Credit Suisse’s Robert Shafir Named CEO of Och-Ziff

Effective Feb. 5, Robert Shafir will succeed Dan Och as chief executive of the $32 billion publicly traded hedge fund Och-Ziff Capital Management Group LLC. Shafir, the former CEO of Credit Suisse Americas and cohead of private banking and wealth, will step into the day-to-day leadership and firm strategy role. Och will continue to serve as board chairman through March 31, 2019, according to a company press release.

“Rob is a world-class executive who will be a great asset to Oz as we continue our evolution as a firm,” Och said, noting that his career experience of more than 30 years will enable Och-Ziff’s nearly 150 investment professionals to “continue to focus solely on what they do best—generating returns for our clients. I am confident this will be a seamless transition and look forward to building on our strong 2017 results.”

The shift is a week after William Barr, the former US Attorney who serves as chairman of the corporate responsibility and compliance committee, and as a member of the audit committee and the nominating committee, told the Oz board he will be leaving at the end of December. “Mr. Barr’s resignation relates to a disagreement over CEO succession, as well as business and governance plans for the company,” according to SEC filings.

Until December, Och’s mentee and co-chief investment officer, James Levin, 34, seemed to be the heir-apparent, but over Christmas weekend, Och changed his mind and Och-Ziff sent a letter to investors that now wasn’t “the right time” to transition to Levin, according to The Wall Street Journal.

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Following legal battles over bribery allegations regarding business in Africa, Och-Ziff shares have lost more than 50% of their value in the past two years, according to Bloomberg.

Prior to joining Credit Suisse, Shafir worked at Lehman Brothers for 17 years, serving as head of Global Equities, was an executive board member, and held other senior roles, including head of European Equities and global head of Equities Trading. He has a BA in Economics from Lafayette College and an MBA from Columbia Business School.

Tags: Hedge Fund, Och Ziff, Robert Shafir

Scrambling for a solution to shore up its pensions and eliminate its $129 billion pension debt, Illinois lawmakers will meet Tuesday to discuss a proposal that could see the largest municipal debt sale in history.

Reported by Bloomberg, who corresponded with Rep. Robert Martwick, the State Universities Annuitants Association’s (SUAA) proposal wants Illinois to issue $107 billion in bonds in order to fully fund its flailing retirement system. This debt sale, of course, would assume that the pension system’s investments would produce more yield than its interest payments.

“We’re in a situation in Illinois where our pension debt is just crushing,” Martwick, who chairs the SUAA, told Bloomberg. “When you have the largest pension debt in the world, you probably ought to be thinking big.”

While selling bonds for pensions is nothing new—especially for the Prairie State, which had previously sold $10 billion worth of pensions for bonds in 2003—it has never been done on this grand a scale. In addition, the strategy does not have the greatest track record; Bloomberg reports that when New Jersey, also very underfunded, and Detroit had given this concept a shot, their pensions continued to shortfall—with the Motor City’s 2005 and 2006 trials experiencing engine failure in the form of bankruptcy in recent years.

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Because Illinois’s current pension debt grows at the same rate that the retirement system expects to earn on its investments, the SUAA’s plan is expected to save Illinois an estimated $103 billion by 2045.

Although the S&P 500 Index had done well recently, increasing 19% last year while still climbing strong today, it’s all about timing the market, and with economists predicting increasingly higher chances of a 2018 market correction, it may not be the best time for a plan as risky as this one to be pushed forward, experts say.

“Those types of deals are not typically positively received by the rating agencies or investors,” Eric Friedland, Lord Abbett’s director of municipal research, told Bloomberg. “That type of issuance could definitely be a credit negative.”

Tags: Bonds, Debt Sale, Illinois, Pension, Robert Martwick, State Universities Annuitants Association