Tuesday, December 31, 2013

Pure play Hedge Fund

It’s truly one of the few pure plays on the Hedge fund businesses. Och-Ziff is structured as a partnership that pays out the lion’s share of its retained earnings to shareholders.

One key reason why I like Och-Ziff is their managers are all about taking on very low risk-adjusted return types of strategies. Here we are talking about pre-announced cash mega merger deals in which there is 2% to 3% arbitrage returned involving a three- or four-month holding period for buying shares now at a discount to the tender value and then cashing them in when due. 

The ability to make sense — and money — doing deals like this is one of the beauties of a hedge fund, and it’s something most individual investors just aren’t equipped to do.

Another reason to like Och-Ziff is due to the anticipation of more institutional money flowing into hedge funds from corporate and public pension funds seeking ways to address looming long-term liabilities. 

Undoubtedly, some of that money seeking high returns will flow to Och-Ziff, and according to CEO Dan Och, he is “very confident” that the company will be able to capture more than its share of the anticipated money flow into the industry.

Bryan Perry Editor, Cash Machine

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