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Oaktree Capital Group, LLC Announces Second Quarter 2012 Financial Results

Assets Under Management

          As of

June 30, 2012
         

March 31, 2012
         

June 30, 2011
(in millions)
Assets Under Management:
Closed-end funds $ 49,795 $ 48,578 $ 49,826
Open-end funds 26,542 26,833 26,960
Evergreen funds 2,376 2,439 2,733
Total $ 78,713 $ 77,850 $ 79,519
 
          Three Months Ended           Twelve Months Ended
June 30, June 30,
  2012               2011     2012               2011  
(in millions)
Change in Assets Under Management:
Beginning balance $ 77,850 $ 85,691 $ 79,519 $ 75,329
Closed-end funds:
New capital commitments 3,466 562 8,700 4,153
Distributions for a realization event/other (2,723 ) (5,315 ) (8,848 ) (8,914 )
Cancellation of uncalled capital commitments - (1,209 ) (18 ) (1,209 )
Foreign currency translation (259 ) 58 (583 ) 440
Change in market value 752 349 841 6,389
Change in leverage (19 ) (8 ) (123 ) 19
Open-end funds:
Contributions 823 990 3,188 4,314
Redemptions (1,105 ) (1,251 ) (4,339 ) (4,100 )
Foreign currency translation (146 ) 70 (398 ) 479
Change in market value 137 (88 ) 1,131 3,329
Evergreen funds:
Contributions 4 65 227 166
Redemptions (76 ) (200 ) (427 ) (358 )
Distributions from restructured funds - (240 ) (69 ) (1,023 )
Foreign currency translation (2 ) 4 (6 ) 103
Change in market value   11     41     (82 )   402  
Ending balance $ 78,713   $ 79,519   $ 78,713   $ 79,519  
 

Management Fee-Generating AUM
          As of

June 30, 2012
         

March 31, 2012
         

June 30, 2011
(in millions)
Management Fee-Generating Assets Under Management:
Closed-end funds $ 37,709 $ 39,019 $ 34,576
Open-end funds 26,523 26,815 26,942
Evergreen funds   2,079   2,139   2,351
Total $ 66,311 $ 67,973 $ 63,869
 
                Three Months Ended           Twelve Months Ended
June 30, June 30,
  2012               2011     2012               2011  
(in millions)
Change in Management Fee-Generating Assets Under Management:
Beginning balance $ 67,973 $ 67,158 $ 63,869 $ 63,580
Closed-end funds:
New capital commitments to funds that pay fees based on committed capital - 471 7,403 1,943
Capital drawn by funds that pay fees based on drawn capital or NAV 427 257 1,206 572

Change for funds that pay fees based on the lesser of funded capital or cost basis during liquidation (1)

(1,521

)

(1,510

)

(4,769

)

(3,347

)
Change in fee basis from committed capital to drawn capital - (978 ) - (978 )

Cancellation of uncalled capital commitments for funds that pay fees based on committed capital

-

(1,066

)

-

(1,066

)
Distributions by funds that pay fees based on NAV (137 ) (72 ) (421 ) (623 )
Foreign currency translation (123 ) 19 (246 ) 214
Change in market value (2) 63 (4 ) 82 197
Change in leverage (19 ) (8 ) (122 ) 23
Open-end funds:
Contributions 824 990 3,188 4,315
Redemptions (1,106 ) (1,251 ) (4,339 ) (4,101 )
Foreign currency translation (146 ) 70 (398 ) 479
Change in market value 136 (88 ) 1,130 3,328
Evergreen funds:
Contributions 4 65 227 136
Redemptions (76 ) (197 ) (426 ) (343 )
Permanent cancellation of management fees from restructured funds - - - (861 )
Change in market value   12     13     (73 )   401  
Ending balance $ 66,311   $ 63,869   $ 66,311   $ 63,869  

 

 
(1)   For most closed-end funds, management fees are charged during the liquidation period on the lesser of (a) total funded capital and (b) the cost basis of assets remaining in the fund, with the cost basis of assets generally calculated by excluding cash balances. Thus, changes in fee basis during the liquidation period are not dependent on distributions made from the fund; rather, they are tied to the cost basis of the fund’s investments, which generally declines as the fund sells assets.
(2) The change in market value reflects certain funds that pay management fees based on NAV and leverage, as applicable.
 
                       
As of June 30,
  2012     2011  
(in millions)
Reconciliation of Assets Under Management to Management Fee-Generating Assets Under Management:
Assets under management $ 78,713 $ 79,519

Difference between assets under management and committed capital or cost basis for closed-end funds (1)
(4,128 ) (7,036 )
Capital commitments to funds that have not yet begun to generate management fees (4,713 ) (4,339 )

Undrawn capital commitments to funds for which management fees are based on drawn capital or NAV
(1,710 ) (2,614 )
General partner investments in management fee-generating funds (1,004 ) (922 )
Closed-end funds that are no longer paying management fees (598 ) (409 )
Funds for which management fees were permanently waived   (249 )   (330 )
Management fee-generating assets under management $ 66,311   $ 63,869  
 
(1)   Not applicable to closed-end funds that pay management fees based on NAV or leverage, as applicable.
 

The period-end weighted average annual management fee rates applicable to the respective management fee-generating AUM balances are set forth below:
          As of June 30,
2012             2011  
Weighted Average Annual Management Fee Rates:
Closed-end funds 1.51 % 1.46 %
Open-end funds 0.47 % 0.50 %
Evergreen funds 1.80 % 1.85 %
Overall 1.10 % 1.07 %
 

Incentive-Creating AUM
          As of

June 30, 2012
         

March 31, 2012
         

June 30, 2011
(in millions)
Incentive-Creating Assets Under Management:
Closed-end funds $ 33,930 $ 34,463 $ 34,870
Evergreen funds   2,066   2,130   2,405
Total $ 35,996 $ 36,593 $ 37,275
 

Accrued Incentives and Incentives Created (Fund Level)
          Three Months Ended           Six Months Ended
June 30, June 30,
  2012               2011     2012               2011  
(in thousands)
Accrued Incentives (Fund Level):
Beginning balance $ 1,889,460   $ 2,369,708   $ 1,686,967   $ 2,066,846  
Incentives created (fund level):
Closed-end funds (11,465 ) 27,112 242,729 440,573
Evergreen funds   2,349     6,587     13,317     26,877  
Total incentives created (fund level)   (9,116 )   33,699     256,046     467,450  
Less: segment incentive income recognized by us   (129,018 )   (107,320 )   (191,687 )   (238,209 )
Ending balance $ 1,751,326   $ 2,296,087   $ 1,751,326   $ 2,296,087  
Accrued incentives (fund level), net of associated incentive income compensation expense $ 1,070,597   $ 1,313,769   $ 1,070,597   $ 1,313,769  
 

Uncalled Capital Commitments

Uncalled capital commitments amounted to $13.7 billion as of June 30, 2012, as compared with $12.1 billion as of March 31, 2012 and $12.7 billion as of June 30, 2011.

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