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The Morning Brief: Fortress, Och-Ziff Earnings Climb; Tiger Global Trims TAL Stake

Two of the handful of publicly-traded hedge fund firms reported quarterly earnings on Friday. Fortress Investment Group reported pretax distributable earnings of $64 million, up 49 percent from $43 million a year earlier, exceeding consensus analyst forecasts. The firm cited strong performances in all of its businesses, including hedge funds, credit funds and private equity funds. The firm said its Drawbridge Special Opportunities Fund is up 13.1 percent for the year, the Fortress Macro Fund is up 11.1 percent and the Fortress Asia Macro Funds were up about 3 percent.

Meanwhile, Och-Ziff Capital Management said reported distributable earnings rose nearly 12 percent, to $61.7 million from $49.9 million a year ago. This excludes costs related to its November 2007 initial public offering. The hedge fund firm said the gains were driven by lower taxes, partially offset by higher non-compensation expenses and lower management fees. The firm also cut its dividend to $0.12 per share from the $0.13 it paid in the second quarter. Separately, the firm reported that assets under management climbed to $31.8 million on Nov. 1. It also reported that its biggest hedge fund — OZ Master Fund — made 0.81 percent in October, putting its full-year gain at 9.41 percent. The OZ Europe Master Fund Ltd.is up 7.81 percent for the year, OZ Asia Master Fund Ltd. has gained 3.54 percent and OZ Global Special Investments Master Fund L.P. is up 7.80 percent.

Jeff Smith’s Starboard Value LP has identified a new target. The activist hedge fund disclosed that it owns more than 26 million shares of Quantum Corp., or 15.9 percent of the total outstanding shares. The stock, with a market capitalization of $338 million, was up more than 16 percent, to about $1.37 per share, on Friday. It had traded just below $3 as recently as last February. The company provides storage, data protection and other related services. It fits the mold of a typical Starboard target—a market cap of below $1 billion.

Chase Coleman’s Tiger Global Management has reduced its stake in TAL Education Group to 34 percent from 37.8 percent. Most of the sales were for $9 per share. Shares of the company, which provides after-school tutoring services in China, rose more than 4 percent on Friday, to $9.20.

Brevan Howard has hired Goldman Sachs credit trader Wayne Leslie. He had been in charge of Goldman’s European investment-grade trading.

http://www.bloomberg.com/news/2012-11-02/brevan-howard-said-to-hire-goldman-sachs-credit-trader-leslie.html

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