Och-Ziff IPO a Done Deal

The semi-torturous process of taking his firm public has finally ended for Dan Och and his team of razor sharp associates.

Underwriters led by Goldman Sachs priced 36 million shares at $32, on the higher end of the forecasted $30 to $33 range. The shares will begin trading under the ticker symbol (OZM-NYSE).

The stock gods must have been angry with Och & Co., given how many curveballs were thrown at the deal from the time it was registered. The July selloff turned into an out and out rout by mid-August, and it is possible the deal would have remained on ice if the indexes would have stayed under pressure. The thaw in the market, and a timely investment from a Dubai investment group, stoked renewed interest in the offering.

The road to a ticker symbol has been a long one for Och, who started the firm in 1994 with backing from the Ziff brothers after they sold their family’s publishing empire to Forstmann Little for $1.45 billion. The company was flipped to Softbank for $2.1 billion less than a year later.

Time will tell whether or not money is left on the table this time around, but the partners at Och-Ziff will reinvest the bulk of the proceeds raised back into the funds under management and they will get busy raising assets and building out a professional organization. Asset Management IPO’s have struggled this year, with Fortress, Blackstone and the recent Pzena deal quickly breaking the syndicate bid. Those very failures might increase the chance of this deal working, and Och-Ziff’s structure and strategies are very different from the previous crop of IPO’s.

No position for us here, at least not yet, but it is high time one of these deals worked. The evolution of the larger, non-bank hedge fund operations should prove to be an interesting story over the next decade, and one we look forward to following.

Is Dan Och up to the challenge? You can run all the numbers you want, but this one is a bet on him, and one we will seriously consider. Yes, maybe it is different this time.

He will have something to prove, and has skin in th game as well. A slight uptick in the stock will make his stake worth $5 billion. Move over Schwarzman, there is a new Sheriff in town.
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The content contained represent the opinions of 1440 Wall Street. This commentary in no way constitutes a solicitation of business or investment advice. It is intended solely for the entertainment of the reader, and the author. No Position

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