"Despite continued challenging market conditions, we delivered strong absolute returns during the first quarter and in April," said Daniel Och, Chairman and Chief Executive Officer of Och-Ziff. "We see the current environment -- which places a premium on investment performance, fund infrastructure and investment process transparency to fund investors -- as an excellent one in which to continue to generate strong absolute returns for our fund investors. The number of compelling investment opportunities remains greater than it has been in many years, and there is a smaller universe of investors pursuing those ideas. While it may take some time for investors to begin to re-allocate capital to alternative asset managers, we believe that we will benefit from our competitive strengths and gain market share as a result."

For the first quarter ended March 31, 2009, Och-Ziff reported a GAAP net loss of $81.9 million, or $1.07 per basic and diluted Class A Share, compared with a GAAP net loss of $268.1 million, or $3.62 per basic and diluted Class A Share for the first quarter ended March 31, 2008. The primary driver of the year-over-year reduction in the GAAP net loss was an increase in Net Loss Allocated to Partners' and Others' Interests in Income of Consolidated Subsidiaries resulting from the adoption of FAS 160, partially offset by a decline in Management Fees due to lower assets under management.

The 2009 first quarter GAAP net loss primarily resulted from non-cash expenses of $419.9 million associated with the Company's reorganization in connection with its initial public offering ("IPO") in November 2007. These expenses are related to the amortization of Och-Ziff Operating Group A Units ("Group A Units"), which represent equity interests in the Company's principal operating subsidiaries ("Och-Ziff Operating Group") that were issued to the Company's pre-IPO owners in exchange for their pre-IPO interests in those subsidiaries. The Group A Units vest annually over five years from the closing of the IPO. Accordingly, amortization of these expenses is expected to result in a GAAP net loss each quarter through 2012. Once vested, the Group A Units may be exchanged on a one-to-one basis for Class A Shares. To date, none of the vested Group A Units have been exchanged for Class A Shares.

Also contributing to the GAAP net loss in the 2009 first quarter were non-cash expenses of $25.9 million for the amortization of equity-based compensation, primarily related to Class A Restricted Share Units ("RSUs") awarded to all of the Company's employees in connection with the IPO. These RSUs vest annually over four years from the closing of the IPO. Each RSU represents the right to receive one Class A Share upon vesting.

Management uses Economic Income to evaluate the financial performance of and make operating decisions for the Och-Ziff Funds segment and Other Operations. Management believes that investors should review the same performance measures that it uses to analyze the Company's operating performance. Economic Income is a pre-tax measure that does not include income allocations to the pre-IPO interests of the partners and Ziff Brothers Investments (the "Ziffs"), reorganization expenses related to the Company's IPO, equity-based compensation expenses, taxes, the impact of consolidated Och-Ziff funds, or amounts allocated to the partners and the Ziffs on their direct interests in the Och-Ziff Operating Group, among other adjustments. For further information regarding these adjustments, please see Exhibit 5 of the financial tables that accompany this press release. For reconciliations of Economic Income of the Och-Ziff Funds segment, Other Operations and Total Company to the respective GAAP net losses for the periods discussed below, please see Exhibits 3 and 4 of the financial tables that accompany this press release.

The Company's Distributable Earnings for the first quarter ended March 31, 2009 were $27.2 million, or $0.07 per Adjusted Class A Share, compared with $49.7 million, or $0.12 per Adjusted Class A Share in the 2008 first quarter. The year-over-year reduction in Distributable Earnings was primarily attributable to a decline in Management Fees due to lower assets under management, partially offset by lower Non-compensation Expenses. Distributable Earnings is a supplemental non-GAAP financial measure that management believes provides a meaningful basis for comparison of the after-tax operating performance of the Company. Additionally, management uses Distributable Earnings, among other financial data, to determine the earnings available to distribute as dividends to holders of the Company's Class A Shares and to the Company's partners and the Ziffs with respect to their Group A Units.

Distributable Earnings is equal to Economic Income less Adjusted Income Taxes. Adjusted Income Taxes are estimated assuming all Group A Units and RSUs were converted on a one-to-one basis into Class A Shares ("Adjusted Class A Shares"). Distributable Earnings per Share is equal to Distributable Earnings divided by the weighted-average number of Adjusted Class A Shares. Neither Economic Income nor Distributable Earnings should be considered as an alternative to GAAP earnings before income taxes, net earnings or cash flow, or as indicative of liquidity or the cash available to fund operations.

Prior to 2009, Distributable Earnings and Distributable Earnings per Share were determined using Economic Income for the Och-Ziff Funds segment. As a result of the growing significance of Och-Ziff's Other Operations, which is comprised of additional investments in new businesses, principally the Company's investment in its Asia real estate business, Economic Income, Distributable Earnings and Distributable Earnings per Share now include the results of the Company's Other Operations on a basis comparable to Economic Income of the Och-Ziff Funds segment. Amounts in the prior year have been restated to conform to the new presentation. For a reconciliation of Economic Income to Distributable Earnings, please see Exhibit 6 of the financial tables that accompany this press release.

Och-Ziff's assets under management were $22.6 billion as of March 31, 2009, 16% lower than the $27.0 billion in assets under management as of December 31, 2008 and 32% lower than the $33.3 billion in assets under management as of March 31, 2008. The $10.7 billion year-over-year decrease was driven by net outflows of $6.1 billion and performance-related depreciation of $4.6 billion. During the 2009 first quarter, the $4.4 billion decrease in assets under management was driven by net outflows of $5.1 billion partially offset by performance-related appreciation of $733 million. The net outflows for the first quarter 2009 include redemption requests received for December 31, 2008, but exclude redemption requests received for March 31, 2009 as these redemptions are reflected in assets under management as of April 1, 2009.

Assets under management as of April 1, 2009 were $20.3 billion, which reflects redemptions for the month of March 2009 (net of April 1, 2009 capital inflows) of $2.3 billion. Virtually all redemptions for a quarter generally are paid on the first day of the month following the quarter in which the redemption notice was submitted, and capital inflows for that month are accepted on the same day. Redemptions remained elevated in the 2009 first quarter as global market conditions continued to be unsettled, particularly in January and February. The Company believes that redemptions also continued to be adversely impacted due to the continued effect of other alternative asset managers that imposed gates, or who otherwise restricted access to investor capital. Och-Ziff has provided, and continues to provide, liquidity to its fund investors in accordance with the pre-defined terms of its funds.

Estimated assets under management as of May 1, 2009 were $20.6 billion, which reflects redemptions for the month of April 2009 (net of May 1, 2009 capital inflows) of $84.8 million, and performance-related appreciation of $391.7 million.