Och Ziff Capital Management (OZM)

Investment Activities

Our directors, partners, including each of the Named Executive Officers, managing directors and qualified employees may invest their own capital in the Och-Ziff funds pursuant to the terms and conditions of our funds. Historically, we have not charged management fees and incentive income on investments made by us, our partners and other affiliated parties. Subsequent to our initial public offering, we charge management fees and receive incentive income on investments made by our partners, including each of our Named Executive Officers (but not by us or other affiliated parties), in our funds on and after the closing date of our initial public offering (other than in respect of investments made with distributions from the deferred incentive income receivable from our offshore funds).

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In addition, we made certain investments in our domestic funds on behalf of our founding owners. These investments were funded by such founding owners and totaled approximately $291.1 million at December 1, 2007. The investments were distributed to our founding owners in the form of limited partnership interests in the respective funds on December 1, 2007, including to our Named Executive Officers, as follows: for Mr. Och, $221.9 million; for Mr. Windreich, $20.9 million; for Mr. Frank, $3.6 million; for Mr. Cohen, $10.1 million; and for Mr. Varga, $1,210.

As of December 31, 2005, we had investments of $25.6 million in a fund managed by Daniel Och’s brother. We earned approximately $648,000 and $650,000, included within Och-Ziff funds income, on these investments during the years ended December 31, 2006 and 2005, respectively. No amounts were earned in 2007.