Och off

6 December 2018 By Tom Buerkle Follow @tombuerkle

Daniel Och is finally giving up his pioneering listed hedge-fund creation. After massive value destruction and a power struggle, he is ceding control and a big ownership stake. The firm will also be taxed as a corporation, not a partnership. For investors, the road back is long.

This content is for Subscribers only

To access full Breakingviews.com content you must be a subscriber. Please use the following link to request a trial.

Context News

Och-Ziff Capital Management on Dec. 6 announced that Daniel Och, its founder and chairman, had agreed to step down from the board of directors and relinquish a sizable ownership stake in the firm to current senior management as part of a succession plan.

Under the arrangement, Och and a group of former executive managing directors will transfer 35 percent of their Class A units to current senior management and new hires. Och will resign as a director in the second quarter of 2019. He will redeem most of his liquid balances in Och-Ziff funds by the end of the first quarter of 2019. The firm will cease to use the Och-Ziff name by the end of 2019.

Both former and current executives will forgo distributions on their units until the firm accumulates $600 million to pay down debt. The distribution holiday will not apply to public shareholders.

Separately, the firm intends to change its legal structure from a partnership to a corporation effective Dec. 31, 2018, and conduct a one-for-10 reverse stock split of its Class A shares after the close of trading on Jan. 3, 2019.

Och-Ziff shares were up more than 20 percent at $1.17 at 2:43 p.m. EST.

Email a friend

Please complete the form below.

Required fields *