Och-Ziff’s Levin Scores a $119 Million Payday
The hedge-fund business can be accused of a lot of things. Skimping on pay is not one of them.
In 2012, James Levin, a then 30-year old trader at Och-Ziff Capital Management LLC, turned heads with a bet of more than $7.5 billion on “structured credit” debt investments, or about a quarter of the money the firm managed when the investments were made.
The wager was an enormous winner. Mr. Levin’s group scored gains of nearly $2 billion, according to people close to the matter.
The trade was detailed in an earlier Wall Street Journal story.
Now we’re learning just how much Och-Ziff, which managed nearly $43 billion as of the end of the first quarter, rewarded Mr. Levin for his prescient trading.
Earlier this month, the firm said Mr. Levin received nearly $119 million in stock awards, based on the fair value of these shares at the time they were granted,
according to a filing with the Securities and Exchange Commission. The payout was earlier
reported by Forbes.
Och-Ziff declined to comment.
Mr. Levin, 31, who goes by Jimmy and now carries the titles of head of global credit and an executive managing director at Och-Ziff, didn’t receive any other salary or bonus last year. He did receive “Operating Group D Units” of the firm, which represent claims on Och-Ziff’s profits. And his stock reward amounted to more than five times the nearly $21 million in shares received by the firm’s founder, Daniel Och, according to the filing. The pair have a history together: Mr. Levin first got to know Mr. Och when he taught Mr. Och’s son to water ski at summer camp several years ago, before Mr. Levin completed a degree in computer science at Harvard University.
Likely part of the reason for last year’s huge payday: Mr. Levin’s credit team, with just 14 members, accounted for more than half of the 468-person firm’s $3.4 billion trading gains in 2012, according to people close to the situation, as prices of the debt rallied amid a U.S. housing rebound.
Mr. Levin’s payout underscores the riches that come to hedge-fund investors with prescient stock and bond picks. But it also points to how these investors generally are paid based on one-year paper gains, rather than realized profits. It’s not clear if Mr. Levin and Och-Ziff exited all of their structured-credit trades or how they performed last year. It’s also not clear how much risk Mr. Levin took to score his huge gains.
