Company Quick10K Filing
Price21.53 EPS1
Shares28 P/E22
MCap606 P/FCF14
Net Debt176 EBIT59
TTM 2019-09-30, in MM, except price, ratios
10-Q 2020-09-30 Filed 2020-11-09
10-Q 2020-06-30 Filed 2020-08-06
10-Q 2020-03-31 Filed 2020-05-07
10-K 2019-12-31 Filed 2020-02-24
10-Q 2019-09-30 Filed 2019-11-07
10-Q 2019-06-30 Filed 2019-08-06
10-Q 2019-03-31 Filed 2019-05-09
10-K 2018-12-31 Filed 2019-03-15
10-Q 2018-09-30 Filed 2018-11-06
10-Q 2018-06-30 Filed 2018-08-02
10-Q 2018-03-31 Filed 2018-05-03
10-K 2017-12-31 Filed 2018-02-23
10-Q 2017-09-30 Filed 2017-11-02
10-Q 2017-06-30 Filed 2017-08-02
10-Q 2017-03-31 Filed 2017-05-02
10-K 2016-12-31 Filed 2017-03-01
10-Q 2016-09-30 Filed 2016-11-02
10-Q 2016-06-30 Filed 2016-08-02
10-Q 2016-03-31 Filed 2016-05-03
10-K 2015-12-31 Filed 2016-02-11
10-Q 2015-09-30 Filed 2015-11-03
10-Q 2015-06-30 Filed 2015-08-05
10-Q 2015-03-31 Filed 2015-05-05
10-K 2014-12-31 Filed 2015-02-24
10-Q 2014-09-30 Filed 2014-11-04
10-Q 2014-06-30 Filed 2014-08-05
10-Q 2014-03-31 Filed 2014-05-02
10-K 2013-12-31 Filed 2014-03-18
10-Q 2013-09-30 Filed 2013-11-05
10-Q 2013-06-30 Filed 2013-08-02
10-Q 2013-03-31 Filed 2013-05-02
10-K 2012-12-31 Filed 2013-02-28
10-Q 2012-09-30 Filed 2012-11-05
10-Q 2012-06-30 Filed 2012-08-02
10-Q 2012-03-31 Filed 2012-05-02
10-K 2011-12-31 Filed 2012-02-27
10-Q 2011-09-30 Filed 2011-11-02
10-Q 2011-06-30 Filed 2011-08-02
10-Q 2011-03-31 Filed 2011-05-03
10-K 2010-12-31 Filed 2011-02-28
10-Q 2010-09-30 Filed 2010-11-05
10-Q 2010-06-30 Filed 2010-08-05
10-Q 2010-03-31 Filed 2010-05-05
10-K 2009-12-31 Filed 2010-03-04
8-K 2020-11-20 Officers, Regulation FD, Exhibits
8-K 2020-11-13 Enter Agreement, Leave Agreement, Off-BS Arrangement, Officers, Regulation FD, Exhibits
8-K 2020-11-09 Earnings, Exhibits
8-K 2020-11-03 Other Events, Exhibits
8-K 2020-10-02 Other Events, Exhibits
8-K 2020-09-30 Officers, Exhibits
8-K 2020-09-25 Enter Agreement, Off-BS Arrangement, Regulation FD, Exhibits
8-K 2020-09-23 Enter Agreement, Exhibits
8-K 2020-09-02 Other Events, Exhibits
8-K 2020-08-06 Earnings, Exhibits
8-K 2020-08-04 Other Events, Exhibits
8-K 2020-07-24 Other Events, Exhibits
8-K 2020-07-02 Other Events, Exhibits
8-K 2020-06-25
8-K 2020-06-09
8-K 2020-06-02
8-K 2020-05-06
8-K 2020-05-04
8-K 2020-04-02
8-K 2020-03-03
8-K 2020-02-13
8-K 2020-02-04
8-K 2020-01-23
8-K 2020-01-03
8-K 2019-12-03
8-K 2019-11-07
8-K 2019-11-04
8-K 2019-10-03
8-K 2019-09-04
8-K 2019-08-30
8-K 2019-08-02
8-K 2019-08-02
8-K 2019-07-02
8-K 2019-07-02
8-K 2019-06-04
8-K 2019-05-13
8-K 2019-05-09
8-K 2019-05-09
8-K 2019-05-02
8-K 2019-04-29
8-K 2019-04-09
8-K 2019-04-02
8-K 2019-04-01
8-K 2019-03-07
8-K 2019-03-04
8-K 2019-02-07
8-K 2019-02-07
8-K 2019-02-06
8-K 2019-02-04
8-K 2019-01-31
8-K 2019-01-14
8-K 2019-01-03
8-K 2019-01-03
8-K 2018-12-27
8-K 2018-12-05
8-K 2018-12-04
8-K 2018-11-02
8-K 2018-11-02
8-K 2018-10-02
8-K 2018-09-05
8-K 2018-08-02
8-K 2018-08-02
8-K 2018-08-02
8-K 2018-07-03
8-K 2018-06-06
8-K 2018-06-04
8-K 2018-05-02
8-K 2018-05-02
8-K 2018-04-17
8-K 2018-04-10
8-K 2018-04-05
8-K 2018-04-03
8-K 2018-03-28
8-K 2018-03-02
8-K 2018-02-23
8-K 2018-02-16
8-K 2018-02-02
8-K 2018-01-30
8-K 2018-01-29
8-K 2018-01-04
8-K 2018-01-03

OZM 10Q Quarterly Report

Part I - Financial Information
Item 1. Financial Statements
Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations
Item 3. Quantitative and Qualitative Disclosures About Market Risk
Item 4. Controls and Procedures
Part II - Other Information
Item 1. Legal Proceedings
Item 1A. Risk Factors
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
Item 3. Defaults Upon Senior Securities
Item 4. Mine Safety Disclosures
Item 5. Other Information
Item 6. Exhibits
EX-10.3 exhibit103.htm
EX-31.1 scu-10xqx3q2020xex311.htm
EX-31.2 scu-10xqx3q2020xex312.htm
EX-32.1 scu-10xqx3q2020xex321.htm

Och-Ziff Earnings 2020-09-30

Balance SheetIncome StatementCash Flow
Assets, Equity
Rev, G Profit, Net Income
Ops, Inv, Fin


Washington, D.C. 20549
 FORM 10-Q

For the quarterly period ended September 30, 2020
For the transition period from  ________  to ________
Commission File Number: 001-33805
(Exact name of Registrant as specified in its charter)
Delaware 26-0354783
(State or other jurisdiction of incorporation or organization) (I.R.S. Employer Identification No.)
9 West 57th Street, New York, New York 10019
(Address of principal executive offices)
(212) 790-0000
(Registrant’s telephone number, including area code)
Securities registered pursuant to Section 12(b) of the Act:

Title of each class Trading symbol(s)Name of each exchange on which registered
Class A Shares SCUNew York Stock Exchange

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes      No  
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes      No  
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
Large accelerated filer  Accelerated filer
Non-accelerated filer  Smaller reporting company
Emerging growth company
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.
    Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes  No 
As of November 5, 2020, there were 22,581,124 Class A Shares and 32,820,413 Class B Shares outstanding.

Item 1.
Item 2.
Item 3.
Item 4.
Item 1.
Item 1A.
Item 2.
Item 3.
Item 4.
Item 5.
Item 6.


Defined Terms
2007 Offerings
Refers collectively to our IPO and the concurrent private offering of approximately 38.1 million Class A Shares to DIC Sahir Limited, a wholly owned indirect subsidiary of Dubai Holdings LLC
active executive managing directors
Executive managing directors who remain active in our business
Annual Report
Our annual report on Form 10-K for the year ended December 31, 2019, as amended, dated February 25, 2020 and filed with the SEC
Class A Shares
Our Class A Shares, representing Class A common stock of Sculptor Capital Management, Inc., which are publicly traded and listed on the NYSE
Class B Shares
Class B Shares of Sculptor Capital Management, Inc., which are not publicly traded, are currently held solely by our executive managing directors and have no economic rights but entitle the holders thereof to one vote per share together with the holders of our Class A Shares
Collateralized loan obligations
the Company, Sculptor Capital, the firm, we, us, our
Refers, unless the context requires otherwise, to the Registrant and its consolidated subsidiaries, including the Sculptor Operating Group
Exchange Act
Securities Exchange Act of 1934, as amended
executive managing directors
The current executive managing directors of the Company, and, except where the context requires otherwise, also includes certain executive managing directors who are no longer active in our business
The multi-strategy funds, dedicated credit funds, including opportunistic credit funds and Institutional Credit Strategies products, real estate funds and other alternative investment vehicles for which we provide asset management services
U.S. generally accepted accounting principles
Group A Units
Refers collectively to one Class A operating group unit in each of the Sculptor Operating Partnerships. Group A Units are limited partner interests held by our executive managing directors
Group A-1 Units
Refers collectively to one Class A-1 operating group unit in each of the Sculptor Operating Partnerships. Group A-1 Units are limited partner interests held by our executive managing directors
Group B Units
Refers collectively to one Class B operating group unit in each of the Sculptor Operating Partnerships. Group B Units are limited partner interests held by Sculptor Corp
Group D Units
Refers collectively to one Class D operating group unit in each of the Sculptor Operating Partnerships. Group D Units are limited partner interests held by our executive managing directors
Group E Units
Refers collectively to one Class E operating group unit in each of the Sculptor Operating Partnerships. Group E Units are limited partner interests held by our executive managing directors

Group P Units
Refers collectively to one Class P operating group unit in each of the Sculptor Operating Partnerships. Group P Units are limited partner interests held by our executive managing directors
Institutional Credit Strategies
Our asset management platform that invests in performing credits, including leveraged loans, high-yield bonds, private credit/bespoke financing and investment grade credit via CLOs, aircraft securitizations, collateralized bond obligations, and other customized solutions
Our initial public offering of 3.6 million Class A Shares that occurred in November 2007
New York Stock Exchange
Partner Equity Units
Refers collectively to the Group A Units, Group E Units and Group P Units
Preferred UnitsOne Class A cumulative preferred unit in each of the Sculptor Operating Partnerships collectively represents one “Preferred Unit.” Certain of our executive managing directors collectively own 100% of the Preferred Units. Preferred Units issued in 2016 and 2017 are, collectively, referred to as “2016 Preferred Units.” Preferred Units issued in 2019 are referred to as “2019 Preferred Units.”
Class A performance-based RSUs
Refers to the recapitalization of our business that occurred in February 2019. As part of the Recapitalization, a portion of the interests held by our active and former executive managing directors were reallocated to existing members of senior management. In addition, we restructured the previously outstanding senior debt and Preferred Units
Sculptor Capital Management, Inc., a Delaware corporation
Class A restricted share units
Sculptor Corp
Sculptor Capital Holding Corporation, a Delaware corporation
Sculptor Operating Group
Refers collectively to the Sculptor Operating Partnerships and their consolidated subsidiaries
Sculptor Operating Group Units
Refers collectively to Sculptor Operating Group A, B, D, E, and P Units
Sculptor Operating Partnerships
Refers collectively to Sculptor Capital LP, Sculptor Capital Advisors LP and Sculptor Capital Advisors II LP
U.S. Securities and Exchange Commission
Securities Act
Securities Act of 1933, as amended
Special Investments
Investments that we, as investment manager, believe lack a readily ascertainable market value, are illiquid or should be held until the resolution of a special event or circumstance


Available Information
We file annual, quarterly and current reports, proxy statements and other information required by the Exchange Act with the SEC. We make available free of charge on our website ( our annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K, proxy statements and any amendments to those filings as soon as reasonably practicable after such material is electronically filed with or furnished to the SEC. We also use our website to distribute company information, and such information may be deemed material. Accordingly, investors should monitor our website, in addition to our press releases, SEC filings and public conference calls and webcast. The contents of our website are not, however, a part of this report.
Also posted on our website in the “Investor Relations—Corporate Governance” section are charters for our Audit Committee; Compensation Committee; Nominating, Corporate Governance and Conflicts Committee and Corporate Responsibility and Compliance Committee, as well as our Corporate Governance Guidelines and Code of Business Conduct and Ethics governing our directors, officers and employees. Information on, or accessible through, our website is not a part of, and is not incorporated into, this report or any other SEC filing. Copies of our SEC filings or corporate governance materials are available without charge upon written request to Sculptor Capital Management, Inc., 9 West 57th Street, New York, New York 10019, Attention: Office of the Secretary. Any materials we file with the SEC are also publicly available through the SEC’s website (
No statements herein, available on our website or in any of the materials we file with the SEC constitute, or should be viewed as constituting, an offer of any fund.
Forward-Looking Statements
This report contains forward-looking statements within the meaning of Section 27A of the Securities Act and Section 21E of the Exchange Act that reflect our current views with respect to, among other things, future events, our operations and our financial performance. We generally identify forward-looking statements by terminology such as “outlook,” “believe,” “expect,” “potential,” “continue,” “may,” “will,” “should,” “could,” “seek,” “approximately,” “predict,” “intend,” “plan,” “estimate,” “anticipate,” “opportunity,” “comfortable,” “assume,” “remain,” “maintain,” “sustain,” “achieve,” “see,” “think,” “position” or the negative version of those words or other comparable words.
Any forward-looking statements contained herein are based upon historical information and on our current plans, estimates and expectations. The inclusion of this or other forward-looking information should not be regarded as a representation by us or any other person that the future plans, estimates or expectations contemplated by us will be achieved.
We caution that forward-looking statements are subject to numerous assumptions, estimates, risks and uncertainties, including but not limited to the following: global economic, business, market and geopolitical conditions, including the impact of public health crises, such as the ongoing COVID-19 pandemic; whether we are able to satisfy the conditions to closing under our new senior secured credit facility; U.S. and foreign regulatory developments relating to, among other things, financial institutions and markets, government oversight, fiscal and tax policy; the outcome of third-party litigation involving us; the consequences of the Foreign Corrupt Practices Act settlements with the SEC and the U.S. Department of Justice (the “DOJ”) and any claims arising therefrom; whether the Company realizes all or any of the anticipated benefits from the Recapitalization and other related transactions; whether the Recapitalization and other related transactions result in any increased or unforeseen costs, indemnification obligations or have an impact on our ability to retain or compete for professional talent or investor capital; conditions impacting the alternative asset management industry; our ability to retain existing investor capital; our ability to successfully compete for fund investors, assets, professional talent and investment opportunities; our ability to retain our active executive managing directors, managing directors and other investment professionals; our successful formulation and execution of our business and growth strategies; our ability to appropriately manage conflicts of interest and tax and other regulatory factors relevant to our business; the anticipated benefits of changing the Registrant’s tax classification from a partnership to a corporation and subsequently converting from a limited liability company to a corporation; and assumptions relating to our operations, investment performance, financial results, financial condition, business prospects, growth strategy and liquidity.
If one or more of these or other risks or uncertainties materialize, or if our assumptions or estimates prove to be incorrect, our actual results may vary materially from those indicated in these statements. These factors are not and should not be construed as exhaustive and should be read in conjunction with the other cautionary statements and risks that are included in our

filings with the SEC, including but not limited to our Annual Report and Quarterly Report on Form 10-Q for the quarters ended March 31, 2020 and June 30, 2020.
There may be additional risks, uncertainties and factors that we do not currently view as material or that are not known. The forward-looking statements contained in this report are made only as of the date of this report. We do not undertake to update any forward-looking statement because of new information, future developments or otherwise.

Item 1. Financial Statements

 September 30, 2020December 31, 2019
 (dollars in thousands)
Cash and cash equivalents$290,297 $240,938 
Restricted cash3,578 4,501 
Investments (includes assets measured at fair value of $340,814 and $329,435, including assets sold under agreements to repurchase of $101,843 and $98,085 as of September 30, 2020 and December 31, 2019, respectively)
436,095 411,426 
Income and fees receivable37,708 215,395 
Due from related parties11,523 15,355 
Deferred income tax assets333,999 310,557 
Operating lease assets107,585 115,810 
Other assets, net75,003 82,608 
Assets of consolidated funds: 
Other assets of consolidated funds737 649 
Total Assets$1,296,525 $1,397,239 
Liabilities and Shareholders’ Equity 
Compensation payable$67,506 $187,180 
Unearned incentive income66,892 60,798 
Due to related parties194,975 211,915 
Operating lease liabilities118,091 128,043 
Debt obligations258,795 286,728 
Securities sold under agreements to repurchase101,892 97,508 
Other liabilities176,365 59,217 
Liabilities of consolidated funds: 
Other liabilities of consolidated funds443 389 
Total Liabilities984,959 1,031,778 
Commitments and Contingencies (Note 18)
Redeemable Noncontrolling Interests (Note 4)155,598 150,000 
Shareholders’ Equity  
Class A Shares, par value $0.01 per share, 100,000,000 and 100,000,000 shares authorized, 22,557,205 and 21,284,945 shares issued and outstanding as of September 30, 2020 and December 31, 2019, respectively
226 213 
Class B Shares, par value $0.01 per share, 75,000,000 and 75,000,000 shares authorized, 32,820,413 and 29,208,952 shares issued and outstanding as of September 30, 2020 and December 31, 2019, respectively
328 292 
Additional paid-in capital150,831 117,936 
Accumulated deficit(396,077)(343,759)
Shareholders’ deficit attributable to Class A Shareholders(244,692)(225,318)
Shareholders’ equity attributable to noncontrolling interests400,660 440,779 
Total Shareholders’ Equity155,968 215,461 
Total Liabilities, Redeemable Noncontrolling Interests and Shareholders’ Equity$1,296,525 $1,397,239 
See notes to consolidated financial statements.

 Three Months Ended September 30,Nine Months Ended September 30,
 (dollars in thousands)
Management fees$68,053 $62,956 $195,389 $187,979 
Incentive income41,525 30,423 89,085 118,378 
Other revenues2,316 3,646 7,693 12,458 
Income of consolidated funds58 1,820 90 6,732 
Total Revenues111,952 98,845 292,257 325,547 

Compensation and benefits65,030 78,343 197,739 244,767 
Interest expense4,488 6,323 14,944 19,054 
General, administrative and other26,465 48,272 203,786 114,487 
Expenses of consolidated funds34 507 53 646 
Total Expenses96,017 133,445 416,522 378,954 

Other Income (Loss)    
Changes in tax receivable agreement liability  278 5,362 
Net losses on early retirement of debt (218)(693)(6,271)
Net gains (losses) on investments8,157 (2,169)3,266 3,668 
Net (losses) gains of consolidated funds (460) 3,768 
Total Other Income (Loss)8,157 (2,847)2,851 6,527 

Income (Loss) Before Income Taxes24,092 (37,447)(121,414)(46,880)
Income taxes9,397 (1,446)(17,971)12,074 
Consolidated and Comprehensive Net Income (Loss)14,695 (36,001)(103,443)(58,954)
Less: Net (income) loss attributable to noncontrolling interests(4,393)11,435 63,552 26,653 
Less: Net income attributable to redeemable noncontrolling interests (574) (8,745)
Net Income (Loss) Attributable to Sculptor Capital Management, Inc.10,302 (25,140)(39,891)(41,046)
Change in redemption value of Preferred Units(2,285) (5,598)44,364 
Net Income (Loss) Attributable to Class A Shareholders$8,017 $(25,140)$(45,489)$3,318 
Earnings (Loss) per Class A Share    
Earnings (Loss) per Class A Share - basic$0.35 $(1.20)$(2.02)$0.16 
Earnings (Loss) per Class A Share - diluted$0.25 $(1.20)$(2.71)$0.12 
Weighted-average Class A Shares outstanding - basic22,729,285 20,907,021 22,542,047 20,703,211 
Weighted-average Class A Shares outstanding - diluted49,737,060 20,907,021 38,559,963 28,165,978 

See notes to consolidated financial statements.


Three Months Ended September 30,Nine Months Ended September 30,
(dollars in thousands)
Number of Class A Shares
Beginning balance
22,311,432 20,631,750 21,284,945 19,905,126 
Equity-based compensation
245,773 117,556 1,272,260 844,180 
Ending Balance
22,557,205 20,749,306 22,557,205 20,749,306 
Number of Class B Shares
Beginning balance
32,820,414 29,208,952 29,208,952 29,458,948 
Equity-based compensation
(1) 3,611,461 (249,996)
Ending Balance
32,820,413 29,208,952 32,820,413 29,208,952 
Class A Shares Par Value
Beginning balance
$223 $206 $213 $ 
Equity-based compensation
3 1 13 2 
Reclassification upon corporate conversion
Ending Balance
$226 $207 $226 $207 
Class B Shares Par Value
Beginning balance
$328 $292 $292 $ 
Equity-based compensation
Reclassification upon corporate conversion
Ending Balance
$328 $292 $328 $292 
Additional Paid-in Capital
Beginning balance
$142,288 $70,875 $117,936 $3,135,841 
Dividend equivalents on Class A restricted share units(61)483 814 961 
Equity-based compensation, net of taxes10,889 29,058 37,679 69,376 
Reclassification upon corporate conversion   (3,235,728)
Impact of changes in Sculptor Operating Group ownership   (124)
Reallocation of equity and income tax effects of Recapitalization   35,408 
Amendment to tax receivable agreement   50,318 
Change in redemption value of Preferred Units (2,285) (5,598)44,364 
Ending Balance
$150,831 $100,416 $150,831 $100,416 


Three Months Ended September 30,Nine Months Ended September 30,
(dollars in thousands)
Accumulated Deficit
Beginning balance
Cash dividends declared on Class A Shares (6,631)(11,613)(18,955)
Dividend equivalents on Class A restricted share units61 (483)(814)(961)
Reclassification upon corporate conversion   3,235,231 
Comprehensive net income (loss), excluding amounts attributable to redeemable noncontrolling interests10,302 (25,140)(39,891)(41,046)
Ending Balance
Shareholders’ Deficit Attributable to Class A Shareholders
Shareholders’ Equity Attributable to Noncontrolling Interests
Beginning balance
$386,686 $453,892 $440,779 $419,431 
Capital contributions3,535 958 7,084 1,576 
Capital distributions(391)(264)(3,639)(891)
Equity-based compensation, net of taxes6,437 2,769 19,988 34,377 
Impact of changes in Sculptor Operating Group ownership   124 
Reallocation of equity and income tax effects of Recapitalization   (39,086)
Change in redemption value of Preferred Units    57,042 
Comprehensive net income (loss), excluding amounts attributable to redeemable noncontrolling interests4,393 (11,435)(63,552)(26,653)
Ending Balance
$400,660 $445,920 $400,660 $445,920 
Total Shareholders’ Equity$155,968 $156,377 $155,968 $156,377 
Cash dividends paid on Class A Shares$ $0.32 $0.53 $0.92 

See notes to consolidated financial statements.


 Nine Months Ended September 30,
 (dollars in thousands)
Cash Flows from Operating Activities  
Consolidated net loss$(103,443)$(58,954)
Adjustments to reconcile consolidated net loss to net cash provided by operating activities:  
Amortization of equity-based compensation60,342 106,270 
Depreciation, amortization and net gains and losses on fixed assets5,379 6,941 
Net losses on early retirement of debt693 6,271 
Deferred income taxes(23,422)6,525 
Non-cash lease expense16,026 15,911 
Net gains on investments, net of dividends(617)(823)
Operating cash flows due to changes in:  
Income and fees receivable177,687 48,031 
Due from related parties3,833 (961)
Other assets, net6,861 8,756 
Compensation payable(121,190)(43,143)
Unearned incentive income6,095 1,994 
Due to related parties(16,940)(4,140)
Operating lease liabilities(17,160)(13,485)
Other liabilities117,996 798 
Consolidated funds related items:  
Net gains of consolidated funds (3,768)
Purchases of investments (128,917)
Proceeds from sale of investments 263,505 
Other assets of consolidated funds(90)(31,815)
Other liabilities of consolidated funds54 8,038 
Net Cash Provided by Operating Activities112,104 187,034 
Cash Flows from Investing Activities  
Purchases of fixed assets(1,781)(1,587)
Purchases of United States government obligations(322,439)(260,445)
Maturities and sales of United States government obligations316,879 181,278 
Investments in funds(18,501)(84,906)
Return of investments in funds5,790 56,947 
Net Cash Used in Investing Activities(20,052)(108,713)


 Nine Months Ended September 30,
 (dollars in thousands)
Cash Flows from Financing Activities  
Contributions from noncontrolling and redeemable noncontrolling interests7,084 5,323 
Distributions to noncontrolling and redeemable noncontrolling interests(3,639)(103,983)
Dividends on Class A Shares(11,613)(18,955)
Proceeds from debt obligations, net of issuance costs3,276  
Repayment of debt obligations, including prepayment costs(36,668)(187,790)
Proceeds from securities sold under agreements to repurchase, net of issuance costs 36,134 
Other, net(2,056)(1,166)
Net Cash Used in Financing Activities(43,616)(270,437)
Net change in cash and cash equivalents and restricted cash48,436 (192,116)
Cash and cash equivalents and restricted cash, beginning of period245,439 323,884 
Cash and Cash Equivalents and Restricted Cash, End of Period$293,875 $131,768 
Supplemental Disclosure of Cash Flow Information  
Cash paid during the period:  
Interest$10,794 $9,810 
Income taxes$5,614 $4,199 
Non-cash transactions:  
Increase in paid-in capital as a result of tax receivable agreement amendment$ $50,318 
Reconciliation of cash and cash equivalents and restricted cash:
Cash and cash equivalents$290,297 $126,814 
Restricted cash3,578 4,954 
Total Cash and Cash Equivalents and Restricted Cash$293,875 $131,768 

See notes to consolidated financial statements.

SEPTEMBER 30, 2020

Sculptor Capital Management, Inc. (the “Registrant”), a Delaware corporation, together with its consolidated subsidiaries (collectively, the “Company” or “Sculptor Capital”), is a global alternative asset management firm providing investment products in a range of areas, including multi-strategy, credit and real estate. With offices in New York, London, Hong Kong and Shanghai, the Company serves global clients through commingled funds, separate accounts and specialized products (collectively, the “funds”). Sculptor Capital’s distinct investment process seeks to generate attractive and consistent risk-adjusted returns across market cycles through a combination of bottom-up fundamental analysis, a high degree of flexibility, a collaborative team and integrated risk management. The Company’s capabilities span all major geographies, in strategies including fundamental equities, corporate credit, real estate debt and equity, merger arbitrage, structured credit and private investments.
The Company manages multi-strategy funds, dedicated credit funds, including opportunistic credit funds and Institutional Credit Strategies products, real estate funds and other alternative investment vehicles. Through Institutional Credit Strategies, the Company’s asset management platform that invests in performing credits, the Company manages collateralized loan obligations (“CLOs”), aircraft securitizations, collateralized bond obligations (“CBOs”), commingled products and other customized solutions for clients.
The Company’s primary sources of revenues are management fees, which are based on the amount of the Company’s assets under management, and incentive income, which is based on the investment performance of its funds. Accordingly, for any given period, the Company’s revenues will be driven by the combination of assets under management and the investment performance of the funds.
The Company has one operating and reportable segment and generates substantially all of its revenues in the United States. The Company conducts its operations through Sculptor Capital LP, Sculptor Capital Advisors LP and Sculptor Capital Advisors II LP (collectively, the “Sculptor Operating Partnerships” and collectively with their consolidated subsidiaries, the “Sculptor Operating Group”). The Registrant holds its interests in the Sculptor Operating Group indirectly through Sculptor Capital Holding Corporation (“Sculptor Corp”), a wholly owned subsidiary of the Registrant.
References to the Company’s “executive managing directors” include the current executive managing directors of the Company, and, except where the context requires otherwise, also include certain executive managing directors who are no longer active in the Company’s business. References to the Company’s “active executive managing directors” refer to executive managing directors who remain active in the Company’s business.
COVID-19 Pandemic
In the first nine months of 2020, a novel strain of coronavirus (“COVID-19”) spread across the world resulting in a wide-spread market and economic downturn. The Company’s largest fund, the Sculptor Master Fund, has generated performance-related appreciation through September 30, 2020. However, in the first quarter of 2020, the fund experienced significant performance-related depreciation driven by the market and economic impacts of the ongoing COVID-19 pandemic, which had a negative impact on the Company’s incentive income during the first quarter of 2020. In the second and third quarters of 2020, the Company generated strong returns that offset the first quarter losses. To the extent that the Company experiences significant performance-related depreciation in the fourth quarter of 2020, whether due to the COVID-19 pandemic or other factors, it would have a material impact on the Company’s ability to earn incentive income in 2020, as well as in future years until the losses are recovered for continuing fund investors.
In addition, in the first quarter of 2020, the Company also experienced significant unrealized losses on its risk retention investments held in certain of the CLOs that it manages as a result of the market and economic impacts of the ongoing COVID-19 pandemic. As of September 30, 2020, those unrealized losses had been recovered due to improved market conditions. The Company is required to hold these investments for the entire duration of the CLOs. To the extent that cash flows in the

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CLOs deteriorate, whether due to the COVID-19 pandemic or other factors, the Company could experience declining interest income and impairments on these investments.
A portion of the management fees the Company earns from its CLOs is subordinated to other obligations of the CLOs, including principal and interest on the notes issued by the CLOs. When certain overcollateralization tests are triggered, cash flows received on the underlying collateral in the CLOs that would have otherwise been distributed as subordinated management fees to the Company are redirected to pay principal and interest on the more senior obligations of the CLOs. In the second quarter of 2020, driven by the market and economic impacts of the ongoing COVID-19 pandemic and resulting ratings downgrades and defaults on certain of the collateral held by CLOs, certain impacted CLOs failed to satisfy one or more overcollateralization tests, and therefore, the Company has stopped recognizing management fees for these CLOs until the collateral tests are remedied and such fees are paid. The Company recovered a portion of those management fees in the third quarter, and as of September 30, 2020, the Company had approximately $8.3 million of subordinated management fees on a U.S. GAAP basis for which collection and revenue recognition has been deferred until certain overcollateralization tests have been cured. In the event the persistent market conditions do not sufficiently recover over the life cycle of these CLOs, the Company’s management fees from its securitization vehicles will continue to deteriorate. The Company will continue to evaluate its ability to collect these and any future fees; however, to the extent the overcollateralization tests in the CLOs have not been cured, the amount of fees for which collection and revenue recognition has been deferred would continue to increase, which would negatively impact the Company’s liquidity and the amounts it recognizes as revenue in future periods.
The Company has also evaluated its long-lived assets including operating lease assets and goodwill and has not identified any impairments to these assets as of September 30, 2020.
Company Structure
The Registrant is a holding company that, through Sculptor Corp, holds equity ownership interests in the Sculptor Operating Group. The Registrant had issued and outstanding the following share classes:
Class A Shares—Class A Shares are publicly traded and entitle the holders thereof to one vote per share on matters submitted to a vote of shareholders. The holders of Class A Shares are entitled to any distributions declared on the Class A Shares by the Registrant’s Board of Directors (the “Board”).
Class B Shares—Class B Shares are held by executive managing directors, as further discussed below. These shares are not publicly traded but rather entitle the executive managing directors to one vote per share on matters submitted to a vote of shareholders. These shares do not participate in the earnings of the Registrant, as the executive managing directors participate in the related economics of the Sculptor Operating Group through their direct ownership in the Sculptor Operating Group, subject to the Distribution Holiday discussed below.
The Company conducts its operations through the Sculptor Operating Group. The following is a list of the outstanding units of the Sculptor Operating Partnerships as of September 30, 2020:
Group A Units—Group A Units are limited partner interests issued to certain executive managing directors. Beginning on the final day of the Distribution Holiday (as defined in Note 3), each executive managing director may exchange his or her vested and booked-up (as defined below) Group A Units for an equal number of Class A Shares (or the cash equivalent thereof) over a period of two years in three equal installments commencing upon the final day of the Distribution Holiday and on each of the first and second anniversary thereof (or, for units that become vested and booked-up Group A Units after the final day of the Distribution Holiday, from the later of the date on which they would have been exchangeable in accordance with the foregoing and the date on which they become vested and booked-up Group A Units) (and thereafter such units will remain exchangeable), in each case, subject to certain restrictions. A “book-up” is achieved when sufficient appreciation has occurred to meet a prescribed capital account book-up target under the terms of the Sculptor Operating Partnership limited partnership agreements.

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Holders of Group A Units do not receive distributions during the Distribution Holiday. Group A Unit grants are accounted for as equity-based compensation. See Note 14 in the Company’s Annual Report on Form 10-K, as amended, for the year ended December 31, 2019, dated February 25, 2020 (“Annual Report”) for additional information. The Company completed a recapitalization in February 2019 (“Recapitalization”). See Note 3 for additional details. In connection with the Recapitalization each Group A Unit outstanding on the Recapitalization date was recapitalized into 0.65 Group A Units and 0.35 Group A-1 Units.
Group A-1 Units—Group A-1 Units are limited partner interests into which 0.35 of each Group A Unit was recapitalized in connection with the reallocation that was effectuated by the Recapitalization. The Group A-1 Units will be canceled at such time and to the extent that the Group E Units granted in connection with the Recapitalization vest and achieve a book-up. Group A-1 Units are not eligible to receive distributions at any time and do not participate in the net income (loss) of the Sculptor Operating Group. However, the holders of Group A-1 Units shall participate in any sale, change of control or other liquidity event that takes place prior to cancellation of the Group A-1 Units. In the Recapitalization, the holders of the 2016 Preferred Units (as defined below) forfeited an additional 749,813 Group A Units, which were recapitalized into Group A-1 Units.
Group B Units—Sculptor Corp holds a general partner interest and Group B Units in each Sculptor Operating Partnership. Sculptor Corp owns all of the Group B Units, which represent equity interest in the Sculptor Operating Partnerships. Except during the Distribution Holiday as described above, the Group B Units are economically identical to the Group A Units held by executive managing directors but are not exchangeable for Class A Shares and are not subject to vesting, forfeiture or minimum retained ownership requirements.
Group E Units—Group E Units are limited partner interests issued to certain executive managing directors that are only entitled to future profits and gains. Each Group E Unit converts into a Group A Unit and becomes exchangeable for one Class A Share (or the cash equivalent thereof) to the extent there has been a sufficient amount of appreciation for a Group E Unit to achieve a book-up target and, subject to other conditions contained in the limited partnership agreements of the Sculptor Operating Partnerships, the Distribution Holiday has ended (or an earlier exchange date is established by the Exchange Committee). The Group E Units are entitled to share in residual assets upon liquidation, dissolution or winding up and become eligible to participate in any tag along right, in a change of control transaction or other liquidity event only to the extent of their relative positive capital accounts (if any). In connection with the Recapitalization, all outstanding Group D Units, which were non-equity profits interests, converted into Group E Units on a one-for-one basis. Holders of Group E Units do not receive distributions during the Distribution Holiday. See Note 3 for additional information. Group E Unit grants are accounted for as equity-based compensation. See Note 14 in the Annual Report for additional information.
Group P Units—Group P Units are limited partner interests issued to certain executive managing directors that are only entitled to future profits and gains. Each Group P Unit becomes exchangeable for one Class A Share (or the cash equivalent thereof), in each case upon satisfaction of certain service and performance conditions at such time and, with respect to exchanges, to the extent there has been sufficient appreciation for a Group P Unit to achieve a book-up target and, subject to other conditions contained in the limited partnership agreements of the Sculptor Operating Partnerships, the Distribution Holiday has ended (or an earlier exchange date is established by the Exchange Committee). The Group P Units are entitled to share in residual assets upon liquidation, dissolution or winding up and become eligible to participate in any tag along right, in a change of control transaction or other liquidity event only to the extent that certain performance conditions are met and to the extent of their relative positive capital accounts (if any). The terms of the Group P Units may be varied for certain executive managing directors. Group P Unit grants are accounted for as equity-based compensation. See Note 14 in the Annual Report for additional information.
Preferred Units— The Preferred Units are non-voting preferred equity interests in the Sculptor Operating Partnerships. Preferred Units issued in 2016 and 2017 are collectively referred to as the “2016 Preferred Units.” The Preferred Units issued in 2019 are referred to as the “2019 Preferred Units.” See Note 10 for additional information.

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Executive managing directors hold a number of Class B Shares equal to the number of Group A Units, vested Group E Units, Group A-1 Units (to the extent the corresponding Class B Shares have not been canceled in connection with the vesting of certain Group E Units issued in connection with the Recapitalization, as further discussed in Note 3) and Group P Units held. Upon the exchange of a Group A Unit or a Group P Unit for a Class A Share, the corresponding Class B Share is canceled and a Group B Unit is issued to Sculptor Corp.
The following table presents the number of shares and units (excluding Preferred Units) of the Registrant and the Sculptor Operating Partnerships, respectively, that were outstanding as of September 30, 2020: