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Morning Brief: Och-Ziff to Shut European Fund: Report

The multistrategy firm continues to battle redemptions long after settling its bribery charges.

  • By Stephen Taub

More retrenching is taking place at Och-Ziff Capital Management Group, the embattled multistrategy firm now headed by Robert Shafir. It is shutting down its OZ Europe Master Fund, according to Bloomberg, which reports that the fund’s assets have shriveled to about $230 million from about $900 million just two years ago. Bloomberg says investors are expected to move their money to the firm’s flagship fund, OZ Master Fund.

In 2017, company-wide assets fell 14.5 percent, to $32.4 billion, including performance gains. Assets in the firm’s multistrategy funds fell 35 percent, to $13.7 billion, driven in large part by $9.2 billion in net capital outflows, primarily from the OZ Master Fund, the company’s largest multi-strategy fund. Performance-related appreciation amounted to $1.8 billion.

Och-Ziff, of course, has been hurt by bribery charges — since settled — that plagued the firm for several years. The rash of redemptions came even as the OZ Master Fund posted a 10.4 percent gain last year, making it one of the better-performing multistrategy funds. OZ Europe returned 5.24 percent last year, according to regulatory filings.

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Mudrick Capital Management cut its stake in Verso Corporation by nearly 60 percent, to 2.1 million shares. It now owns 6.20 percent of the maker of coated papers.

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The Odey European Fund is mercifully off to a strong start this year. It is now up 9.25 percent through February, according to a document from investment bank HSBC that tracks hedge fund performance. Of course, it has a long way to go to get back to its high-water mark. It has lost money for the past three years and was down nearly 67 percent from January 2015 through December 2017, according to HSBC.

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