The Morning Brief: Och-Ziff Continues to Suffer Massive Redemptions

Och-Ziff Capital Management is still feeling the effects of a bribery scandal that resulted in a $412 million settlement with the government last year. The publicly traded hedge fund firm disclosed that assets under management declined by $3.6 billion in the last month alone, leaving it with $33.5 billion at year-end. The reduction seems to mostly reflect redemptions, given that the multistrategy firm’s flagship hedge fund, the OZ Master Fund, returned 0.72 percent for the month. It finished the year up 3.82 percent. The OZ Europe Master Fund was also up for the month, by 1.61 percent. For the full year it rose 3.70 percent. On the other hand, OZ Asia Master Fund lost 2.27 percent in December, extending its loss for the year to 5.39 percent. Altogether, the hedge fund firm’s assets declined by roughly 25 percent in 2016. The firm earlier said it suffered $6 billion in redemptions in the first three quarters of the year.


Shares of hedge fund favorite Marathon Petroleum Corp. fell 3.2 percent, to close at $51.24, even though Credit Suisse raised its price target on the stock from $55 to $63. The investment bank made its move following the company’s announcement that it will accelerate plans to “drop down” assets to its master limited partnership. As we reported, Elliott Management Corp. earlier disclosed owning about 4 percent of the shares and urged the company to initiate a restructuring. Soroban Capital Partners is also a top-ten holder, with 2 percent of the shares.


The Chemours Company surged 4.6 percent, to $22.19, after it was announced the company’s stock will be added to the S&P MidCap 40 Index. The stock has been one of the top performers, more than quadrupling in price last year. The chemical company is a major holding of Greenlight Capital, which in turn is the company’s largest shareholder.