Interview with Daniel Och of Och-Ziff Capital Management
Pensions & Investments has an interview with Daniel Och, founder and head of Och-Ziff Capital Management (OZM). Here is an excerpt:
Where do you see interesting investment opportunities?
Several of our businesses are secularly more attractive than they were three years ago. For example, convertible arbitrage, where many participants were using large amounts of leverage, we believe is a much more attractive business than it had been. Long/short equity also continues to be appealing to us.
We're constantly thinking about where we can expand into new opportunities. Structured credit is a good example of that, consisting of residential mortgage-backed securities, commercial mortgage-backed securities and structured products with corporate assets as the underlying collateral. These are areas we were not involved in three years ago given the significant leverage and embedded leverage and the fact that virtually all of the risk management was based on what the rating was.
We built very deep and strong capabilities in structured credit. Now that the sector has dislocated, (we are able to) take advantage of opportunities. Number one, we think that banks and financial institutions will begin to be more aggressive in selling assets off their balance sheets. Number two, on the commercial side, we think that deteriorating fundamentals will impact the structured side, creating literally hundreds of billions of dollars' worth of distressed product.
Our expectation is that the opportunities are beginning now and will continue into 2010, although having said that ... it may take longer to emerge. I think another of the mantras of our firm applies here: Have capabilities everywhere and obligations nowhere.
Read full interview with Daniel Och.
(Thanks to Simoleon Sense for the link.)