Och-Ziff likes Real Estate

Nov. 3

Dan Och, heed of hedge fund Och-Ziff (OZM) this morning told analysts on a conference call, following better-than-expected fee income and earnings in Q3, that his firm is focused squarely on residential mortgage-backed securities and commercial real estate, areas the firm previously eschewed.

“Our portfolio [of structured credit investments] consists mainly of residential mortgage-backed securities, which we feel could generate equity-like returns without the use of leverage.” commented Och, a former Goldman Sachs (GS) trader who founded Och-Ziff in 1994. “We have built a strong capability in commercial real estate [which] we believe will present opportunity over the next 12 to 24 months. We have been preparing for that for the past two years. We are optimistic about the opportunities there.”

Structured credit investments make up about 14% of the firm’s investments of its $22.6 billion under management, while long and short equity positions totaled 30%, convertible arbitrage is 20%, and the rest is a mixture of cash, private investments, and merger arb.

Och appears poised to get the money he needs to play those markets. While assets under management saw net outlfows of $100 million from July 1 through October 1, Och said that through November 1, the firm had net inflows of $300 million.


hmm...