We have been bullish on Och-Ziff Capital Management (OZM) for some time now. One of the few publicly traded hedge funds, Founder and Portfolio Manager Daniel Och has been one of the best managers of risk on the Street. Remember: it’s not about how much you make these days; it’s about how little you lose. Och was only down 0.052% for the month of May in his Master Fund when everyone else was posting losses above 1% or in some cases, double digit percentages. YTD performance is at 4.55% as of June 1.
Och has been stealthily buying shares of his company for several months now. He began acquiring stock back in December of last year and has been at it through June of 2012. In the last seven months, he has spent a total of $5.85 milion acquiring 805,470 shares in the open market. In June alone he bought $3.4 million of stock.
To us, Och’s buying is a signal of his confidence in his firm’s ability to generate alpha and manage risk. We also like the quantitative setup with OZM, which was a trigger for us to go long OZM last Wednesday.