Sculptor Hedge Fund Outflows Diminish While CLO Deals Weaken

(Bloomberg) -- Sculptor Capital Management Inc. said quarterly outflows in its main hedge fund diminished while its collateralized loan obligation business weakened.

Clients pulled $108.5 million from the Sculptor Master Fund in the second quarter, according to a statement Thursday. The firm closed $409 million of CLO deals in the first half, versus $3 billion for all of last year.

Sculptor, founded in 1994 by billionaire Daniel Och, has seen net withdrawals from its main fund every year since the end of 2014, when it disclosed that it was the target of a bribery probe into its business in Africa. It rebranded with the Sculptor name last September to distance itself from the legal troubles that led to a client exodus and a plunge in its stock price.

In the second quarter, Sculptor drew in capital from its real estate and credit funds. That helped total assets under management rise $2 billion to $35.4 billion.

The firm’s CLO business has been hit by the economic impact of the Covid-19 pandemic but the market is beginning to open up, Robert Shafir, Sculptor’s chief executive officer, said on a conference call Thursday.

In aircraft securitizations, deals fell to $473 million because the market is looking for clarity around the direction of air travel, he added.

Sculptor’s Master Fund rose 1.3% in July, extending its gain for the year to 7.4%. The firm’s Credit Opportunities fund fell 10.1% through July. Its opportunistic credit funds saw inflows of $472 million in the second quarter.

The company’s shares rose 0.9% to $13.91 at 9:41 a.m. in New York. They’re down 38% this year through Wednesday.

In June, Jimmy Levin was named chief executive officer, effective April 2021. The appointment rewarded a Sculptor veteran who was once passed over for the job and who has strong ties to Och. In an interview with Bloomberg last month, Levin said his goal is to “grind out a slow, steady, solid return over an extended period of time.”

Read more: Levin Pledges ‘100% Compliance’ as Sculptor Charts Post-Och Era

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