Summary of OCH-ZIFF CAPITAL MANAGEMENT GROUP LLC

Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations

This discussion contains forward-looking statements and involves numerous risks and uncertainties, including, but not limited to, those described in "Part I-Item 1A. Risk Factors" of our annual report filed with the U.S. Securities and Exchange Commission on Form 10-K for the year ended December 31, 2008, which we refer to as our "Annual Report." Actual results may differ materially from those contained in any forward-looking statements. This Management's Discussion and Analysis of Financial Condition and Results of Operations should be read in conjunction with our Annual Report. An investment in our Class A Shares is not an investment in any of our funds.

BUSINESS OVERVIEW

We are a leading global alternative asset management firm with offices in New York, London, Hong Kong, Tokyo, Bangalore and Beijing. We provide investment management services to our various hedge funds and separately managed accounts on behalf of a diverse group of institutional investors worldwide, including funds-of-funds, pension and profit-sharing funds, foundations, university endowments and other financial institutions. We were founded in 1994 by Daniel Och in partnership with the Ziffs with the goal of building an enduring, world class investment management business. Since our inception, we have managed our business with a global perspective, taking advantage of investment opportunities wherever they arise. We have been among the pioneers of the hedge fund industry in building out a global investment platform, with 362 employees, including 135 investment professionals, worldwide as of September 30, 2009.

In November 2007, we completed our initial public offering, or "IPO," of 36 million Class A Shares and a private offering of approximately 38.1 million Class A Shares to DIC Sahir, a wholly-owned subsidiary of Dubai International Capital LLC. We refer to the IPO and the private share sale to DIC Sahir collectively as the "Offerings." The Offerings strengthened our brand visibility globally while also providing us with the added capital to pursue growth opportunities. Our founding partners, including Daniel Och, and the Ziffs reinvested substantially all of their $1.6 billion in after-tax proceeds from the Offerings into the Och-Ziff funds, primarily OZ Global Special Investments Master Fund, the main vehicle by which we expect to grow our private investments business.

FACTORS AFFECTING OUR BUSINESS

As a global alternative asset manager, our business is affected by several factors, including: economic conditions in the United States, Western Europe, Asia and elsewhere in the world; the strength and liquidity of the U.S. and global capital markets; the strength of the alternative asset management industry, including the amount of capital invested in, and withdrawn from, alternative investments; and our investment performance on both an absolute and relative basis and the related impact on our ability to attract new capital.

During the third quarter, equity and credit markets continued to rally globally, further advancing the rally that began in the first half of 2009. While economic data was mixed, corporate earnings results were generally favorable relative to expectations. Credit spreads continued to tighten as capital markets issuance remained strong, with issuers taking advantage of favorable market conditions to repair their balance sheets through debt and equity issuance. Monetary policy remained extremely accommodative.

Fundamentals in the hedge fund industry improved further during the 2009 third quarter. Investment performance was generally strong in response to the more favorable market environment and lower volatility in the equity markets globally. Redemptions appeared to have normalized to historical levels for the industry as a whole as market conditions have further improved and investor confidence has increased. New capital flows are slowly beginning to return to the industry, with the 2009 third quarter being the second consecutive quarter in which there was a net increase in capital. It may still take some time, however, for those inflows to become meaningful as institutional investors continue to assess how they will re-balance their portfolios and re-invest their capital. We continue to believe that investors have substantial capital to invest, that they will allocate a portion of it to alternative asset managers, and that this allocation will grow over time.

During the third quarter of 2009, our funds delivered strong absolute returns in every month of the quarter. Our investment performance benefitted from our multi-strategy approach, which gives us the ability to capitalize on investment opportunities in a number of asset classes globally. Our redemptions declined substantially from second quarter levels, and we believe that, consistent with the experience for the hedge fund industry more broadly, our redemptions have returned to historical levels. We believe that the most important factor about future capital inflows is not the exact timing of when they begin, but rather the aggregate size of those flows over time and the corresponding market share we are able to attract. We remain confident that as investors re-deploy capital to alternative investments, we will be a leading beneficiary of those flows because of our track record, infrastructure, transparency and the consistency of our model.

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Our ability to grow revenues and expand our business is dependent upon attracting new assets under management from existing and new investors. The current environment presents unique opportunities because the market dislocation affected such a broad range of asset classes around the world. We also believe that the competitive landscape has changed in important ways due to the consolidation and contraction that have occurred both within the hedge fund industry and in the financial services industry since the beginning of 2008. Both the expanding opportunity set and the more fragmented competitive landscape are positive factors for our business. Finally, we believe investors place a premium on global institutional asset managers like us that have a long, positive track record, a strong business infrastructure, a multi-strategy approach, provide transparency to fund investors and have significant capital to deploy when the right opportunities arise.

There are several elements which are integral to our business that we believe are differentiating competitive strengths. As such, we view these elements as important to our ability to attract new assets under management over time:

• Well established investment performance track record and strong investment returns. We are a leading, global alternative asset manager with a track record spanning fifteen years. We have demonstrated our ability to generate consistent, positive, absolute returns and preserve fund investor capital across market cycles. We believe our investment performance record positions us to gain a greater share of capital inflows as institutional investors increase their demand for hedge fund products. Historically, this demand has been driven by several factors, including the pursuit of higher returns compared to those generated by traditional equity and fixed income strategies, the desire to increase diversification and selecting asset managers who generate investment returns with low volatility and that have a low correlation to the broader equity markets.

• Multi-strategy approach. We have a highly-diversified business model and pursue five core investment strategies globally. Within each of our portfolios we allocate capital dynamically amongst these strategies based on where we see the best investment opportunities. Our investment strategies are not dependent on large directional moves in the markets broadly or in any one sector or strategy. Moreover, we do not invest capital based on pre-determined allocations by geography, asset class or industry sector, but rather by where we see the best opportunities. Our approach seeks to ensure that investments are diverse and sized appropriately relative to risk/return.

• Disciplined investment and risk management processes. We maintain a disciplined focus on the investment and risk management processes that have been central to our business since inception. We generally make investments where our analytical processes lead us to believe that we have expertise and a competitive advantage, and then only in positions for which we believe the risks are reasonable and manageable. Our risk management principles and practices are a key element of our daily investment processes, and we focus significant attention to actively managing the risk in our portfolios.

• Low use of leverage. Historically, we have generated investment returns without the extensive use of leverage, and we will continue to manage our business with a consistent and disciplined focus on generating consistent, positive, absolute returns and preserving investor capital.

• Infrastructure and transparency. We provide fund investors with the infrastructure and transparency that they consider important in their determination of alternative asset managers with which to invest.

• Global presence. We have a diversified global alternative investment platform. Our global presence, respected brand name and financial and intellectual capital enable us to identify and quickly respond to investment opportunities. As markets continue to stabilize, we believe that there is significant potential for us to further develop our private investment platforms to capitalize on emerging markets, real estate, energy and alternative energy. We believe that these asset classes will be drivers of long-term growth in our assets under management.

UNDERSTANDING OUR RESULTS

Assets under Management and Fund Performance

Our results are primarily driven by the combination of assets under management and the investment performance of our funds. Positive investment performance and preservation of fund investor capital are the principal determinants of the long-term success of our business because they enable us to grow assets under management organically as well as attract new capital and minimize redemptions by our fund investors. Conversely, poor investment performance slows our growth, decreases our assets under management and can result in investor redemptions from our funds.

We typically accept new investors and additional investments from existing investors into our funds on a monthly basis on the first day of each month. Investors in our funds (other than investors in special investments, certain real estate funds and other new businesses) have the right to redeem their interests in a fund following an initial lock-up period of one to three years. Following the expiration of these lock-up periods, investors may redeem capital generally on a quarterly or annual basis upon giving 30 to 45 days prior written notice; provided however, that upon the payment of a redemption fee and upon giving 30 days

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prior written notice, investors with quarterly redemption rights may redeem capital during the lock-up period. The lock-up requirements for the funds may generally be waived or modified in the sole discretion of the fund's general partner or board of directors, as applicable. The ability of investors to contribute capital to and redeem capital from our funds causes our assets under management to fluctuate from period to period. Fluctuations in assets under management also result from our funds' investment performance due to the reinvestment of fund profits and impact of fund losses. Fluctuations in assets under management due to investor contributions and redemptions, and resulting from fund performance, directly impact the revenues we earn from management fees and incentive income.

As our assets under management fluctuate, our revenues from management fees fluctuate. Management fee rates typically range from 1.5% to 2.5% of assets under management annually and currently average approximately 1.7%, taking into account non-fee paying assets under management. Management fees are calculated on a quarterly basis, based on assets under management as of the first day of each quarter. Capital contributions made during a quarter are charged a pro rata management fee. Requests for redemptions submitted during a quarter generally are paid at the beginning of the following quarter. Accordingly, quarterly redemptions generally will have no impact on management fees during the quarter in which they are submitted. Instead, these redemptions will decrease assets under management as of the first day of the following quarter, which reduces management fees for that quarter. In addition, annual fund investment performance determines the amount of incentive income we will earn, because generally we earn 20% of any net profits earned by the funds on an annual basis.

Accordingly, our revenues are directly impacted by the value of our assets under management. Management fees are directly impacted by any increase or decrease in our assets under management, whether due to investor capital flows or fund investment performance, while incentive income is directly impacted by our funds' performance and indirectly impacted by increases and decreases in assets under management. To the extent that our assets under management change, our total revenues will change. For example, a $1 billion increase or decrease in assets under management would generally increase or decrease annual management fees by approximately $17 million, assuming no material changes in current average management fee rates and taking into account non-fee paying assets under management. If net profits attributable to a fee-paying fund investor were $1 billion, we generally would earn incentive income equal to $200 million, assuming no change in current incentive income rates. For most of our funds, there is a one-year high-water mark in years when our funds experience negative investment performance. Generally, if the high-water mark is not recouped during the year following the loss, the high-water mark is eliminated, allowing us to earn incentive income during the second year following the loss, even if the full amount of the investor's prior year's loss had not been recouped. If the high-water mark is recouped during the year, we would then be able to earn incentive income during that year on net profits in excess of the high-water mark.

Information with respect to our assets under management throughout this quarterly report, including the tables set forth in this discussion and analysis, includes deferred balances, which are made up of incentive income receivables from our offshore funds that were deferred prior to the Offerings, and investments by us, our partners and certain other affiliated parties. Prior to the IPO, we did not charge management fees or earn incentive income on these investments. Following our IPO, we began charging management fees and earning incentive income on new investments made in our funds by our partners and certain other affiliated parties, including the reinvestment by our founding partners of the after-tax proceeds from the Offerings, other than the reinvestment by our founding partners of deferred balances. As of September 30, 2009, approximately 11% of our assets under management represented investments by us, our partners and certain other affiliated parties in our funds and the deferred balances. As of this date, approximately 40% of these affiliated assets under management are not charged management fees and are not subject to an incentive income allocation, as they relate primarily to deferred balances and pre-IPO investments by our founding partners and other related parties.

Revenues

We generate revenue through two principal sources: management fees and incentive income. The amount of revenues earned from those sources is directly related to the amount of our assets under management and the investment performance of our funds. Management fees are directly impacted by any increase or decrease in our assets under management, while incentive income is impacted by our funds' performance and any increase or decrease in assets under management.

• Management fees. We earn management fees as follows:

Hedge Funds and Managed Accounts. Management fees range from 1.5% to 2.5% annually of assets under management. Management fees are generally paid to us on a quarterly basis, at the beginning of the quarter, based on assets under management at the beginning of the quarter. Management fees are prorated for capital inflows and redemptions during the quarter. Accordingly, changes in our management fee revenues each quarter are influenced by changes in the opening balances of assets under management, the management fee rates charged on new capital compared with the rates on capital that is redeemed, and the relative magnitude and timing of inflows and redemptions during the respective quarter.

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Real Estate Funds. Management fees from the Och-Ziff real estate funds are generally charged at an annual rate of 1.5% of the total capital commitments during the original investment period (through October 31, 2009) and 1.5% of invested capital thereafter. Management fees are generally paid to us on a quarterly basis, at the beginning of the quarter, and are prorated for changes in capital commitments throughout the original investment period and invested capital thereafter.

• Incentive Income. We earn incentive income based on the performance of the Och-Ziff funds and managed accounts. Incentive income is typically equal to 20% of the net realized and unrealized profits earned for the full year that are attributable to each investor, but excludes unrealized profits on certain private investments. Incentive income on private investments is earned in the year of the sale or realization of the private investment. Generally, for most of our funds, there is a one-year high-water mark, except for the OZ Global Special Investments Master Fund, which has a perpetual high-water mark. Substantially all of our incentive income is recorded at the end of the fourth quarter of each year, when all contingencies have been resolved. Generally, incentive income recorded during the first three quarters of the year is related to fund investor redemptions.

Revenues recorded as income of consolidated Och-Ziff funds consists of interest income, dividend income and other revenues related to the lending of securities and other miscellaneous items.

Expenses

Our operating expenses consist of compensation and benefits; interest expense; and general, administrative and other expenses.

• Compensation and benefits. Compensation and benefits is comprised of salaries and benefits, guaranteed and discretionary cash bonuses and equity-based compensation primarily in the form of Class A restricted share units, or "RSUs". Generally, compensation and benefits comprise a significant portion of total expenses, with discretionary cash bonuses comprising a large portion of total compensation and benefits expense. These cash bonuses are funded by total annual revenues, which are significantly influenced by incentive income earned by us at the end of the year.

In the second quarter of 2009, we began to accrue for the estimated discretionary cash bonuses that we expected to pay our employees at year end. We did this in order to provide a competitive compensation structure taking into account the high-water marks in our funds, which if not recovered could preclude us from earning any incentive income, and the fact that our funds had generated strong year-to-date investment performance due to the efforts of the firm's employees. In the third quarter of 2009, management revised its annual discretionary bonus compensation methodology for years in which high-water marks are in effect. During the second and third quarter, we accrued a total of $31.5 million. Any remaining amount will be expensed in the fourth quarter. The actual cash bonuses paid in the 2009 fourth quarter may vary materially from management's current estimate as discretionary cash bonuses are based on total annual revenues, including any year-end incentive income, which is influenced by, among other things, our funds' investment performance, the level of assets under management, the ability of our funds to continue to satisfy the high-water marks at the end of the year and global economic and market conditions. As we have done historically, we will determine the actual amount of annual discretionary cash bonuses in the fourth quarter of this year. Accordingly, the amounts accrued as of September 30, 2009 may not be indicative of the actual cash bonuses paid in the 2009 fourth quarter.

• Interest expense. Amounts included within interest expense relate primarily to interest expense on our term loan and on the note payable on our corporate aircraft.

• General, administrative and other. General, administrative and other expenses are related to professional services, occupancy and equipment, business development expenses, information processing and communications, insurance, changes in the tax receivable agreement liability and other miscellaneous expenses.

Prior to the Reorganization, income allocations to our founding partners, other than Mr. Och, and the Ziffs on their interests in our business were recorded as allocations to non-equity partners and profit sharing expenses, respectively. As part of the Reorganization, these interests were reclassified as Och-Ziff Operating Group A Units, resulting in significant non-cash charges that we have recorded within Reorganization expenses in our consolidated statements of operations. The estimated future Reorganization expenses related to the amortization of Och-Ziff Operating Group A Units held by our founding partners are expected to be approximately $1.7 billion per year from 2009 through 2011 and $1.5 billion in 2012.

Expenses recorded as expenses of consolidated Och-Ziff funds consist of interest expense, dividend expense, stock loan fees and other expenses.

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Other Income (Loss)

Our other income (loss) consists of (i) net earnings (losses) on deferred balances and investments in Och-Ziff funds and joint ventures, (ii) gain on early retirement of debt; and (iii) net gains (losses) of consolidated Och-Ziff funds.

• Net Earnings (Losses) on Deferred Balances and Investments in Och-Ziff Funds and Joint Ventures. Net earnings (losses) on deferred balances and investments in Och-Ziff funds and joint ventures primarily consists of the following: (i) net earnings (losses) on deferred balances; (ii) net earnings (losses) on investments in our funds made by us to economically hedge certain deferred compensation plans indexed to fund performance; and
(iii) net losses on investments in joint ventures.

• Gain on Early Retirement of Debt. Gain on early retirement of debt consists of the gain realized upon the early retirement of $5 million of our term loan that occurred during the second quarter of 2009.

• Net Gains (Losses) of Consolidated Och-Ziff Funds. Net gains (losses) of consolidated Och-Ziff funds consist of realized and unrealized gains and losses on investments held by the consolidated Och-Ziff funds.

Income Taxes

The computation of the effective tax rate and provision for each interim period requires certain estimates and significant judgment including, but not limited to, the expected operating income for the year, projections of the proportion of income earned and taxed in foreign jurisdictions, permanent differences, and the likelihood of recovering deferred tax assets existing as of September 30, 2009. The estimates and judgments used to compute the provision for income taxes may change as new events occur, additional information is obtained or the tax laws and regulations change.

Members of the United States Congress have introduced legislation in the current session of Congress that would, if enacted, preclude us from qualifying for treatment as a partnership for U.S. federal income tax purposes under the publicly-traded partnership rules. In addition, other tax legislation has been proposed that may negatively impact our business, such as taxing the incentive income we derive from our interests in certain funds as ordinary income. See "Item 1A. Risk Factors-Risks Related to Taxation-Members of the United States Congress have introduced legislation that would, if enacted, preclude us from qualifying for treatment as a partnership for U.S. federal income tax purposes under the publicly-traded partnership rules and treat certain of our offshore funds as domestic corporations. Our structure also is subject to potential judicial or administrative change and differing interpretations, possibly on a retroactive basis." in our Annual Report for information on other legislation, including legislation introduced in the previous session of Congress addressing these issues.

Net Loss Allocated to Partners' and Others' Interests in Income of Consolidated Subsidiaries

Partners' and others' interests in income of consolidated subsidiaries represents ownership interests held by parties other than us and is primarily made up of: (i) Och-Ziff Operating Group A Units held by our founding partners and the Ziffs; and (ii) fund investors' interests in the consolidated Och-Ziff funds. Increases or decreases in this item related to the Och-Ziff Operating Group A Units are driven by the earnings or losses of the Och-Ziff Operating Group, and prior to the adoption of the Financial Accounting Standards Board's ("FASB") new accounting treatment of noncontrolling interests (formerly Statement of Financial Accounting Standards ("SFAS") No. 160, Noncontrolling Interests in Consolidated Financial Statements-an amendment of ARB No. 51 ("SFAS 160")) on January 1, 2009, losses were allocated to such units to the extent that cumulative losses did not reduce partners' and others' interests in consolidated subsidiaries to a deficit position. Subsequent to January 1, 2009, we no longer absorb losses when cumulative losses reduce partners' and others' interests in consolidated subsidiaries to a deficit position. See "-Recently Adopted Accounting Pronouncements" for additional information regarding the adoption of SFAS 160. Increases or decreases in this item related to fund investors' interests in consolidated Och-Ziff funds are driven by the earnings or losses of the consolidated Och-Ziff funds.

ASSETS UNDER MANAGEMENT AND FUND PERFORMANCE

Assets Under Management

Our assets under management include deferred balances, amounts invested by us and certain amounts invested by our founding partners and other affiliated parties for which we charge no management fees and receive no incentive income. As of September 30, 2009, approximately 11% of our assets under management represented investments by us, our partners and certain other affiliated parties in our funds and the deferred balances. As of this date, approximately 40% of these affiliated assets under management are not charged management fees and are not subject to an incentive income allocation, as they relate primarily to deferred balances and pre-IPO investments by our founding partners and other related parties. In addition, we calculate management fees based on a quarterly basis, based on assets under management as of the first day of each quarter. Capital contributions made during a quarter are charged a pro rata management fee. The amounts presented below are net of management fees and incentive income, and are presented as of the end of the period. Accordingly, the assets under management presented in the table below are not the amounts used to calculate management fees for the respective periods.

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