Och-Ziff Capital Management Group LLC, the $31 billion hedge fund led by Daniel Och, recently told its investment partner, 643 Capital Management, that it wants to exit from the foreclosed homes business.
By Matthew Goldstein and Jennifer Alban to Reuters
The hedge fund is looking to make a profit on a portfolio of about 300 foreclosed homes in northern California that were acquired at distressed prices, said the sources.
Gregor Watson, founder of 643 Capital Management, which is Och-Ziff’s partner, said he is not marketing the portfolio of homes but declined to comment further.
Over the past year, other high-profile Wall Street names, such as Blackstone Group, Oaktree Capital Management, Colony Capital and TCW, have all committed money to investing in foreclosed homes. Oaktree has invested in a fund managed by Carrington.
Wall Street analysts estimate that this year alone, private equity firms, hedge funds and other investment firms have raised between $6 billion and $8 billion to acquire single-family homes at either foreclosure auctions or from banks. So far, private equity giant Blackstone has emerged as one of the biggest buyers, spending more than $1 billion to gobble up foreclosed homes.
Och-Ziff, whose flagship fund is up a little over 8 percent this year, originally entered the foreclosed home market as part of a joint venture with McKinley Partners, a California real estate investment firm. Watson, founder of 643 Capital Management, was a principal with McKinley, but left this year to open his own shop, taking Och-Ziff with him.