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The Morning Brief: Embattled Och-Ziff Joins Firms Cutting Fees
Och-Ziff Capital Management is the latest hedge fund firm to cut its fees. The New York multistrategy specialist, which is in the middle of settlement talks with federal investigators over alleged bribery charges, is trimming its fees on its OZ Master, OZ Asia and OZ Europe funds by 25 basis points, according to Bloomberg News, citing sources with knowledge of the matter. The funds currently charge management fees ranging from 1.5 percent to 2.5 percent in addition to a 20 percent performance fee. The publicly traded firm had not disclosed this development publicly as of Tuesday afternoon. The firm reported $39.1 billion in assets under management as of August 1—off $5.5 billion since year end.
As we have previously reported, the firm has found itself in hot water over the placement of funds by a foreign sovereign wealth fund in Och-Ziff in 2007 and investments by some of its funds in a number of African companies. The firm recently added $214.3 million to the $200 million reserve it established in anticipation of settling the bribery probe. The firm also recently appointed former U.S. attorney general William Barr to its board of directors. Barr had been attorney general under President George H.W. Bush, served on President Ronald Reagan’s domestic policy staff and at the Central Intelligence Agency.
Bloomberg also pointed out that in July, Paul Tudor Jones II’s Tudor Investment Corp. reduced its management fees for one of its share classes of its flagship Tudor BVI Global Fund from 2.75 percent to 2.25 percent of assets and its performance fee from 27 percent to 25 percent. It also pointed out that in June Aurelius Capital Management said it planned to cut its management fee next year from 1.5 percent to 1.25 percent.
___Rowan Companies announced it has reached a compromise deal with Blue Harbour Group, the Greenwich, Connecticut activist hedge fund headed by Clifton Robbins. Under a support agreement, the Houston, Texas-based oil driller appointed Charles Szews to its board of directors, expanding its size to ten directors. Szews, who was recommended by Blue Harbour, was previously chief executive officer of Oshkosh Corp., a maker of specialty vehicles and vehicle bodies, before retiring in December 2015.
___Soros Fund Management was among a number of investors to participate in the $29 million Series A financing of Washington, DC-based Virtru,a provider of encryption and data protection.
___The median hedge fund was up 0.55 percent in July, according to a monthly report from Deutsche Bank’s prime brokerage unit. For the year, the median fund is roughly flat, down 0.06 percent. Emerging markets equity and distressed funds were the best performers in July, up 1.91 percent and 1.53 percent, respectively. CTAs and fixed-income funds are the best performers for the year through the first seven months, rising 3.42 and 3.36 percent, respectively.Deutsche Bank also reported that railroad company Union Pacific, cable and television provider Comcast Corp-Class A, oil services firm Schlumberger, visual computing technology firm Nvidia Corp. and media company Netflix saw the largest increases in short activity in July. Apple, energy exploration firm Anadarko Petroleum, electric utility Consolidated Edison, semiconductor maker Texas Instruments and energy services firm Weatherford International saw net short covering.