Citi Gives Its Initial Take On Och-Ziff Capital Management

Och-Ziff Capital Management OZM reported $0.16 versus Citi's consensus-like $0.14 estimate. Relative to Citi, variance reflects higher incentive fees as management fees and costs in line ex bonus accruals. Strong cost control reinforces robust leverage as AUM/performance build. Revenues of $125.3M, including $7M in incentive fees versus Citi's $117M forecast which assumed no incentive fees. Management fees of $117M right in line. Economic income of $80.5M ahead of Citi's $75M forecast, with variance reflecting incentive income less bonus accrual; ex incentive/accrual, economic income in-line, suggesting good cost control. Positives include allocation cycle to alternatives, Och-Ziff Capital Management's positioning for share gains, model leverage, and investment backdrop. Citi affirms its Buy rating and $21 PT on OZM OZM is trading higher at $15.93