Och-Ziff Capital Management (NYSE:OZM) became yet another public hedge fund after shares opened even, priced in middle of their range at $32.00 per share today on the NYSE. Wall Street appears to remain skeptical as to the viability of a public hedge fund after Blackstone's blockbuster initial offering in June, which was followed by a series of negative tax law changes.

Och-Ziff Capital Management was founded in 1994 by former Goldman Sachs trader Daniel Och and the Ziff publishing family. The firm institutional alternative asset management firm and an alternative asset manager has approximately $26.8 billion of assets under management for over 700 fund investors. It invests in equity securities, convertible securities, and debt instruments. It also trades in high-yield debt, options futures, forwards, swaps, other derivatives, private securities and assets, real estate entities, and other investments.

Och-Ziff posted 2006 net income of $588 million on revenue of $1.01 billion after returning 16.7 percent annually to investors over its 13-year history. The company is formed as a limited partnership, which is a tax structure that currently enjoys a lower tax rate. Instead of being charged a regular income tax, the managers can collect their income taxed under the capital gains tax. However, tax law has changed and this company may face higher taxes after a few years of being grandfathered.

In the end, Och-Ziff is a successful hedge fund with excellent returns. However, risks associated with potential tax liability just over the horizon combined with the bad press many hedge funds have received over excess fees may weigh into the share price. Regardless, this stock is definitely one worth watching!

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