Oaktree Capital Group, LLC Announces Fourth Quarter and Full-Year 2012 Financial Results

Oaktree Capital Group, LLC Announces Fourth Quarterand Full-Year 2012 Financial Results

• Adjusted net income per Class A unit grew to $1.36 and $4.06 for the fourth quarter and full-year 2012, respectively, from $0.33 and $2.15 in 2011, driven by gains in incentive and investment income.

• Distributable earnings per Class A unit grew to $1.37 and $3.82 for the fourth quarter and full-year 2012, respectively, from $0.39 and $2.62 in 2011, on continued strong fee-related earnings and higher incentive income and investment income proceeds.

• Economic net income per Class A unit grew to $1.47 and $5.75 for the fourth quarter and full-year 2012, respectively, from $1.05 and $1.26 in 2011, driven by a substantial increase in incentives created for the full-year period.

• Gross capital raised grew to $11.0 billion in 2012 from $9.8 billion in 2011, representing the sixth consecutive year of $9.8 billion or more. Over the last six years, Oaktree has raised a total of $76.3 billion.

• GAAP net income attributable to Oaktree Capital Group, LLC was $39.3 million and $107.8 million for the fourth quarter and year ended December 31, 2012, respectively.

• Oaktree declares a quarterly distribution of $1.05 per Class A unit, for an aggregate distribution of $2.94 for fiscal year 2012.

LOS ANGELES--(BUSINESS WIRE)-- Oaktree Capital Group, LLC (NYS: OAK) today reported its financial results for the fourth quarter and year ended December 31, 2012.

Adjusted net income ("ANI") rose 187%, to $220.4 million in the fourth quarter of 2012, from $76.7 million in the fourth quarter of 2011, on a 71% increase in total segment revenues. The growth in revenues, to $447.0 million from $261.4 million, reflected substantially higher incentive income. Strong fee-related earnings ("FRE") and incentive income, together with investment income proceeds from Oaktree funds and DoubleLine Capital LP and its affiliate (together, "DoubleLine"), drove distributable earnings up 382%, to $238.1 million in the fourth quarter of 2012 from $49.4 million in the fourth quarter of 2011.

ANI rose 67%, to $717.3 million in the year ended December 31, 2012 from $428.4 million in the prior year, on a 34% increase in total segment revenues. The growth in revenues, to $1.4 billion in 2012 from $1.1 billion in 2011, resulted from record annual incentive income and higher investment income. The incentive income, coupled with higher investment income proceeds from Oaktree funds and DoubleLine, drove distributable earnings to an annual record of $672.2 million in 2012, up 38% from $488.5 million in 2011.

Oaktree's closed-end funds distributed a quarterly record $5.7 billion to investors in the fourth quarter of 2012 and an annual record $12.7 billion for full-year 2012.

Howard Marks, Chairman, said, "The fourth quarter of 2012 was a record quarter within a record year for Oaktree. Across the firm, our investment teams delivered the type of performance that is the hallmark of Oaktree's risk-controlled, value-driven investment approach. Compelling returns across our many asset classes drove revenues, distributable earnings and distributions to our clients and unitholders to their highest levels ever."

In addition to ANI, Oaktree calculates economic net income ("ENI") to facilitate comparability with other alternative asset managers that use ENI as their profit measure. Unlike ANI, ENI measures incentive income based on market values. ENI fell 7%, to $221.7 million in the fourth quarter of 2012 from $237.2 million in the fourth quarter of 2011, and rose 236% for the annual period, to $971.7 million in 2012 from $289.5 million in 2011.

GAAP-basis results for the fourth quarter and year ended December 31, 2012 included net income attributable to Oaktree Capital Group, LLC of $39.3 million and $107.8 million, respectively.

Assets under management were $77.1 billion as of December 31, 2012, down $3.9 billion from September 30, 2012 and up $2.2 billion since December 31, 2011. The decline during the fourth quarter reflected closed-end fund distributions, while the year-over-year gain resulted from market-value appreciation in Oaktree's funds. Management fee-generating assets under management were $66.8 billion as of December 31, 2012, little changed from $66.2 billion at September 30, 2012 and $67.0 billion as of December 31, 2011. Oaktree's new distressed debt fund, Oaktree Opportunities Fund IX, L.P. ("Opps IX"), with $5.0 billion of capital commitments, has not yet commenced its investment period and thus was not included in management fee-generating assets under management as of December 31, 2012.

Gross capital raised of $2.3 billion in the fourth quarter brought the full-year 2012 total to $11.0 billion. During the fourth quarter, Oaktree held an interim closing for Oaktree Enhanced Income Fund, L.P. ("EIF"), which invests in senior loan assets on a leveraged basis. EIF had its final close in February 2013 and is expected to reach a total fund size, including leverage, of over $2.0 billion, exceeding our initial target of $1.5 billion. Following its second and most recent close in January 2013, Oaktree Real Estate Opportunities Fund VI, L.P. ("ROF VI") has committed capital of $436 million, towards a targeted size of $1.5 billion.

In January 2013, Oaktree launched the marketing of Oaktree Principal Fund VI, L.P. ("PF VI"), a control investing closed-end fund, with a target of $3.0 billion in capital commitments. Oaktree's control investing funds primarily invest to gain control of, or significant influence over, middle-market companies that are experiencing distress or dislocation.

On February 7, 2013, OCM Opportunities Fund VIIb, L.P. ("Opps VIIb") made its first distribution of the year, in the aggregate cash amount of $700 million. From that distribution, Oaktree currently expects to recognize gross incentive income of approximately $195 million, before associated incentive income compensation expense, in the first quarter of 2013. Using balances as of December 31, 2012, the recognition of $195 million as gross incentive income would leave approximately $937 million as Opps VIIb's remaining gross accrued incentive (fund level). Opps VIIb is now through both the "catch-up" layer of its distribution waterfall and any impact from prior tax-related incentive distributions to Oaktree; thus, Oaktree's incentive share of Opps VIIb's future distributions attributable to its limited partners will equal 20%, before associated incentive income compensation expense.

Oaktree declares a distribution of $1.05 per Class A unit with respect to the fourth quarter of 2012, payable on March 1, 2013 to unitholders of record on February 25, 2013. This payout will bring to $2.94 the total distributions applicable to fiscal year 2012.

The table below presents: (a) fee-related earnings, distributable earnings, adjusted net income and economic net income, in each case for both the Operating Group and per Class A unit; and (b) assets under management and accrued incentives (fund level) data. Please refer to the Glossary for definitions.

Note: Oaktree discloses in this earnings release certain financial measures, including fee-related earnings, fee-related earnings-OCG per Class A unit, distributable earnings, distributable earnings-OCG per Class A unit, adjusted net income, adjusted net income-OCG per Class A unit, economic net income and economic net income-OCG per Class A unit, that are calculated and presented on the basis of methodologies other than in accordance with generally accepted accounting principles in the United States ("non-GAAP"). Reconciliations of these non-GAAP financial measures to the most directly comparable financial measures calculated and presented in accordance with GAAP are presented in Exhibit A. All non-GAAP measures, except adjusted net income, and all interim results presented in this earnings release are unaudited. GAAP-basis results for the year ended December 31, 2012 are subject to the completion of Oaktree's annual audit. All information in this earnings release gives effect to the conversion of previously outstanding 13,000 Class C units into Class A units on a one-for-one basis before the initial public offering of Class A units.

Operating Metrics

Assets under management

Assets under management ("AUM") were $77.1 billion as of December 31, 2012, as compared with $81.0 billion as of September 30, 2012 and $74.9 billion as of December 31, 2011. The $3.9 billion decrease since September 30, 2012 primarily reflected $5.7 billion in distributions to investors in our closed-end funds and $1.6 billion in uncalled capital commitments associated with the end of closed-end fund investment periods, partially offset by $2.1 billion of market-value gains. The $5.7 billion of closed-end fund distributions primarily included $2.5 billion by Opps VIIb, $1.2 billion by other distressed debt funds and $1.1 billion by control investing funds. Oaktree PPIP Fund, L.P. ("PPIP") represented $1.2 billion of the $1.6 billion in uncalled capital commitments to funds whose investment periods ended in the fourth quarter of 2012.

The $2.2 billion increase in AUM during 2012 was attributable primarily to market-value gains of $9.6 billion and new capital commitments of $6.5 billion to closed-end funds, partially offset by $12.7 billion of distributions to investors in closed-end funds. Of the new capital commitments, Opps IX represented $5.0 billion. Net inflows to open-end funds were $0.5 billion, driven by $1.0 billion in net inflows to U.S. high yield bonds.

Management fee-generating assets under management

Management fee-generating assets under management ("management fee-generating AUM") were $66.8 billion as of December 31, 2012, as compared to $66.2 billion as of September 30, 2012 and $67.0 billion as of December 31, 2011. The increase of $0.6 billion in the fourth quarter of 2012 represented increases of $0.9 billion from market-value gains in funds for which management fees are based on NAV and $0.6 billion in net inflows across open-end funds, partially offset by a decrease of $1.1 billion attributable to closed-end funds in liquidation. Of the latter, Opps VIIb accounted for $0.7 billion.

As compared to December 31, 2011, management fee-generating AUM decreased $0.2 billion, reflecting the net effect of a $5.5 billion decline from asset sales by closed-end funds in liquidation, $3.9 billion in market-value gains in funds for which management fees are based on NAV, and an increase of $1.0 billion upon closings for Oaktree Real Estate Opportunities Fund V, L.P. ("ROF V") and ROF VI, and drawdowns by PPIP and EIF, including leverage.

Incentive-creating assets under management

Incentive-creating assets under management ("incentive-creating AUM") were $34.0 billion as of December 31, 2012, as compared with $37.1 billion as of September 30, 2012 and $36.2 billion as of December 31, 2011. The decrease of $3.1 billion in the fourth quarter of 2012 reflected closed-end fund distributions of $5.3 billion, partially offset by drawdowns and market-value gains of $1.0 billion and $1.1 billion, respectively.

As compared to December 31, 2011, incentive-creating AUM decreased $2.2 billion, primarily reflecting the net effect of $12.1 billion in closed-end fund distributions, $4.5 billion in drawdowns and $5.4 billion in market-value gains. Of the $34.0 billion in incentive-creating AUM as of December 31, 2012, $25.6 billion, or 75.3%, was generating incentives at the fund level.

Accrued incentives (fund level) and incentives created (fund level)

Accrued incentives (fund level) amounted to $2.1 billion as of December 31, 2012, as compared with $2.1 billion as of September 30, 2012 and $1.7 billion as of December 31, 2011. The $0.4 billion increase in 2012 resulted from $911.9 million of incentives created, less $461.1 million of segment incentive income recognized.

Net of incentive income compensation expense, accrued incentives (fund level) amounted to $1.3 billion, $1.3 billion and $1.0 billion as of December 31, 2012, September 30, 2012 and December 31, 2011, respectively.

Uncalled capital commitments

Uncalled capital commitments amounted to $11.2 billion as of December 31, 2012, as compared with $13.3 billion as of September 30, 2012 and $11.2 billion as of December 31, 2011.

Segment Results

Revenues

Total segment revenues increased $185.6 million, or 71.0%, to $447.0 million for the fourth quarter of 2012 from $261.4 million for the fourth quarter of 2011, as a result of growth of $178.2 million in incentive income and $8.7 million in investment income, slightly offset by a decline of $1.4 million in management fees.

Total segment revenues increased $358.9 million, or 34.1%, to $1.41 billion for the year ended December 31, 2012 from $1.05 billion for 2011, as a result of growth of $23.1 million in management fees, $157.1 million in incentive income and $178.6 million in investment income.

Management fees

Management fees decreased $1.4 million, or 0.8%, to $184.7 million for the fourth quarter of 2012 from $186.1 million in the prior year's fourth quarter. The decline reflected a decrease of $17.6 million in fees attributable to closed-end funds in liquidation and increases of $8.0 million from new commitments to closed-end funds and $5.4 million from open-end funds resulting from market-value gains and net inflows. Among closed-end funds in liquidation, Opps VIIb accounted for $9.5 million of the decline. During the fourth quarter of 2012, closed-end funds accounted for $140.8 million, or 76.2%, of total management fees.

Management fees increased $23.1 million, or 3.2%, to $747.4 million for full-year 2012 from $724.3 million in 2011. The increase reflected $94.6 million from new commitments to closed-end funds and a decline of $67.8 million attributable to closed-end funds in liquidation. Funds that accounted for the majority of the new capital commitments were Oaktree Opportunities Fund VIIIb, L.P. ("Opps VIIIb"), Oaktree European Principal Fund III, L.P. ("EPF III"), ROF V and ROF VI. Of the funds in liquidation, Opps VIIb accounted for $40.7 million of the decline. During 2012, closed-end funds accounted for $580.6 million, or 77.7%, of total management fees.

Incentive income

Incentive income increased $178.2 million, or 555.1%, to $210.3 million for the fourth quarter of 2012, from $32.1 million for the prior year's fourth quarter. Tax-related incentive distributions from Opps VIIb accounted for $103.8 million of the total $210.3 million in the fourth quarter of 2012 and none of the prior year's $32.1 million. In the fourth quarter of 2012, $40.4 million of incentive income was attributable to the annual incentive fee from our evergreen fund Oaktree Value Opportunities Fund, L.P., with the remaining $66.1 million arising primarily from distributions by four different control investing and real estate funds.

Incentive income increased $157.1 million, or 51.7%, to $461.1 million for the year ended December 31, 2012, from $304.0 million in 2011. Of the $461.1 million, $203.5 million was attributable to realizations and related distributions by five of our real estate and control investing funds. Tax-related incentive distributions accounted for $200.7 million and $202.2 million of incentive income in 2012 and 2011, respectively, in both cases largely attributable to Opps VIIb.

Investment income

Investment income increased $8.7 million, or 20.1%, to $52.0 million for the fourth quarter of 2012 from $43.3 million for the fourth quarter of 2011, primarily as a result of Oaktree's investment in DoubleLine and secondarily as a result of higher income from Oaktree funds. Oaktree's income from its one-fifth ownership of DoubleLine grew from $1.0 million in the fourth quarter of 2011 to $6.8 million in the fourth quarter of 2012, of which the latter included $2.8 million attributable to performance fees.

Investment income increased $178.6 million, or 750.4%, to $202.4 million for the year ended December 31, 2012 from $23.8 million for 2011. Oaktree's investments in funds contributed $157.7 million of the increase, largely reflecting the considerably stronger financial markets in 2012 versus 2011. The remainder was primarily attributable to DoubleLine's income, of which Oaktree's share increased from $1.8 million in 2011 to $22.9 million in 2012, with the latter including $8.0 million related to performance fees.

Expenses

Compensation and benefits

Compensation and benefits for the fourth quarter of 2012 amounted to $82.1 million, an increase of $2.1 million, or 2.6%, from the fourth quarter of 2011. For the year ended December 31, 2012, compensation and benefits rose $22.0 million, or 7.1%, to $330.1 million from $308.1 million in 2011. Headcount, primarily in non-investment areas, grew 11.2% during 2012.

Incentive income compensation expense

Incentive income compensation expense rose $36.4 million, or 53.6%, to $104.3 million for the fourth quarter of 2012 from $67.9 million for the fourth quarter of 2011. For the year ended December 31, 2012, incentive income compensation expense rose $43.4 million, or 24.2%, to $222.6 million from $179.2 million for 2011. Benefiting comparisons for both 2012 periods was a charge of $55.5 million in the fourth quarter of 2011 upon the acquisition of a small portion of certain investment professionals' carried interest in Opps VIIb. Serving to increase compensation expense in the 2012 periods were increases in incentive income revenue of $178.2 million and $157.1 million in the fourth quarter and full-year 2012, respectively.

General, administrative and other expenses

General, administrative and other expenses increased $4.3 million, or 16.2%, to $30.8 million for the fourth quarter of 2012 from $26.5 million in the fourth quarter of 2011. For the year ended December 31, 2012, general, administrative and other expenses rose $8.9 million, or 8.8%, to $110.1 million from $101.2 million for 2011. Excluding the impact of foreign currency-related items, general, administrative and other expenses increased $2.8 million, or 10.7%, to $29.5 million for the fourth quarter of 2012, and $5.6 million, or 5.5%, to $107.0 million for full-year 2012. In each case, the increase reflected costs associated with corporate growth, enhancements to our operational infrastructure, heightened industry regulatory demands and being a public company.

Adjusted net income

Adjusted net income rose $143.7 million, or 187.4%, to $220.4 million for the fourth quarter of 2012 from $76.7 million for the fourth quarter of 2011, reflecting $141.8 million higher incentive income, net of incentive income compensation expense, an increase of $8.7 million in investment income, and a decrease of $7.7 million in fee-related earnings. The portion of adjusted net income attributable to our Class A units ("adjusted net income-OCG") was $41.0 million and $7.4 million for the fourth quarters of 2012 and 2011, respectively. On a per Class A unit basis, adjusted net income-OCG amounted to $1.36 and $0.33 for the fourth quarters of 2012 and 2011, respectively.

Adjusted net income rose $288.9 million, or 67.4%, to $717.3 million for the year ended December 31, 2012 from $428.4 million for 2011, reflecting increases of $178.6 million in investment income and $113.7 million in incentive income, net of incentive income compensation expense, and a decrease of $7.7 million in fee-related earnings. Adjusted net income-OCG was $114.4 million and $48.8 million for the years ended December 31, 2012 and 2011, respectively. On a per Class A unit basis, adjusted net income-OCG amounted to $4.06 and $2.15 for 2012 and 2011, respectively.

The effective income tax rates applied to ANI for the years ended December 31, 2012 and 2011, respectively, were 14% and 24%, resulting in effective income tax rates of 7% and 35% for the fourth quarters of 2012 and 2011, respectively. The full-year 2012 effective income tax rate of 14% for adjusted net income-OCG excluded a one-time adjustment to deferred tax assets. Including this adjustment, the effective income tax rate for 2012 was 18%. The effective income tax rate is a function of the mix of income and other factors, each of which often varies significantly within or between years and can have a material impact on the particular year's income tax expense.

Fee-related earnings

Fee-related earnings decreased $7.7 million, or 9.7%, to $71.8 million for the fourth quarter of 2012 from $79.5 million for the fourth quarter of 2011, reflecting the $1.4 million decline in management fees and $4.3 million increase in general, administrative and other expenses. The portion of FRE attributable to our Class A units ("fee-related earnings-OCG") was $0.40 and $0.39 per Class A unit for the fourth quarters of 2012 and 2011, respectively.

Fee-related earnings decreased $7.7 million, or 2.4%, to $307.3 million for the year ended December 31, 2012 from $315.0 million for 2011. Fee-related earnings-OCG were $1.62 and $1.47 per Class A unit for 2012 and 2011, respectively.

The effective income tax rates applied to FRE for the years ended December 31, 2012 and 2011, respectively, were 18% and 29%, resulting in effective income tax rates of 16% and 25% for the fourth quarters of 2012 and 2011, respectively. The full-year 2012 effective income tax rate of 18% for fee-related earnings-OCG excluded a one-time adjustment to deferred tax assets. Including this adjustment, the effective income tax rate for 2012 was 28%.

Distributable earnings

Distributable earnings increased $188.7 million, or 382.0%, to $238.1 million for the fourth quarter of 2012 from $49.4 million for the fourth quarter of 2011, reflecting increases of $141.8 million in incentive income, net of incentive income compensation expense, and $52.7 million in receipts of investment income, slightly offset by a decline of $7.7 million in fee-related earnings. For the fourth quarter of 2012, receipts of investment income totaled $70.2 million and reflected $50.0 million from fund liquidations and $20.8 million from Oaktree's one-fifth equity ownership in DoubleLine, of which the latter included $4.8 million attributable to performance fees. The portion of distributable earnings attributable to our Class A units ("distributable earnings-OCG") was $1.37 and $0.39 per unit for the fourth quarters of 2012 and 2011, respectively, reflecting distributable earnings per Operating Group unit of $1.58 and $0.33, respectively, less costs borne by Class A unitholders for professional fees and other expenses, cash taxes attributable to the Intermediate Holding Companies and amounts payable pursuant to the tax receivable agreement.

Distributable earnings increased $183.7 million, or 37.6%, to $672.2 million for the year ended December 31, 2012 from $488.5 million for 2011, reflecting increases of $113.7 million in incentive income, net of incentive income compensation expense, and $73.3 million in receipts of investment income, slightly offset by a decline of $7.7 million in fee-related earnings. For full-year 2012, receipts of investment income totaled $163.5 million and reflected $129.6 million from fund liquidations and $33.8 million from Oaktree's one-fifth equity ownership in DoubleLine, of which the latter included $8.7 million attributable to performance fees. Distributable earnings-OCG were $3.82 and $2.62 per unit for 2012 and 2011, respectively, reflecting distributable earnings per Operating Group unit of $4.47 and $3.29, respectively, less the aforementioned costs borne by Class A unitholders.

GAAP-Basis Results

Net income attributable to Oaktree Capital Group, LLC was $39.3 million for the fourth quarter of 2012. The comparable amount in the fourth quarter of 2011 was a net loss of $28.9 million, which included significant non-cash compensation expense stemming from the vesting of units held by Oaktree's employees at the time of our private equity offering in May 2007. The vesting period for that equity ended on January 2, 2012.

Net income attributable to Oaktree Capital Group, LLC was $107.8 million for the year ended December 31, 2012. The comparable amount in 2011 was a net loss of $96.0 million, which included a full year's worth of the previously mentioned non-cash compensation expense.

Capital and Liquidity

As of December 31, 2012, Oaktree had an available cash balance of $458.2 million, or $828.8 million when including investments in U.S. Treasury and government agency securities, and $615.2 million in outstanding debt. Oaktree had then and currently has no borrowings outstanding against its $500 million revolving bank credit facility. Oaktree's investments in funds and companies had a carrying value of $1.1 billion as of December 31, 2012. While all of these investments in funds and companies follow the equity method of accounting, whereby original cost is adjusted for Oaktree's share of income/loss and distributions, investments in funds reflect each fund's holdings at fair value, whereas investments in DoubleLine and other companies are not adjusted to reflect the fair value of the underlying companies.

Distribution

Oaktree Capital Group, LLC has declared a distribution attributable to the fourth quarter of 2012 of $1.05 per Class A unit, bringing to $2.94 the aggregate distributions for the four quarters applicable to fiscal year 2012. This distribution will be paid on March 1, 2013 to Class A unitholders of record at the close of business on February 25, 2013.

Conference Call

Oaktree will host a conference call to discuss fourth quarter and full-year 2012 results today at 2:00 p.m. Eastern Time / 11:00 a.m. Pacific Time. The conference call may be accessed by dialing (888) 769-9724 (U.S. callers) or +1 (415) 228-4639 (non-U.S. callers), participant password OAKTREE. Alternatively, a live webcast of the conference call can be accessed through the Unitholders - Investor Relations section of the Oaktree website, http://ir.oaktreecapital.com/.

For those individuals unable to listen to the live broadcast of the conference call, a replay will be available for 30 days on Oaktree's website, or by dialing (800) 294-4350 (U.S. callers) or +1 (402) 220-9777 (non-U.S. callers), beginning approximately one hour after the broadcast.

About Oaktree

Oaktree is a leading global investment management firm focused on alternative markets, with $77.1 billion in assets under management as of December 31, 2012. The firm emphasizes an opportunistic, value-oriented and risk-controlled approach to investments in distressed debt, corporate debt (including high yield debt and senior loans), control investing, convertible securities, real estate and listed equities. Headquartered in Los Angeles, the firm has over 700 employees and offices in 13 cities worldwide. For additional information, please visit Oaktree's website at www.oaktreecapital.com.

Forward-Looking Statements

This release contains forward-looking statements within the meaning of Section 27A of the U.S. Securities Act of 1933 (the "Securities Act") and Section 21E of the U.S. Securities Exchange Act of 1934, each as amended, which reflect the current views of Oaktree Capital Group, LLC ("OCG"), with respect to, among other things, its future results of operations and financial performance. In some cases, you can identify forward-looking statements by words such as "anticipate," "approximately," "believe," "continue," "could," "estimate," "expect," "intend," "may," "outlook," "plan," "potential," "predict," "seek," "should," "will" and "would" or the negative version of these words or other comparable or similar words. These statements identify prospective information. Important factors could cause actual results to differ, possibly materially, from those indicated in these statements. Forward-looking statements are based on OCG's beliefs, assumptions and expectations of its future performance, taking into account all information currently available to OCG. Such forward-looking statements are subject to risks and uncertainties and assumptions relating to OCG's operations, financial results, financial condition, business prospects, growth strategy and liquidity, including, but not limited to, changes in our anticipated revenue and income, which are inherently volatile; changes in the value of our investments; the pace of our raising of new funds; the timing and receipt of and impact of taxes on carried interest; distributions from and liquidation of our existing funds; changes in our operating or other expenses; the degree to which we encounter competition; and general economic and market conditions. The factors listed in the section captioned "Risk Factors" in OCG's prospectus dated April 11, 2012, which was filed with the SEC on April 12, 2012 in accordance with Rule 424(b) of the Securities Act, and in Part II, Item 1A, "Risk Factors" in the Company's Quarterly Report on Form 10-Q for the quarter ended June 30, 2012, each of which is accessible on the SEC's website at www.sec.gov, provide examples of risks, uncertainties and events that may cause OCG's actual results to differ materially from the expectations described in its forward-looking statements.

Forward-looking statements speak only as of the date the statements are made. Except as required by law, OCG does not undertake any obligation to publicly update or review any forward-looking statement, whether as a result of new information, future developments or otherwise.

This release and its contents do not constitute and should not be construed as (a) a recommendation to buy, (b) an offer to buy or solicitation of an offer to buy, (c) an offer to sell or (d) advice in relation to, any securities of OCG or securities of any Oaktree investment fund.