of the total assets are in the flagship multistrategy OZ Master Fund, which has achieved a net annualised return of 12.2 per cent over the past five years.