Och-Ziff Capital Management Group LLC Reports 2009 Third Quarter Results

11/03/2009
2009 Third Quarter Dividend of $0.07 per Class A Share

NEW YORK, Nov. 3 /PRNewswire-FirstCall/ -- Och-Ziff Capital Management Group LLC (NYSE: OZM) (the "Company" or "Och-Ziff") today reported a GAAP Net Loss(1) of $80.0 million, or $1.02 per basic and $1.06 per diluted Class A Share, for the third quarter ended September 30, 2009. The Company also declared a $0.07 per share third quarter cash dividend on its Class A Shares.

 

Summary Highlights

 

  • Distributable Earnings of $34.2 million, or $0.08 per Adjusted Class A Share, for the 2009 third quarter
  • Assets under management of $22.6 billion as of November 1, 2009, compared to $22.1 billion as of October 1, 2009
  • Year-to-date net returns through October 31, 2009 of the OZ Master Fund of 21.3%, the OZ Europe Master Fund of 15.6%, the OZ Asia Master Fund of 28.0% and the OZ Global Special Investments Master Fund of 7.2%

 

 

"We continued to generate very strong investment performance across all of our funds during the third quarter and in the month of October," said Daniel Och, Chairman and Chief Executive Officer of Och-Ziff. "We have now surpassed the high water marks for the majority of our capital. Our diversified, multi-strategy approach, which adheres to disciplined investment and risk management processes and the limited use of leverage, has driven the consistency and low volatility of our investment returns since our founding in 1994 and this year has been no different.

 

"We believe that redemptions have now normalized to historical levels for the hedge fund industry as a whole as market conditions have further improved and investor confidence has increased. We remain confident that as investors re-deploy capital to alternative investments, we will be a leading beneficiary of those flows because of our track record, infrastructure, transparency and the consistency of our model."

 

(1) References to the Company's GAAP Net Loss throughout this press release refer to the Company's GAAP Net Loss Allocated to Class A Shareholders.

 

GAAP Net Loss Allocated to Class A Shareholders

 

For the 2009 third quarter, Och-Ziff reported a GAAP Net Loss of $80.0 million, or $1.02 per basic and $1.06 per diluted Class A Share, compared to a GAAP Net Loss of $69.4 million, or $0.94 per basic and $1.07 per diluted Class A Share, for the 2008 third quarter. The primary drivers of the year-over-year increase were a decline in Management Fees due to lower assets under management and higher compensation expenses, as discussed below.

 

For the first nine months of 2009, Och-Ziff reported a GAAP Net Loss of $250.2 million, or $3.23 per basic and $3.25 per diluted Class A Share, compared to a GAAP Net Loss of $398.4 million, or $5.37 per basic and diluted Class A Share, for the first nine months of 2008. The primary driver of the year-over-year decrease was an increase in the Net Loss Allocated to Partners' and Others' Interests in Income of Consolidated Subsidiaries resulting from the adoption of SFAS No. 160, partially offset by a decline in Management Fees due to lower assets under management and higher compensation expenses, as discussed below.

 

The GAAP Net Loss in the 2009 third quarter and first nine months primarily resulted from non-cash expenses of $417.5 million and $1.3 billion, respectively, associated with the Company's reorganization in connection with its initial public offering ("IPO") in November 2007. These expenses are related to the amortization of Och-Ziff Operating Group A Units ("Group A Units"), which represent equity interests in the Company's principal operating subsidiaries (the "Och-Ziff Operating Group") that were issued to the Company's pre-IPO owners in exchange for their pre-IPO interests in those subsidiaries. The Group A Units vest annually over five years until November 2012. Accordingly, the amortization of these expenses is expected to result in a GAAP Net Loss each quarter through the end of 2012. Once vested, the Group A Units may be exchanged on a one-to-one basis for Class A Shares.

 

Additionally, the GAAP Net Loss in the 2009 third quarter and first nine months were driven by non-cash expenses of $33.5 million and $86.1 million, respectively, for the amortization of equity-based compensation. This expense relates primarily to Class A Restricted Share Units ("RSUs") awarded to all of the Company's employees in connection with the IPO, which vest annually over four years from the closing of the IPO, and subsequent compensation-related grants. Each RSU represents the right to receive one Class A Share upon vesting.

 

Also contributing to the GAAP Net Loss in the 2009 third quarter and first nine months was compensation expense relating to the accrual of estimated discretionary cash bonuses. These cash bonuses are funded by total annual revenues, which are significantly influenced by incentive income earned by the Company at the end of the year. In the second quarter of 2009, the Company began to accrue for the estimated discretionary cash bonuses that it expected to pay its employees at year-end. The Company did this in order to provide a competitive compensation structure taking into account the high-water marks in its funds, which if not recovered could preclude it from earning any incentive income, and the fact that its funds had generated strong year-to-date investment performance due to the efforts of the Company's employees. In the third quarter of 2009, management revised its annual discretionary bonus compensation methodology for years in which high-water marks are in effect. During the second and third quarter, the Company accrued a total of $31.5 million. Any remaining amount will be expensed in the fourth quarter. The actual cash bonuses paid in the 2009 fourth quarter may vary materially from management's current estimate as discretionary cash bonuses are based on total annual revenues, including any year-end incentive income, which is influenced by, among other things, the Company's funds' investment performance, the level of assets under management, the ability of its funds to continue to satisfy the high-water marks at the end of the year and global economic and market conditions. As the Company has done historically, it will determine the actual amount of annual discretionary cash bonuses in the fourth quarter of this year.

 

Throughout this press release, the Company presents financial measures that are not prepared in accordance with GAAP. For a discussion of all of the Company's non-GAAP financial measures, please see the discussion "Non-GAAP and Segment Financial Measures" at the end of this press release.

 

 

Distributable Earnings (NON-GAAP)

 

The Company's Distributable Earnings for the 2009 third quarter were $34.2 million, or $0.08 per Adjusted Class A Share, compared with $52.7 million, or $0.13 per Adjusted Class A Share, in the 2008 third quarter. Distributable Earnings for the first nine months of 2009 were $73.9 million, or $0.18 per Adjusted Class A Share, compared with $156.2 million, or $0.39 per Adjusted Class A Share, in the first nine months of 2008. The year-over-year reduction in Distributable Earnings for both periods was primarily attributable to the decline in Management Fees due to lower assets under management and higher compensation expenses (as discussed above), partially offset by lower Non-compensation Expenses and lower taxes.

 

Distributable Earnings is a non-GAAP financial measure. For reconciliations of Distributable Earnings to the respective GAAP Net Losses for the periods described above, please see Exhibits 3 through 6 of the financial tables that accompany this press release. Additionally, please see the discussion of "Non-GAAP and Segment Financial Measures" at the end of this press release.

 

 

Assets Under Management

 

Och-Ziff's assets under management were $22.3 billion as of September 30, 2009, 2% higher than the $21.9 billion in assets under management as of June 30, 2009 and 29% lower than the $31.2 billion in assets under management as of September 30, 2008. The $8.9 billion year-over-year decrease was driven by net outflows of $9.3 billion, partially offset by performance-related appreciation of $424 million during the period. During the 2009 third quarter, the $358 million increase in assets under management was driven by performance-related appreciation of approximately $1.5 billion, partially offset by net outflows of approximately $1.1 billion. The net outflows for the 2009 third quarter included redemption requests received for June 30, 2009, but excluded redemption requests received for September 30, 2009 as these redemptions were reflected in assets under management as of October 1, 2009.

 

Assets under management as of October 1, 2009 were $22.1 billion, which reflected redemption requests received for September 30, 2009 (net of October 1, 2009 capital inflows) of approximately $200 million. Virtually all redemptions for a quarter generally are paid on the first day of the month following the quarter in which the redemption notice was submitted, and capital inflows for that month are accepted on the same day. The Company believes that redemptions have now normalized to historical levels for the hedge fund industry as a whole as market conditions have further stabilized and institutional investor confidence has improved.

 

Estimated assets under management as of November 1, 2009 were $22.6 billion, which reflected November 1, 2009 capital inflows (net of redemption requests received for October 31, 2009) of approximately $400 million, and performance-related appreciation of approximately $100 million.

 

Assets under management by fund:

 

                                                            % Change (1)
                                                        ----------------------
                                                        Sep. 2009   Sep. 2009
                             Sep. 30, June 30, Sep. 30,     vs.         vs.
    (dollars in billions)      2009     2009     2008    Jun. 2009   Sep. 2008
                               ----     ----     ----    ---------   ---------
    OZ Master Fund             14.8     14.4     18.8        2%        -22%
    OZ Europe Master Fund       3.0      3.0      5.8        0%        -49%
    OZ Asia Master Fund         1.3      1.4      3.2       -5%        -59%
    OZ Global Special
     Investments Master Fund    2.0      1.9      2.0        2%         -2%
    Other (1)(2)                1.2      1.2      1.4       NM          NM

    (1) Rounding differences may occur.
    (2) Includes real estate funds, managed accounts and other funds not
        significant to the Company's assets under management.

 

 

Investment Performance

 

In the 2009 third quarter, performance-related appreciation was due primarily to attractive investment opportunities globally in long/short equities, convertible arbitrage, credit and structured credit.

 

Performance by fund(1):

 

                                                   2009
                                 -------------------------------------------
                                 July   August   September    3Q      YTD
                                 -----  ------   ---------  ------   ------
    OZ Master Fund               3.26%   1.37%      2.51%    7.30%   20.49%
    OZ Europe Master Fund        2.36%   2.06%      3.28%    7.90%   15.47%
    OZ Asia Master Fund          9.50%   0.24%      1.70%   11.63%   26.36%
    OZ Global Special
     Investments Master Fund     1.55%   0.33%      1.47%    3.38%    7.09%

    (1) Please see important disclosures on Exhibit 10 of the financial
        supplement accompanying this press release.

 

ECONOMIC INCOME OF THE OCH-ZIFF FUNDS SEGMENT

 

The Company conducts substantially all of its business through the Och-Ziff Funds segment, which is currently the Company's only reportable segment. This segment provides management and advisory services to the Company's hedge funds and separately managed accounts.

 

The measures discussed below are presented on an Economic Income basis. For reconciliations of these segment measures to the respective GAAP measures, please see Exhibits 3 through 6 of the financial tables that accompany this press release. Additionally, please see the discussion of "Non-GAAP and Segment Financial Measures" at the end of this press release.

 

Total Revenues - Economic Income Basis

 

Total Revenues for the 2009 third quarter were $89.6 million, a 41% decrease from Total Revenues for the 2008 third quarter of $153.0 million. Management Fees were $86.3 million, 42% lower than Management Fees in the prior year period of $147.7 million.

 

Total Revenues for the first nine months of 2009 were $267.3 million, a 40% decrease from Total Revenues for the first nine months of 2008 of $446.7 million. Management Fees were $263.2 million, 40% lower than Management Fees in the prior year period of $438.0 million.

 

Total Revenues were lower year-over-year for both periods as a result of lower Management Fees due to the decline in assets under management, which was driven by performance-related depreciation in the second half of 2008 and investor redemptions in the fourth quarter of 2008 and first half of 2009.

 

Compensation and Benefits - Economic Income Basis

 

Compensation and Benefits expenses for the 2009 third quarter totaled $23.5 million, 18% lower than Compensation and Benefits expense for the 2008 third quarter of $28.8 million. The year-over-year decrease was attributable to lower salaries and benefits expense due to lower headcount as assets under management declined. The decrease was also attributable to a lower level of one-time, non-recurring bonus payments as well as lower guaranteed bonus expense due to reduced hiring activity. These factors were partially offset by the $5.9 million expense recorded in the 2009 third quarter for the estimated, annual discretionary cash bonuses the Company anticipates paying its employees in the Och-Ziff Funds segment in the fourth quarter (as discussed above).

 

Compensation and Benefits expenses for the first nine months of 2009 totaled $86.5 million, 12% higher than Compensation and Benefits expenses for the first nine months of 2008 of $77.0 million. The year-over-year increase for this period was due primarily to the $30.5 million expense recorded in the 2009 second and third quarters for the estimated, annual discretionary cash bonuses the Company anticipates paying its employees in the Och-Ziff Funds segment in the fourth quarter (as discussed above). Partially offsetting this increase was the year-over-year decline in salaries and benefits expense due to lower headcount as assets under management declined. Additionally there was a lower level of one-time, non-recurring bonus payments, as well as lower guaranteed bonus accruals due to reduced hiring activity.

 

Non-compensation Expenses - Economic Income Basis

 

Non-compensation Expenses for the 2009 third quarter were $22.3 million, a 27% decrease from Non-compensation Expenses for the 2008 third quarter of $30.5 million. Non-compensation Expenses for the first nine months of 2009 were $68.1 million, a 28% decrease from Non-compensation Expenses for the first nine months of 2008 of $95.0 million.

 

The decrease in both periods was driven principally by lower professional services fees and lower business development costs. Also contributing to the decrease was lower interest expense on the Company's variable rate borrowings due to the decline in LIBOR. The overall decline in Non-compensation Expenses in both periods was partially offset by higher occupancy expense related to the expansion of leased office space, and higher insurance costs.

 

Economic Income

 

Economic Income for the Och-Ziff Funds segment for the 2009 third quarter was $43.8 million, compared with $93.8 million for the 2008 third quarter. Economic Income for the Och-Ziff Funds segment for the first nine months of 2009 was $112.6 million, compared with $274.7 million for the first nine months of 2008.

 

 

ECONOMIC INCOME OF THE COMPANY'S OTHER OPERATIONS (NON-GAAP)

 

The Company's Other Operations are comprised of its real estate business, which manages and provides advisory services to its real estate funds, and investments in new businesses established to expand certain of the Company's private investment platforms. The businesses within Other Operations are currently in early growth stages, and are not included in the results of the Och-Ziff Funds segment.

 

Economic Income for the Company's Other Operations for the 2009 third quarter was a net loss of $4.3 million, compared with a net loss of $1.6 million for the 2008 third quarter. Economic Income for the Company's Other Operations for the first nine months of 2009 was a net loss of $12.8 million, compared with a net loss of $5.0 million for the first nine months of 2008. The increase in the Economic Income net losses for the 2009 third quarter and first nine months was principally the result of compensation costs associated with the Company's Asia real estate business, as well as the expense recorded during the 2009 second and third quarters for the estimated, annual discretionary cash bonuses the Company anticipates paying the employees in its domestic real estate business in the fourth quarter of 2009 (as discussed above). For the 2009 third quarter and first nine months, this expense was $0.2 million and $0.9 million, respectively. The Economic Income net losses for the 2008 third quarter and first nine months were primarily due to the net losses from the Company's share of the start-up costs associated with its African joint venture, which more than offset the Economic Income earned in the Company's domestic real estate business.

 

Economic Income for Other Operations as discussed above is a non-GAAP measure. For reconciliations of Economic Income of the Company's Other Operations to the respective GAAP Net Losses for the periods described above, please see Exhibits 3 through 6 of the financial tables that accompany this press release. Additionally, please see the discussion of "Non-GAAP and Segment Financial Measures" at the end of this press release.

 

ECONOMIC INCOME OF THE TOTAL COMPANY (NON-GAAP)

 

Economic Income for the Total Company for the 2009 third quarter was $39.5 million, a 57% decrease from Economic Income for the 2008 third quarter of $92.1 million. Economic Income for the Total Company for the first nine months of 2009 was $99.8 million, a 63% decrease from Economic Income for the first nine months of 2008 of $269.7 million.

 

Economic Income for the Total Company as discussed above is a non-GAAP measure. For reconciliations of Economic Income for the Total Company to the respective GAAP Net Losses for the periods described above, please see Exhibits 3 through 6 of the financial tables that accompany this press release. Additionally, please see the discussion of "Non-GAAP and Segment Financial Measures" at the end of this press release.

 

 

CAPITAL

 

As of September 30, 2009, the number of Class A Shares outstanding was 79,830,851. For purposes of calculating Distributable Earnings per Share, the Company assumes that all Partner Units (as defined below) and RSUs outstanding as of September 30, 2009 have been converted on a one-to-one basis into Class A Shares. For the third quarter and first nine months ended September 30, 2009, the total weighted-average Adjusted Class A Shares outstanding were 403,594,032 and 403,235,945, respectively.

 

 

DIVIDEND

 

The Board of Directors of Och-Ziff declared a 2009 third quarter dividend of $0.07 per Class A Share, to be paid on November 10, 2009 to holders of record at the close of business on October 1, 2009.

 

For U.S. federal income tax purposes, the dividend will be treated as a partnership distribution. Based on the best information currently available, the Company estimates that when calculating withholding taxes, the entire amount of the 2009 third quarter dividend will be treated as U.S. source dividend income.

 

Non-U.S. holders of Class A Shares are generally subject to U.S. federal withholding tax at a rate of 30% (subject to reduction by applicable treaty or other exception) on their share of U.S. source dividends and certain other types of U.S. source income realized by the Company. With respect to interest, however, no withholding is generally required if proper certification (on an IRS Form W-8) of a beneficial owner's foreign status has been filed with the withholding agent. In addition, non-U.S. holders must generally provide the withholding agent with a properly completed IRS Form W-8 to obtain any reduction in withholding.

 

                         *          *          *          *

 

Och-Ziff will host a conference call today, November 3, 2009, at 8:30 a.m. Eastern Time to discuss the Company's 2009 third quarter results. The call will be open to the public and can be accessed by dialing 888-713-4214 (callers inside the U.S.) or 617-213-4866 (callers outside the U.S.). The number should be dialed at least ten minutes prior to the start of the call. The passcode for the call will be 72523219. A simultaneous webcast of the call will be available to the public on a listen-only basis on the For Shareholders page of the Company's website at www.ozcap.com.

 

For those unable to listen to the live broadcast, a replay will be available by dialing 888-286-8010 (callers inside the U.S.) or 617-801-6888 (callers outside the U.S.), passcode 54636117, beginning approximately two hours after the event for two weeks. A webcast replay of the event will also be available on the For Shareholders page of the Company's website.

 

                         *          *          *          *

 

Non-GAAP and Segment Financial Measures

 

In addition to analyzing the Company's results on a GAAP basis, Och-Ziff's management also reviews the Company's results on an "Economic Income basis." Economic Income excludes the adjustments described below that are required for presentation of the Company's results on a GAAP basis, but that management does not consider when evaluating the operating performance of the Company in any given period. Management therefore uses Economic Income as the basis on which it evaluates the performance of the Company's business and makes resource allocation and other operating decisions. In addition, management believes that Economic Income provides a more comparable view of the Company's operating performance from period to period. Management considers it important that investors review the same operating information that it uses.

 

Economic Income is a measure of pre-tax operating performance that excludes the following from the Company's GAAP Net Loss:

 

    --  income allocations to the Company's partners and Ziff Brothers
        Investments (the "Ziffs") on their direct interests in the Och-Ziff
        Operating Group. Management reviews operating performance at the
        Och-Ziff Operating Group level, where substantially all of the Company's
        operations are performed, prior to making any income allocations;
    --  reorganization expenses related to the Company's IPO, equity-based
        compensation expenses and depreciation and amortization expenses, as
        management does not consider these non-cash expenses when evaluating
        operating performance;
    --  changes in the tax receivable agreement liability and gain on early
        retirement of debt, as management does not consider these items to be
        reflective of the Company's operating performance;
    --  net earnings (losses) on the deferred balances and investments in
        Och-Ziff funds, as these amounts primarily relate to earnings (losses)
        on amounts due to the Company's partners and the Ziffs for pre-IPO
        deferred or reinvested incentive income, and earnings (losses) on
        amounts due to employees under deferred cash compensation arrangements,
        and as such are not reflective of the Company's operating performance;
        and

    --  amounts related to the consolidated Och-Ziff funds, including the
        related eliminations of management fees and incentive income, as
        management reviews the total amount of management fees and incentive
        income earned from the Och-Ziff funds in relation to total assets under
        management and fund performance.

 

In addition, deferred cash compensation expense is recognized in the period in which it is awarded, as management determines the total amount of compensation based on the Company's performance in the year of the award.

 

Management evaluates Economic Income for the Och-Ziff Funds segment, the Company's one reportable segment under GAAP, and for the Company's Other Operations. Economic Income for Other Operations is a non-GAAP measure that is calculated on the same basis as the methodology that is used to calculate Economic Income for the Och-Ziff Funds segment. Management also evaluates Economic Income for the Total Company, which is a non-GAAP measure that equals the sum of Economic Income for the Och-Ziff Funds segment and Other Operations. In addition, as a result of the adjustments described above, Management Fees, Compensation and Benefits, Non-compensation Expenses and Net Loss (Income) Allocated to Partners' and Others' Interests in Income of Consolidated Subsidiaries are presented on an Economic Income basis for Other Operations and the Total Company and are also Non-GAAP measures. No adjustments to the GAAP basis have been made for Incentive Income, Other Revenues and Net Losses on Joint Ventures. For reconciliations of these Non-GAAP measures to the respective GAAP measures, please see Exhibits 3 through 6 of the financial tables that accompany this press release.

 

Distributable Earnings is a non-GAAP measure of after-tax operating performance and equals Economic Income for the Total Company (as defined above) less Adjusted Income Taxes. Adjusted Income Taxes are estimated assuming the conversion of all outstanding Partner Units into Class A Shares, on a one-to-one basis. Therefore, all income (loss) of the Och-Ziff Operating Group allocated to the partners is treated as if it were allocated to Och-Ziff Capital Management Group LLC. Partner Units represent interests in the Och-Ziff Operating Group held by the partners and the Ziffs, including the Group A Units and other non-equity interests. Distributable Earnings per Share is equal to Distributable Earnings divided by the weighted-average number of Adjusted Class A Shares. Adjusted Class A Shares are determined assuming all Partner Units and RSUs were converted on a one-to-one basis into Class A Shares. Management uses Distributable Earnings, among other financial data, to determine the earnings available to distribute as dividends to holders of the Company's Class A Shares and to the Company's partners and the Ziffs with respect to their Partner Units.

 

The Company's non-GAAP financial measures should not be considered as alternatives to the Company's GAAP Net Loss or cash flow from operations, or as indicative of liquidity or the cash available to fund operations.

 

Reconciliations of these non-GAAP financial measures to the most directly comparable financial measures calculated and presented in accordance with GAAP are included in the tables attached to this press release.

 

                         *          *          *          *

 

Forward-Looking Statements

 

The information contained in this press release may contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 that reflect the current views of the Company with respect to, among other things, its future financial or business performance, events, strategies or expectations, including but not limited to its ability to generate returns and preserve capital and its ability to expand its investment platforms. Such forward-looking statements are generally identified by the use of words such as "outlook," "believe," "expect," "potential," "continue," "may," "will," "should," "could," "seeks," "approximately," "predicts," "intends," "plans," "estimates," "anticipates," "opportunity," "assume," "remain," "sustain," "achieve" or the negative version of those words or other comparable words.

 

Any forward-looking statements contained in this press release are based upon historical performance of the Company and its subsidiaries and on current plans, estimates and expectations of the Company and its subsidiaries. The inclusion of this forward-looking information should not be regarded as a representation by the Company or any other person that the future plans, estimates or expectations contemplated by the Company will be achieved. Such forward-looking statements are subject to various risks and uncertainties, including but not limited to global and domestic market and business conditions, the Company's ability to successfully compete for fund investors, talent and investment opportunities, successful formulation and execution of its business and growth strategies, the Company's ability to appropriately manage conflicts of interest, and tax and other regulatory factors relevant to the Company's structure and status as a public company, as well as assumptions relating to the Company's operations, financial results, financial condition, business prospects, growth strategy and liquidity.

 

If one or more of these or other risks or uncertainties materialize, or if the Company's assumptions prove to be incorrect, the Company's actual results may vary materially from those indicated in these statements. These factors should not be construed as exhaustive and should be read in conjunction with the other cautionary statements and risks that are included in the Company's filings with the Securities and Exchange Commission, including but not limited to the Company's Annual Report on Form 10-K for the year ended December 31, 2008. Any forward-looking statements contained in this press release are made only as of the date hereof. The Company does not undertake any obligation to publicly update or review any forward-looking statement, whether as a result of new information, future developments or otherwise.

 

This press release does not constitute an offer of any Och-Ziff fund.

 

                         *          *          *          *

 

About Och-Ziff Capital Management Group LLC

Och-Ziff Capital Management Group LLC is one of the world's largest institutional alternative asset managers with offices in New York, London, Hong Kong, Tokyo, Bangalore and Beijing. Och-Ziff's funds seek to deliver consistent, positive, risk-adjusted returns throughout market cycles, with a strong focus on capital preservation. Och-Ziff's multi-strategy approach combines global investment strategies, including merger arbitrage, convertible and derivative arbitrage, equity restructuring, credit and distressed investments, private investments and real estate.

 

As of November 1, 2009, Och-Ziff had approximately $22.6 billion in assets under management with approximately 600 investor relationships. For more information, please visit www.ozcap.com.

 

 

 

                                    Exhibit 1
                      OCH-ZIFF CAPITAL MANAGEMENT GROUP LLC
                Consolidated Statements of Operations (Unaudited)
                (dollars in thousands, except per share amounts)

                               Three Months Ended         Nine Months Ended
                                  September 30,              September 30,
                               ------------------         -----------------
                                2009         2008         2009         2008
                                ----         ----         ----         ----
    Revenues
      Management fees        $88,127     $148,976     $268,598     $441,770
      Incentive income         3,071        4,373        3,336        5,483
      Other revenues             355          925          908        3,179
      Income of consolidated
       Och-Ziff funds         10,127        2,768       21,629        7,654
                              ------        -----       ------        -----
      Total Revenues         101,680      157,042      294,471      458,086
                             -------      -------      -------      -------
    Expenses
      Compensation and
       benefits               64,074       50,377      191,975      155,388
      Allocations to non-
       equity partner
       interests               8,052       (3,039)      12,627         (865)
      Reorganization
       expenses              417,486      425,585    1,262,171    1,276,753
      Profit sharing             663         (305)         954       (1,736)
      Interest expense         2,168        7,118       10,823       24,791
      General,
       administrative and
       other                  40,687       24,732       84,069       83,771
      Expenses of
       consolidated
       Och-Ziff funds            880        1,043        2,776        2,400
                                 ---        -----        -----        -----
      Total Expenses         534,010      505,511    1,565,395    1,540,502
                             -------      -------    ---------    ---------

    Other Income (Loss)
      Net earnings
       (losses) on
       deferred balances      20,840      (18,776)      24,270      (18,975)
      Net gains (losses)
       on investments in
       Och-Ziff funds and
       joint ventures            730       (2,049)       1,036       (6,020)
      Gain on early
       retirement of debt          -            -        2,013            -
      Net gains (losses)
       of consolidated
       Och-Ziff funds            (47)       1,290         (145)         787
                                 ---        -----         ----          ---
      Total Other Income
       (Loss)                 21,523      (19,535)      27,174      (24,208)
                              ------      -------       ------      -------

    Loss before Income
     Taxes                  (410,807)    (368,004)  (1,243,750)  (1,106,624)
    Income taxes             (20,889)      14,735      (17,611)      22,696
                             -------       ------      -------       ------
    Consolidated Net
     Loss                  $(389,918)   $(382,739) $(1,226,139) $(1,129,320)
                           =========    =========  ===========  ===========

    Net Loss Allocated
     to Partners' and
     Others' Interests
     in Income of
     Consolidated
     Subsidiaries          $(309,891)   $(313,295)   $(975,945)   $(730,957)
                           =========    =========    =========    =========

    Net Loss Allocated
     to Class A
     Shareholders           $(80,027)    $(69,444)   $(250,194)   $(398,363)
                            ========     ========    =========    =========


    Net Loss per Class
     A Share
      Basic                   $(1.02)      $(0.94)      $(3.23)      $(5.37)
                              ======       ======       ======       ======
      Diluted                 $(1.06)      $(1.07)      $(3.25)      $(5.37)
                              ======       ======       ======       ======

    Weighted-Average
     Class A Shares
     Outstanding
      Basic (1)           78,818,314   74,138,572   77,398,416   74,138,572
                          ==========   ==========   ==========   ==========
      Diluted            387,874,793  385,238,096  387,719,637   74,138,572
                         ===========  ===========  ===========   ==========

    (1)  Includes fully-vested RSUs that have not been exchanged into Class A
         Shares as of the end of the period.



                                    Exhibit 2
                      OCH-ZIFF CAPITAL MANAGEMENT GROUP LLC
                       Economic Income Summary (Unaudited)
                             (dollars in thousands)

                                 Three Months Ended September 30, 2009
                                 -------------------------------------
                                                  Other          Total
                                Och-Ziff       Operations        Company
    Economic Income Basis  Funds Segment (1) (Non-GAAP) (2)  (Non-GAAP) (2)
    ---------------------  ----------------- --------------  --------------

    Management fees                  $86,262         $1,312         $87,574
    Incentive income                   3,071              -           3,071
    Other revenues                       268             87             355
    Total Economic Income
     revenues                         89,601          1,399          91,000

    Compensation and
     benefits                         23,539          4,578          28,117
    Non-compensation
     expenses                         22,255            811          23,066
    Total Economic Income
     expenses                         45,794          5,389          51,183

    Net losses on joint
     ventures (3)                          -           (244)           (244)
    Net loss (income)
     allocated to
     partners' and others'
     interests in income
     of consolidated
     subsidiaries (4)                      -            (47)            (47)
    Economic Income                   43,807         (4,281)         39,526



                                 Three Months Ended September 30, 2008
                                 -------------------------------------
                                                  Other          Total
                                Och-Ziff       Operations        Company
    Economic Income Basis  Funds Segment (1) (Non-GAAP) (2)  (Non-GAAP) (2)
    ---------------------  ----------------- --------------  --------------

    Management fees                 $147,747         $1,312        $149,059
    Incentive income                   4,373              -           4,373
    Other revenues                       919              6             925
    Total Economic Income
     revenues                        153,039          1,318         154,357

    Compensation and
     benefits                         28,813          1,015          29,828
    Non-compensation
     expenses                         30,463            283          30,746
    Total Economic Income
     expenses                         59,276          1,298          60,574

    Net losses on joint
     ventures (3)                          -         (1,544)         (1,544)
    Net loss (income)
     allocated to
     partners' and others'
     interests in income
     of consolidated
     subsidiaries (4)                      -           (107)           (107)
    Economic Income                   93,763         (1,631)         92,132



                                  Nine Months Ended September 30, 2009
                                  ------------------------------------
                                                  Other          Total
                                Och-Ziff       Operations        Company
    Economic Income Basis  Funds Segment (1) (Non-GAAP) (2)  (Non-GAAP) (2)
    ---------------------  ----------------- --------------  --------------

    Management fees                 $263,209         $3,953        $267,162
    Incentive income                   3,336              -           3,336
    Other revenues                       713            195             908
    Total Economic Income
     revenues                        267,258          4,148         271,406

    Compensation and
     benefits                         86,502         12,995          99,497
    Non-compensation
     expenses                         68,149          2,717          70,866
    Total Economic Income
     expenses                        154,651         15,712         170,363

    Net losses on joint
     ventures (3)                          -         (1,236)         (1,236)
    Net loss (income)
     allocated to
     partners' and others'
     interests in income
     of consolidated
     subsidiaries (4)                      -             28              28
    Economic Income                  112,607        (12,772)         99,835



                                  Nine Months Ended September 30, 2008
                                  ------------------------------------
                                                  Other          Total
                                Och-Ziff       Operations        Company
    Economic Income Basis  Funds Segment (1) (Non-GAAP) (2)  (Non-GAAP) (2)
    ---------------------  ----------------- --------------  --------------

    Management fees                 $438,034         $3,934        $441,968
    Incentive income                   5,483              -           5,483
    Other revenues                     3,149             30           3,179
    Total Economic Income
     revenues                        446,666          3,964         450,630

    Compensation and
     benefits                         76,989          1,674          78,663
    Non-compensation
     expenses                         94,967            632          95,599
    Total Economic Income
     expenses                        171,956          2,306         174,262

    Net losses on joint
     ventures (3)                          -         (6,144)         (6,144)
    Net loss (income)
     allocated to
     partners' and others'
     interests in income
     of consolidated
     subsidiaries (4)                      -           (524)           (524)
    Economic Income                  274,710         (5,010)        269,700

    (1)  The Och-Ziff Funds segment is the Company's only reportable segment.
         Management uses Economic Income to evaluate the financial performance
         of and to make operating decisions for the segment. For
         reconciliations of these segment measures to the nearest U.S. GAAP
         measures, see Exhibits 3 through 6.
    (2)  Each of the measures below is a non-GAAP financial measure, with the
         exception of incentive income, other revenues and net losses on joint
         ventures, for which no adjustments to the U.S. GAAP basis have been
         made. Management calculates non-GAAP financial measures on an
         Economic Income basis for the Company's Other Operations and for the
         Company as a whole to assess the financial performance of the
         Company's entire business. For reconciliations of these non-GAAP
         measures to the nearest U.S. GAAP measures, see Exhibits 3 through 6.
    (3)  Represents the Company's losses in joint ventures established to
         expand certain of the Company's private investments platforms.
    (4)  Represents the residual interests in the domestic real estate
         management business not owned by the Company.



                                      Exhibit 3
                      OCH-ZIFF CAPITAL MANAGEMENT GROUP LLC
     Reconciliation of Non-GAAP and Segment Financial Measures to U.S. GAAP
                                     Measures
                 (dollars in thousands, except per share amount)

                                     OCH-ZIFF FUNDS SEGMENT
                                     ----------------------
                                 Reconciling Adjustments (1)
                                 ---------------------------
    Three Months
     Ended           Economic                                         U.S.
     September 30,    Income         Funds           Other            GAAP
     2009           Basis (2)    Consolidation    Adjustments        Basis
    --------------  ---------    -------------    -----------        -----

    Management
     fees             $86,262          $(56)        $609  (a)       $86,815
    Incentive
     income             3,071             -            -              3,071
    Other revenues        268             -            -                268
    Income of
     consolidated
     Och-Ziff funds         -             -            -                  -
    Total revenues     89,601           (56)         609             90,154

    Compensation
     and benefits      23,539             -       29,197   (b) (c)   52,736
    Allocations to
     non-equity
     partner
     interests              -             -        8,052   (d)        8,052
    Reorganization
     expenses               -             -      417,486   (e)      417,486
    Profit sharing          -             -          663   (f)          663
    Interest
     expense            2,168             -            -              2,168
    General,
     administrative
     and other         20,087             -       19,600   (a) (g)   39,687
    Expenses of
     consolidated
     Och-Ziff funds         -            11            -                 11
    Total expenses     45,794            11      474,998            520,803

    Net earnings
     (losses) on
     deferred
     balances and
     investments in
     Och-Ziff funds
     and joint
     ventures               -             -       21,814   (h)       21,814
    Net gains
     (losses) of
     consolidated
     Och-Ziff funds         -           (57)           -                (57)

    Income taxes            -             -      (21,077)  (g)      (21,077)

    Net loss
     (income)
     allocated to
     partners' and
     others'
     interests in
     income of
     consolidated
     subsidiaries           -           124      318,776   (i)      318,900

    Net Income
     (Loss)
     Allocated to
     Class A
     Shareholders      43,807             -     (112,722)           (68,915)




                                         OTHER OPERATIONS
                                         ----------------
                                      Reconciling Adjustments (1)
                                      ---------------------------
    Three Months       Economic
     Ended              Income                                          U.S.
     September 30,       Basis            Funds          Other          GAAP
     2009           (Non-GAAP) (3)    Consolidation   Adjustments      Basis
    --------------  --------------    -------------   -----------      -----

    Management
     fees                $1,312             $-           $-         $1,312
    Incentive
     income                   -              -            -              -
    Other revenues           87              -            -             87
    Income of
     consolidated
     Och-Ziff funds           -         10,127            -         10,127
    Total revenues        1,399         10,127            -         11,526

    Compensation
     and benefits         4,578              -        6,760   (c)   11,338
    Allocations to
     non-equity
     partner
     interests                -              -            -              -
    Reorganization
     expenses                 -              -            -              -
    Profit sharing            -              -            -              -
    Interest
     expense                  -              -            -              -
    General,
     administrative
     and other              811              -          189   (g)    1,000
    Expenses of
     consolidated
     Och-Ziff funds           -            869            -            869
    Total expenses        5,389            869        6,949         13,207

    Net earnings
     (losses) on
     deferred
     balances and
     investments in
     Och-Ziff funds
     and joint
     ventures              (244)           (99)          99   (h)     (244)
    Net gains
     (losses) of
     consolidated
     Och-Ziff funds           -             10            -             10

    Income taxes              -              -          188   (g)      188

    Net loss
     (income)
     allocated to
     partners' and
     others'
     interests in
     income of
     consolidated
     subsidiaries           (47)        (9,169)         207   (i)   (9,009)

    Net Income
     (Loss)
     Allocated to
     Class A
     Shareholders        (4,281)             -       (6,831)       (11,112)



                                                      TOTAL COMPANY
                                                      -------------

                                                  Economic
                                                   Income
                                                    Basis      U.S. GAAP
    Three Months Ended September 30, 2009      (Non-GAAP) (3)    Basis
    -------------------------------------      --------------  ---------

    Management fees                                $87,574    $88,127
    Incentive income                                 3,071      3,071
    Other revenues                                     355        355
    Income of consolidated Och-Ziff funds                -     10,127
    Total revenues                                  91,000    101,680

    Compensation and benefits                       28,117     64,074
    Allocations to non-equity partner
     interests                                           -      8,052
    Reorganization expenses                              -    417,486
    Profit sharing                                       -        663
    Interest expense                                 2,168      2,168
    General, administrative and other               20,898     40,687
    Expenses of consolidated Och-Ziff funds              -        880
    Total expenses                                  51,183    534,010

    Net earnings (losses) on deferred
     balances and investments in Och-Ziff funds
     and joint ventures                               (244)    21,570
    Net gains (losses) of consolidated
     Och-Ziff funds                                      -        (47)

    Income taxes                                         -    (20,889)

    Net loss (income) allocated to partners'
     and others' interests in income of
     consolidated subsidiaries                         (47)   309,891

    Net Income (Loss) Allocated to
       Class A Shareholders                         39,526    (80,027)
    Adjusted Income Taxes - Non-GAAP (4)            (5,357)
                                                    ------
    Distributable Earnings - Non-GAAP              $34,169
                                                   =======

    Weighted-Average Class A Shares
     Outstanding                                78,818,314
    Weighted-Average Partner Units             309,074,414
    Weighted-Average Class A Restricted Share
     Units (RSUs)                               15,701,304
                                                ----------
    Weighted-Average Adjusted Class A Shares   403,594,032
                                               ===========

    Distributable Earnings Per Adjusted
       Class A Share - Non-GAAP                       0.08
                                                      ====

    (1)  See Exhibit 7 for a description of the adjustments made to arrive at
         Total Company U.S. GAAP Net Loss.
    (2)  The Och-Ziff Funds segment is the Company's only reportable segment.
         Management uses Economic Income to evaluate the financial performance
         of and to make operating decisions for the segment.
    (3)  Each of the measures below is a non-GAAP financial measure, with the
         exception of incentive income, other revenues and net losses on joint
         ventures, for which no adjustments to the U.S. GAAP basis have been
         made. Management calculates non-GAAP financial measures on an
         Economic Income basis for the Company's Other Operations and for the
         Company as a whole to assess the financial performance of the
         Company's entire business.
    (4)  Presents an estimate of income tax expense by assuming the conversion
         of all outstanding Partner Units into Class A Shares, on a one-to-one
         basis. Therefore, all income (loss) of the Och-Ziff Operating Group
         allocated to the partners is treated as if it were allocated to Och-
         Ziff Capital Management Group LLC.



                                      Exhibit 4
                        OCH-ZIFF CAPITAL MANAGEMENT GROUP LLC
       Reconciliation of Non-GAAP and Segment Financial Measures to U.S. GAAP
                                       Measures
                   (dollars in thousands, except per share amount)

                                       OCH-ZIFF FUNDS SEGMENT
                                       ----------------------
                                    Reconciling Adjustments (1)
                                    ---------------------------
    Three Months
     Ended           Economic                                            U.S.
     September        Income        Funds            Other               GAAP
     30, 2008       Basis (2)   Consolidation      Adjustments          Basis
    ------------    ---------   -------------      -----------          -----

    Management
     fees            $147,747          $(83)             $-          $147,664
    Incentive
     income             4,373             -               -             4,373
    Other
     revenues             919             -               -               919
    Income of
     consolidated
     Och-Ziff funds         -            72               -                72
    Total
     revenues         153,039           (11)              -           153,028

    Compensation
     and benefits      28,813             -          19,686   (b) (c)  48,499
    Allocations
     to non-
     equity
     partner
     interests              -             -          (3,039)  (d)      (3,039)
    Reorganization
     expenses               -             -         425,585   (e)     425,585
    Profit
     sharing                -             -            (305)  (f)        (305)
    Interest
     expense            7,118             -               -             7,118
    General,
     administrative
     and other         23,345             -             915   (g)      24,260
    Expenses of
     consolidated
     Och-Ziff funds         -           146               -               146
    Total
     expenses          59,276           146         442,842           502,264

    Net earnings
     (losses) on
     deferred
     balances and
     investments
     in Och-Ziff
     funds and
     joint
     ventures               -             -         (19,281)  (h)     (19,281)
    Net gains
    (losses) of
     consolidated
     Och-Ziff funds                    (569)              -              (569)

    Income taxes            -             -          14,716   (g)      14,716

    Net loss
     (income)
     allocated to
     partners' and
     others'
     interests in
     income of
     consolidated
     subsidiaries           -           726         316,445   (i)     317,171

    Net Income
     (Loss)
     Allocated to
     Class A
     Shareholders      93,763             -        (160,394)          (66,631)




                                        OTHER OPERATIONS
                                        ----------------
                                      Reconciling Adjustments (1)
                                      ---------------------------
    Three Months       Economic
     Ended              Income                                         U.S.
     September           Basis            Funds          Other         GAAP
     30, 2008       (Non-GAAP) (3)    Consolidation   Adjustments      Basis
    ------------    --------------    -------------   -----------      -----

    Management
     fees                   $1,312             $-           $-        $1,312
    Incentive
     income                      -              -            -             -
    Other
     revenues                    6              -            -             6
    Income of
     consolidated
     Och-Ziff funds              -          2,696            -         2,696
    Total
     revenues                1,318          2,696            -         4,014

    Compensation
     and benefits            1,015              -          863   (c)   1,878
    Allocations
     to non-
     equity
     partner
     interests                   -              -            -             -
    Reorganization
     expenses                    -              -            -             -
    Profit
     sharing                     -              -            -             -
    Interest
     expense                     -              -            -             -
    General,
     administrative
     and other                 283              -          189   (g)     472
    Expenses of
     consolidated
     Och-Ziff funds              -            897            -           897
    Total expenses           1,298            897        1,052         3,247

    Net earnings
     (losses) on
     deferred
     balances and
     investments
     in Och-Ziff
     funds and
     joint
     ventures               (1,544)           (36)          36   (h)  (1,544)
    Net gains
     (losses) of
     consolidated
     Och-Ziff funds              -          1,859            -         1,859

    Income taxes                 -              -           19   (g)      19

    Net loss
     (income)
     allocated to
     partners' and
     others'
     interests in
     income of
     consolidated
     subsidiaries             (107)        (3,622)        (147)  (i)  (3,876)

    Net Income
     (Loss)
     Allocated to
     Class A
     Shareholders           (1,631)             -       (1,182)       (2,813)




                                                     TOTAL COMPANY
                                                     -------------

                                                  Economic
                                                   Income
                                                    Basis      U.S. GAAP
    Three Months Ended September 30, 2008      (Non-GAAP) (3)    Basis
    -------------------------------------      --------------  ---------

    Management fees                                  $149,059   $148,976
    Incentive income                                    4,373      4,373
    Other revenues                                        925        925
    Income of consolidated Och-Ziff funds                   -      2,768
    Total revenues                                    154,357    157,042

    Compensation and benefits                          29,828     50,377
    Allocations to non-equity partner
     interests                                              -     (3,039)
    Reorganization expenses                                 -    425,585
    Profit sharing                                          -       (305)
    Interest expense                                    7,118      7,118
    General, administrative and other                  23,628     24,732
    Expenses of consolidated Och-Ziff funds                 -      1,043
    Total expenses                                     60,574    505,511

    Net earnings (losses) on deferred
     balances and investments in Och-Ziff funds
     and joint ventures                                (1,544)   (20,825)
    Net gains (losses) of consolidated
     Och-Ziff funds                                         -      1,290

    Income taxes                                            -     14,735

    Net loss (income) allocated to partners'
     and others' interests in income of
     consolidated subsidiaries                           (107)   313,295

    Net Income (Loss) Allocated to
       Class A Shareholders                            92,132    (69,444)
    Adjusted Income Taxes - Non-GAAP (4)              (39,452)
                                                      -------
    Distributable Earnings - Non-GAAP                 $52,680
                                                      =======

    Weighted-Average Class A Shares
     Outstanding                                   74,138,572
    Weighted-Average Partner Units                311,099,524
    Weighted-Average Class A Restricted Share
     Units (RSUs)                                  15,132,928
                                                   ----------
    Weighted-Average Adjusted Class A Shares      400,371,024
                                                  ===========

    Distributable Earnings Per Adjusted
       Class A Share - Non-GAAP                          0.13
                                                         ====


    (1)  See Exhibit 7 for a description of the adjustments made to arrive at
         Total Company U.S. GAAP Net Loss.
    (2)  The Och-Ziff Funds segment is the Company's only reportable segment.
         Management uses Economic Income to evaluate the financial performance
         of and to make operating decisions for the segment.
    (3)  Each of the measures below is a non-GAAP financial measure, with the
         exception of incentive income, other revenues and net losses on joint
         ventures, for which no adjustments to the U.S. GAAP basis have
         been made. Management calculates non-GAAP financial measures on an
         Economic Income basis for the Company's Other Operations and for the
         Company as a whole to assess the financial performance of the
         Company's entire business.
    (4)  Presents an estimate of income tax expense by assuming the conversion
         of all outstanding Partner Units into Class A Shares, on a one-to-one
         basis. Therefore, all income (loss) of the Och-Ziff Operating Group
         allocated to the partners is treated as if it were allocated to Och-
         Ziff Capital Management Group LLC.



                                      Exhibit 5
                        OCH-ZIFF CAPITAL MANAGEMENT GROUP LLC
       Reconciliation of Non-GAAP and Segment Financial Measures to U.S. GAAP
                                       Measures
                   (dollars in thousands, except per share amount)

                                        OCH-ZIFF FUNDS SEGMENT
                                        ----------------------
                                    Reconciling Adjustments (1)
                                    ---------------------------
    Nine Months
     Ended           Economic                                             U.S.
     September        Income        Funds             Other               GAAP
     30, 2009       Basis (2)   Consolidation      Adjustments           Basis
    ------------    ---------   -------------      -----------           -----

    Management
     fees            $263,209         $(167)         $1,622  (a)     $264,664
    Incentive
     income             3,336             -               -             3,336
    Other
     revenues             713             -               -               713
    Income of
     consolidated
     Och-Ziff funds         -             -               -                 -
    Total
     revenues         267,258          (167)          1,622           268,713

    Compensation
     and benefits      86,502             -          74,665   (b) (c) 161,167
    Allocations
     to non-
     equity
     partner
     interests              -             -          12,627   (d)      12,627
    Reorganization
     expenses               -             -       1,262,171   (e)   1,262,171
    Profit
     sharing                -             -             954   (f)         954
    Interest
     expense           10,823             -               -            10,823
    General,
     administrative
     and other         57,326             -          23,466   (a) (g)  80,792
    Expenses of
     consolidated
     Och-Ziff funds         -            19               -                19
    Total
     expenses         154,651            19       1,373,883         1,528,553

    Net earnings
     (losses) on
     deferred
     balances and
     investments
     in Och-Ziff
     funds and
     joint
     ventures               -             -          26,542   (h)      26,542
    Gain on
     early
     retirement
     of debt                -             -           2,013   (g)       2,013
    Net gains
     (losses) of
     consolidated
     Och-Ziff funds         -        (1,744)              -            (1,744)

    Income taxes            -             -         (17,902)  (g)     (17,902)

    Net loss
     (income)
     allocated to
     partners' and
     others'
     interests in
     income of
     consolidated
     subsidiaries           -         1,930         994,260   (i)     996,190

    Net Income
     (Loss)
     Allocated to
     Class A
     Shareholders     112,607             -        (331,544)         (218,937)



                                         OTHER OPERATIONS
                                         ----------------
                                       Reconciling Adjustments (1)
                                       ---------------------------
    Nine Months       Economic
     Ended              Income                                           U.S.
     September 30,       Basis            Funds            Other         GAAP
     2009           (Non-GAAP) (3)    Consolidation     Adjustments     Basis
    --------------  --------------    -------------     -----------     -----

    Management
     fees                   $3,953           $(19)          $-         $3,934
    Incentive
     income                      -              -            -              -
    Other revenues             195              -            -            195
    Income of
     consolidated
     Och-Ziff funds              -         21,629            -         21,629
    Total revenues           4,148         21,610            -         25,758

    Compensation
     and benefits           12,995              -       17,813   (c)   30,808
    Allocations to
     non-equity
     partner
     interests                   -              -            -              -
    Reorganization
     expenses                    -              -            -              -
    Profit sharing               -              -            -              -
    Interest
     expense                     -              -            -              -
    General,
     administrative
     and other               2,717              -          560   (g)    3,277
    Expenses of
     consolidated
     Och-Ziff funds              -          2,757            -          2,757
    Total expenses          15,712          2,757       18,373         36,842

    Net earnings
     (losses) on
     deferred
     balances and
     investments
     in Och-Ziff
     funds and
     joint ventures         (1,236)          (216)         216   (h)   (1,236)
    Gain on early
     retirement of
     debt                        -              -            -              -
    Net gains
     (losses) of
     consolidated
     Och-Ziff funds              -          1,599            -          1,599

    Income taxes                 -              -          291   (g)      291

    Net loss
     (income)
     allocated to
     partners' and
     others'
     interests in
     income of
     consolidated
     subsidiaries               28        (20,236)         (37)  (i)  (20,245)

    Net Income
     (Loss)
     Allocated to
     Class A
     Shareholders          (12,772)             -      (18,485)       (31,257)



                                                     TOTAL COMPANY
                                                     -------------

                                                  Economic
                                                   Income
                                                    Basis      U.S. GAAP
    Nine Months Ended September 30, 2009      (Non-GAAP) (3)    Basis
    -------------------------------------      --------------  ---------

    Management fees                                  $267,162   $268,598
    Incentive income                                    3,336      3,336
    Other revenues                                        908        908
    Income of consolidated Och-Ziff funds                   -     21,629
    Total revenues                                    271,406    294,471

    Compensation and benefits                          99,497    191,975
    Allocations to non-equity partner
     interests                                              -     12,627
    Reorganization expenses                                 -  1,262,171
    Profit sharing                                          -        954
    Interest expense                                   10,823     10,823
    General, administrative and other                  60,043     84,069
    Expenses of consolidated Och-Ziff funds                 -      2,776
    Total expenses                                    170,363  1,565,395

    Net earnings (losses) on deferred
     balances and investments in Och-Ziff funds
     and joint ventures                                (1,236)    25,306
    Gain on early retirement of debt                        -      2,013
    Net gains (losses) of consolidated Och-
     Ziff funds                                             -       (145)

    Income taxes                                            -    (17,611)

    Net loss (income) allocated to partners'
     and others' interests in income of
     consolidated subsidiaries                             28    975,945

    Net Income (Loss) Allocated to
       Class A Shareholders                            99,835   (250,194)
    Adjusted Income Taxes - Non-GAAP (4)              (25,898)
                                                      -------
    Distributable Earnings - Non-GAAP                 $73,937
                                                      =======

    Weighted-Average Class A Shares
     Outstanding                                   77,398,416
    Weighted-Average Partner Units                310,327,265
    Weighted-Average Class A Restricted Share
     Units (RSUs)                                  15,510,264
                                                   ----------
    Weighted-Average Adjusted Class A Shares      403,235,945
                                                  ===========

    Distributable Earnings Per Adjusted
       Class A Share - Non-GAAP                          0.18
                                                         ====


    (1)  See Exhibit 7 for a description of the adjustments made to arrive at
         Total Company U.S. GAAP Net Loss.
    (2)  The Och-Ziff Funds segment is the Company's only reportable segment.
         Management uses Economic Income to evaluate the financial performance
         of and to make operating decisions for the segment.
    (3)  Each of the measures below is a non-GAAP financial measure, with the
         exception of incentive income, other revenues and net losses on joint
         ventures, for which no adjustments to the U.S. GAAP basis have been
         made. Management calculates non-GAAP financial measures on an
         Economic Income basis for the Company's Other Operations and for the
         Company as a whole to assess the financial performance of the
         Company's entire business.
    (4)  Presents an estimate of income tax expense by assuming the conversion
         of all outstanding Partner Units into Class A Shares, on a one-to-one
         basis. Therefore, all income (loss) of the Och-Ziff Operating Group
         allocated to the partners is treated as if it were allocated to Och-
         Ziff Capital Management Group LLC.



                                      Exhibit 6
                        OCH-ZIFF CAPITAL MANAGEMENT GROUP LLC
       Reconciliation of Non-GAAP and Segment Financial Measures to U.S. GAAP
                                       Measures
                   (dollars in thousands, except per share amount)

                                        OCH-ZIFF FUNDS SEGMENT
                                        ----------------------
                                     Reconciling Adjustments (1)
                                     ---------------------------
    Nine Months
     Ended           Economic                                             U.S.
     September        Income        Funds                                 GAAP
     30, 2008       Basis (2)   Consolidation    Other Adjustments       Basis
    ------------    ---------   -------------    -----------------       -----

    Management
     fees            $438,034         $(198)             $-          $437,836
    Incentive
     income             5,483             -               -             5,483
    Other
     revenues           3,149             -               -             3,149
    Income of
     consolidated
     Och-Ziff funds         -           106               -               106
    Total
     revenues         446,666           (92)              -           446,574

    Compensation
     and benefits      76,989             -          75,430   (b) (c) 152,419
    Allocations
     to non-
     equity
     partner
     interests              -             -            (865)  (d)        (865)
    Reorganization
     expenses               -             -       1,276,753   (e)   1,276,753
    Profit
     sharing                -             -          (1,736)  (f)      (1,736)
    Interest
     expense           24,791             -               -            24,791
    General,
     administrative
     and other         70,176             -          12,401   (g)      82,577
    Expenses of
     consolidated
     Och-Ziff funds         -           509               -               509
    Total
     expenses         171,956           509       1,361,983         1,534,448

    Net earnings
     (losses) on
     deferred
     balances and
     investments
     in Och-Ziff
     funds and
     joint
     ventures               -             -         (18,851)  (h)     (18,851)
    Net gains
     (losses) of
     consolidated
     Och-Ziff funds         -        (1,974)              -            (1,974)
    Income taxes            -             -          22,470   (g)      22,470

    Net loss
     (income)
     allocated to
     partners' and
     others'
     interests in
     income of
     consolidated
     subsidiaries           -         2,575         737,837   (i)     740,412

    Net Income
     (Loss)
     Allocated to
     Class A
     Shareholders     274,710             -        (665,467)         (390,757)



                                        OTHER OPERATIONS
                                        ----------------
                                        Reconciling Adjustments (1)
                                        ---------------------------
    Nine Months        Economic
     Ended               Income                                           U.S.
     September 30,       Basis             Funds           Other          GAAP
     2008             (Non-GAAP) (3)   Consolidation    Adjustments      Basis
    --------------    --------------    -------------    -----------     -----

    Management
     fees                   $3,934             $-           $-        $3,934
    Incentive
     income                      -              -            -             -
    Other revenues              30              -            -            30
    Income of
     consolidated
     Och-Ziff funds              -          7,548            -         7,548
    Total revenues           3,964          7,548            -        11,512

    Compensation
     and benefits            1,674              -        1,295   (c)   2,969
    Allocations to
     non-equity
     partner
     interests                   -              -            -             -
    Reorganization
     expenses                    -              -            -             -
    Profit sharing               -              -            -             -
    Interest
     expense                     -              -            -             -
    General,
     administrative
     and other                 632              -          562   (g)   1,194
    Expenses of
     consolidated
     Och-Ziff funds              -          1,891            -         1,891
    Total expenses           2,306          1,891        1,857         6,054

    Net earnings
     (losses) on
     deferred
     balances and
     investments in
     Och-Ziff funds
     and joint
     ventures               (6,144)           (84)          84   (h)  (6,144)
    Net gains
     (losses) of
     consolidated
     Och-Ziff funds              -          2,761            -         2,761

    Income taxes                 -              -          226   (g)     226

    Net loss
     (income)
     allocated to
     partners' and
     others'
     interests in
     income of
     consolidated
     subsidiaries             (524)        (8,334)        (597)  (i)  (9,455)

    Net Income
     (Loss)
     Allocated to
     Class A
     Shareholders           (5,010)             -       (2,596)       (7,606)



                                                     TOTAL COMPANY
                                                     -------------

                                                  Economic
                                                   Income
                                                    Basis      U.S. GAAP
    Nine Months Ended September 30, 2008       (Non-GAAP) (3)    Basis
    -------------------------------------      --------------  ---------

    Management fees                                  $441,968   $441,770
    Incentive income                                    5,483      5,483
    Other revenues                                      3,179      3,179
    Income of consolidated Och-Ziff funds                   -      7,654
    Total revenues                                    450,630    458,086

    Compensation and benefits                          78,663    155,388
    Allocations to non-equity partner
     interests                                              -       (865)
    Reorganization expenses                                 -  1,276,753
    Profit sharing                                          -     (1,736)
    Interest expense                                   24,791     24,791
    General, administrative and other                  70,808     83,771
    Expenses of consolidated Och-Ziff funds                 -      2,400
    Total expenses                                    174,262  1,540,502

    Net earnings (losses) on deferred
     balances and investments in Och-Ziff
     funds and joint ventures                          (6,144)   (24,995)
    Net gains (losses) of consolidated Och-
     Ziff funds                                             -        787

    Income taxes                                            -     22,696

    Net loss (income) allocated to partners'
     and others' interests in income of
     consolidated subsidiaries                           (524)   730,957

    Net Income (Loss) Allocated to
       Class A Shareholders                           269,700   (398,363)
    Adjusted Income Taxes - Non-GAAP (4)             (113,464)
                                                     --------
    Distributable Earnings - Non-GAAP                $156,236
                                                     ========

    Weighted-Average Class A Shares
     Outstanding                                   74,138,572
    Weighted-Average Partner Units                311,099,524
    Weighted-Average Class A Restricted Share
     Units (RSUs)                                  14,765,768
                                                   ----------
    Weighted-Average Adjusted Class A Shares      400,003,864
                                                  ===========

    Distributable Earnings Per Adjusted
       Class A Share - Non-GAAP                          0.39
                                                         ====

    (1)  See Exhibit 7 for a description of the adjustments made to arrive at
         Total Company U.S. GAAP Net Loss.
    (2)  The Och-Ziff Funds segment is the Company's only reportable segment.
         Management uses Economic Income to evaluate the financial performance
         of and to make operating decisions for the segment.
    (3)  Each of the measures below is a non-GAAP financial measure, with the
         exception of incentive income, other revenues and net losses on joint
         ventures, for which no adjustments to the U.S. GAAP basis have been
         made. Management calculates non-GAAP financial measures on an
         Economic Income basis for the Company's Other Operations and for the
         Company as a whole to assess the financial performance of the
         Company's entire business.
    (4)  Presents an estimate of income tax expense by assuming the conversion
         of all outstanding Partner Units into Class A Shares, on a one-to-one
         basis. Therefore, all income (loss) of the Och-Ziff Operating Group
         allocated to the partners is treated as if it were allocated to Och-
         Ziff Capital Management Group LLC.



                                    Exhibit 7
                      OCH-ZIFF CAPITAL MANAGEMENT GROUP LLC
        Description of Adjustments Made to Reconcile Economic Income to U.S.
                                   GAAP Net Loss

    Funds Consolidation
      Economic Income excludes the impacts of consolidated Och-Ziff funds,
      including the related eliminations.

    Other Adjustments
    (a)  Economic Income presents management fees net of recurring
         placement and related service fees on assets under management, as
         management considers these fees a reduction in management fees, not
         an expense.
    (b)  Economic Income recognizes deferred cash compensation expense in
         the period in which it is awarded, as management determines the total
         amount of compensation based on the Company's performance in the year
         of the award.
    (c)  Economic Income excludes equity-based compensation expense, as
         management does not consider these non-cash expenses when evaluating
         the performance of the Company. The Company includes the number of
         shares granted in its Adjusted Class A Share count when determining
         Distributable Earnings Per Share.
    (d)  Economic Income excludes allocations to non-equity partner
         interests.  Management reviewed the performance of the Company before
         it made any allocations to the Company's non-equity founding partners
         for periods prior to the Reorganization. For these periods,
         allocations to the founding partners, other than Mr. Och, were
         treated as expenses for U.S. GAAP purposes. Following the
         Reorganization, only allocations to the founding partners, other than
         Mr. Och, related to earnings on deferred balances are incurred and
         these allocations are excluded from Economic Income.
    (e)  Economic Income excludes Reorganization expenses, which are
         non-cash expenses directly attributable to the reclassification of
         interests held by the founding partners and the Ziffs prior to the
         Reorganization as Och-Ziff Operating Group A Units.
    (f)  Economic Income excludes the profit sharing expense related to
         the Ziffs' interest in the Company. Management reviewed the
         performance of the Company before it made any allocations to the
         Ziffs for periods prior to the Reorganization. Following the
         Reorganization, only profit sharing expense related to the allocation
         of earnings on deferred balances are incurred and these allocations
         are excluded from Economic Income.
    (g)  Economic Income excludes depreciation, changes in the tax
         receivable agreement liability, and gain on early retirement of debt,
         as management does not consider these items when evaluating the
         performance of the Company. Economic Income also excludes income
         taxes as it is a measure of pre-tax performance.
    (h)  Economic Income excludes the net earnings (losses) on the
         deferred balances and investments in Och-Ziff funds, as these amounts
         primarily relate to earnings (losses) on amounts due to affiliates
         for deferred balances, and earnings (losses) on amounts due to
         employees under deferred cash compensation arrangements.
    (i)  Economic Income excludes amounts allocated to the partners and
         the Ziffs on their interests in the Och-Ziff Operating Group, as
         management reviews the performance of the Company at the Och-Ziff
         Operating Group level. The Company conducts substantially all of its
         activities through the Och-Ziff Operating Group.  Additionally,
         Economic Income excludes amounts allocated to investors in
         consolidated Och-Ziff funds, as Economic Income excludes the impacts
         of consolidated Och-Ziff funds.



                                    Exhibit 8
                      OCH-ZIFF CAPITAL MANAGEMENT GROUP LLC
                        Financial Supplement (Unaudited)
                              (dollars in millions)

                                      Three Months Ended  Nine Months Ended
                                         September 30,      September 30,
                                      ------------------  -----------------
                                              2009               2009
                                              ----               ----

    Total Assets Under Management (1)
      Beginning of Period Balance          $21,920            $26,955
      Net Flows                             (1,136)            (8,358)
      Appreciation (Depreciation) (2)        1,494              3,681
                                             -----              -----
      End of Period Balance                $22,278            $22,278
                                           =======            =======

    Total Assets Under Management by Fund
      OZ Master Fund                                          $14,773
      OZ Europe Master Fund                                     2,958
      OZ Asia Master Fund                                       1,327
      OZ Global Special Investments
       Master Fund                                              1,980

    Och-Ziff Funds - Net Returns (3)
      OZ Master Fund                           7.3%              20.5%
      OZ Europe Master Fund                    7.9%              15.5%
      OZ Asia Master Fund                     11.6%              26.4%
      OZ Global Special Investments
       Master Fund                             3.4%               7.1%



                                              Year Ended December 31,
                                              -----------------------
                                         2008     2007     2006     2005
                                         ----     ----     ----     ----

    Total Assets Under Management (1)
      Beginning of Period Balance     $33,387  $22,621  $15,627  $11,251
      Net Flows                          (722)   7,591    4,135    3,117
      Appreciation (Depreciation) (2)  (5,710)   3,175    2,859    1,259
                                       ------    -----    -----    -----
      End of Period Balance           $26,955  $33,387  $22,621  $15,627
                                      =======  =======  =======  =======

    Total Assets Under Management
     by Fund
      OZ Master Fund                  $16,396  $19,771  $15,449  $12,001
      OZ Europe Master Fund             5,084    6,416    3,481    1,887
      OZ Asia Master Fund               2,439    3,852    2,332      605
      OZ Global Special Investments
       Master Fund                      1,910    2,082      195       43

    Och-Ziff Funds - Net Returns (3)
      OZ Master Fund                    -15.9%    11.5%    14.8%     8.8%
      OZ Europe Master Fund             -17.4%    14.8%    22.3%    15.7%
      OZ Asia Master Fund               -30.9%    12.2%    14.0%    14.2%
      OZ Global Special Investments
       Master Fund                       -8.3%    17.2%    13.9%     0.2%

    (1)  Includes deferred incentive income receivable from the offshore
         funds and amounts invested by the Company, its partners and certain
         other affiliated parties for which the Company charged no management
         fees and received no incentive income for the periods presented.
         Amounts presented in this table are not the amounts used to
         calculate Management Fees and Incentive Income for the respective
         periods.
    (2)  Appreciation (depreciation) reflects the aggregate net capital
         appreciation (depreciation) for the entire period and is presented
         on a total return basis, net of all fees and expenses (except
         incentive income on certain unrealized private investments that could
         reduce returns on these investments at the time of realization), and
         includes the reinvestment of all dividends and income. Management
         Fees and Incentive Income vary by product. Past performance is
         no guarantee of future results.
    (3)  Reflects a composite of the monthly return and year-to-date return
         for the feeder funds comprising each of the Company's most
         significant master funds and is presented on a total return basis,
         net of all fees and expenses of the relevant fund (except incentive
         income on certain unrealized special investments that could reduce
         returns at the time of realization), and includes the reinvestment
         of all dividends and income. Performance includes realized and
         unrealized gains and losses attributable to certain private and
         initial public offering investments that are not allocated to all
         investors in the funds. Investors that do not participate in such
         investments or that pay different fees may experience materially
         different returns. Past performance is no guarantee of future
         results.


                                  Exhibit 9
                    OCH-ZIFF CAPITAL MANAGEMENT GROUP LLC
                  Returns of OZ Master Fund During Negative
                        Return Months of S&P 500 Index
                                 (Unaudited)

                                Total Return of      Total Return of OZ
                 Number of          S&P 500            Master Fund
            Months of Negative  During Negative      During Negative
      Year  Returns of S&P 500   Return Months   Return Months of S&P 500
      ----  ------------------   -------------   ------------------------
      1994           3              -8.5%                   1.7%
      1995           1              -0.4%                   0.1%
      1996           2              -6.4%                   3.9%
      1997           3             -13.1%                   4.0%
      1998           3             -17.2%                  -2.7%
      1999           5             -11.8%                   6.2%
      2000           8             -27.1%                  12.0%
      2001           6             -33.2%                   0.4%
      2002           8             -41.9%                  -5.0%
      2003           3              -5.2%                   4.6%
      2004           3              -6.4%                   1.1%
      2005           5              -8.7%                   0.7%
      2006           1              -2.9%                   0.5%
      2007           5             -11.6%                   1.4%
      2008           8             -51.8%                 -16.3%
    3Q09 - YTD       2             -19.1%                   3.4%



    Distribution of Net Monthly Returns since April 1, 1994
    -------------------------------------------------------

            Net Monthly Return      Number of
            of OZ Master Fund         Months
            -----------------         ------
              less than -3%              5
                -2% to -3%               2
                -1% to -2%               3
                0% to -1%               17
                 0% to 1%               61
                 1% to 2%               46
                 2% to 3%               31
                 3% to 4%               13
                 4% to 5%                5
             greater than 5%             3


    Total net return for the OZ Master Fund (the "Fund") represents a
    composite of the average return of the feeder funds that comprise the
    Fund.  Returns are presented on a total return basis, net of all fees and
    expenses (except incentive income on certain unrealized private
    investments that could reduce returns on these investments at the time of
    realization), and include the reinvestment of all dividends and income.
    Performance includes realized and unrealized gains and losses attributable
    to certain private and initial public offering investments that are not
    allocated to all investors in the Fund.  Investors that do not participate
    in such investments or that pay different fees may experience materially
    different returns. Past performance is no guarantee of future results.

    For the period from 1994 through 1997, performance represents the
    performance of Och-Ziff Capital Management, L.P., a Delaware limited
    partnership that was managed by Daniel Och following an investment
    strategy that is substantially similar to that of the Fund.  In addition,
    during this period, performance was calculated by deducting Management
    Fees on a quarterly basis and Incentive Income on a monthly basis.
    Beginning January 1998, performance has been calculated by deducting both
    Management Fees and Incentive Income on a monthly basis from the composite
    returns of the Fund.

    Readers should not assume that there is any material overlap between those
    securities in the portfolio of the Fund and those that comprise the S&P
    500 Index.  It is not possible to invest directly in the S&P 500 Index.
    Returns of the S&P 500 Index have not been reduced by fees and expenses
    associated with investing in securities and include the reinvestment of
    dividends. The S&P 500 Index is an equity index owned and maintained by
    Standard & Poor's, a division of McGraw-Hill, whose value is calculated as
    the free float-weighted average of the share prices of 500 large-cap
    corporations listed on the NYSE and Nasdaq.  The comparison of S&P 500
    Index performance relative to the Fund's performance during months in
    which the S&P 500 Index declined is for the limited purpose of
    illustrating how the Fund has performed during periods of declines in the
    broad equity market.  It should not be considered an indication of how the
    Fund will perform relative to the S&P 500 Index in the future.

    Please note that the Fund's investment objective is not to beat the S&P
    500 Index.  Furthermore, the Fund's performance has frequently trailed
    that of the S&P 500 Index in periods of positive performance.



                                   Exhibit 10
                     OCH-ZIFF CAPITAL MANAGEMENT GROUP LLC
                        Fund Performance (Unaudited) (1)

                                                  2008
                                                  ----
                             January  February   March      April      May
                             -------  --------   -----      -----      ---

    Och-Ziff Funds - Net
     Returns
    OZ Master Fund             -1.12%     1.02%  -0.73%      0.96%    1.11%
    OZ Europe Master Fund      -2.00%     0.81%  -0.54%      0.31%    1.69%
    OZ Asia Master Fund        -1.95%     1.78%  -2.41%     -0.18%   -0.16%
    OZ Global Special
     Investments Master Fund   -0.72%     0.57%  -0.45%      0.64%    0.43%

    S&P 500 Index - Total
     Return (2)                -6.00%    -3.25%  -0.43%      4.87%    1.30%



                                                   2008
                                                   ----
                               June     July    August  September  October
                               ----     ----    ------  ---------  -------

    Och-Ziff Funds - Net
     Returns
    OZ Master Fund             -0.45%    -0.59%  -0.58%     -5.41%   -6.71%
    OZ Europe Master Fund       0.20%    -1.35%  -0.38%     -7.22%   -5.12%
    OZ Asia Master Fund        -2.19%    -1.17%  -4.18%     -7.53%  -11.76%
    OZ Global Special
     Investments Master Fund   -0.34%     0.06%  -0.45%     -2.73%   -2.60%

    S&P 500 Index - Total
     Return (2)                -8.43%    -0.84%   1.45%     -8.91%  -16.80%



                                                          2008
                                                          ----
                                              November  December  FY2008
                                              --------  --------  ------

    Och-Ziff Funds - Net Returns
    OZ Master Fund                               -2.35%    -2.02% -15.92%
    OZ Europe Master Fund                        -2.67%    -2.31% -17.39%
    OZ Asia Master Fund                          -1.69%    -4.13% -30.86%
    OZ Global Special Investments Master Fund    -1.72%    -1.22%  -8.27%

    S&P 500 Index - Total Return (2)             -7.18%     1.06% -37.00%



                                                    2009
                                                    ----
                                     January  February   March    1Q
                                     -------  --------   -----    --

    Och-Ziff Funds - Net Returns
    OZ Master Fund                      3.09%     0.35%  0.88%   4.36%
    OZ Europe Master Fund               0.98%    -1.09% -0.04%  -0.16%
    OZ Asia Master Fund                 2.70%     1.22%  0.38%   4.35%
    OZ Global Special Investments
     Master Fund                        0.84%    -0.49%  0.35%   0.70%

    S&P 500 Index - Total Return (2)   -8.43%   -10.65%  8.76% -11.01%



                                                         2009
                                                         ----
                                              April   May  June    2Q
                                              -----   ---  ----    --

    Och-Ziff Funds - Net Returns
    OZ Master Fund                             1.86% 3.42% 2.14%  7.60%
    OZ Europe Master Fund                      2.48% 3.32% 1.24%  7.20%
    OZ Asia Master Fund                        3.09% 4.62% 0.58%  8.48%
    OZ Global Special Investments Master Fund  0.00% 1.97% 0.88%  2.87%

    S&P 500 Index - Total Return (2)           9.57% 5.59% 0.20% 15.93%



                                                     2009
                                                     ----
                                     July  August  September    3Q    YTD
                                     ----  ------  ---------    --    ---

    Och-Ziff Funds - Net Returns
    OZ Master Fund                   3.26%   1.37%    2.51%   7.30% 20.49%
    OZ Europe Master Fund            2.36%   2.06%    3.28%   7.90% 15.47%
    OZ Asia Master Fund              9.50%   0.24%    1.70%  11.63% 26.36%
    OZ Global Special Investments
     Master Fund                     1.55%   0.33%    1.47%   3.38%  7.09%

    S&P 500 Index - Total Return (2) 7.56%   3.61%    3.73%  15.61% 19.26%

    (1)  Fund performance reflects a composite of the return for the feeder
         funds comprising each of the Company's most significant master funds
         and is presented on a total return basis, net of all fees and
         expenses of the relevant fund (except incentive income on certain
         unrealized private investments that could reduce returns on these
         investments at the time of realization), and includes the
         reinvestment of all dividends and income. Performance includes
         realized and unrealized gains and losses attributable to certain
         private and initial public offering investments that are not
         allocated to all investors in the funds.  Investors that do not
         participate in such investments or that pay different fees may
         experience materially different returns. Past performance is no
         guarantee of future results.
    (2)  Readers should not assume that there is any material overlap between
         those securities in the portfolios of the funds and those that
         comprise the S&P 500 Index. It is not possible to invest directly in
         the S&P 500 Index. Returns of the S&P 500 Index have not been reduced
         by fees and expenses associated with investing in securities and
         include the reinvestment of dividends. The S&P 500 Index is an equity
         index owned and maintained by Standard & Poor's, a division of
         McGraw-Hill, whose value is calculated as the free float-weighted
         average of the share prices of 500 large-cap corporations listed on
         the NYSE and Nasdaq. The comparison of S&P 500 performance relative
         to the funds' performance should not be considered an indication of
         how the fund will perform relative to the S&P 500 in the future.
         Please note that the funds' investment objective is not to beat the
         S&P 500 Index.  Furthermore, the funds' performance has frequently
         trailed that of the S&P 500 Index in periods of positive performance.

 

 

SOURCE Och-Ziff Capital Management Group LLC

Investor Relations, Tina Madon, Managing Director, Head of Investor Relations, Och-Ziff Capital Management Group LLC, +1-212-719-7381, tina.madon@ozcap.com; Media Relations, Steve Bruce or Chuck Dohrenwend, both of The Abernathy MacGregor Group, for Och-Ziff Capital Management Group LLC, +1-212-371-5999