Three Financial IPOs: Chimera Investment, MSCI, Och-Ziff Capital Mangement Group

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Includes: CIM, MXB, OZM
by: Abbi Adest

There are three financial IPOs on deck for this week: Chimera Investment Corp. (NYSE:CIM), a subsidiary REIT of Annaly, a NYSE listed REIT; MSCI (MXB), a spinoff of Morgan Stanley’s index products and analytics business; and Och-Ziff Capital Management (NYSE:OZM), an international hedge fund with over $30 billion in assets under management.

All quotations are from the companies' most recent S-1 filings with links provided.

CHIMERA INVESTMENT CORP (CIM)


Business Overview (from prospectus)

We are a newly-formed specialty finance company that will invest in residential mortgage loans, residential mortgage-backed securities, or RMBS, real estate-related securities and various other asset classes. We will be externally managed by Fixed Income Discount Advisory Company, or FIDAC, a wholly-owned subsidiary of Annaly, a New York Stock Exchange-listed REIT, which has a long track record of managing investments in U.S. government agency mortgage-backed securities. Concurrent with this offering, Annaly will acquire 9.8% of our outstanding shares of common stock after giving effect to the shares issued in this offering, excluding shares sold pursuant to the underwriters’ exercise of their overallotment option and shares of our restricted common stock approved to be granted to our executive officers and employees of our Manager and to our independent directors. We intend to elect and qualify to be taxed as a real estate investment trust, or REIT, for federal income tax purposes.

Offering: 33.3 million shares at $15.00 per share. Net proceeds of approximately $ 469.0 million will be invested in prime and Alt-A mortgage loans, non-Agency RMBS, Agency RMBS and ABS, CDOs, CMBS and other consumer or non-consumer ABS.

Lead Underwriters: Merrill Lynch, Credit Suisse, Deutsche Bank

Financial Highlights:

As of the date of this prospectus, we have not commenced any significant operations because we are in our organization stage. We will not commence any significant operations until we have completed this offering. We are not aware of any material trends or uncertainties, other than economic conditions affecting mortgage loans, mortgage-backed securities and real estate, generally, that may reasonably be expected to have a material impact, favorable or unfavorable, on revenues or income from the acquisition of real estate-related investments, other than those referred to in this prospectus.

Additional Resources:

MSCI (MXB)
Business Overview (from prospectus)

We are a leading provider of investment decision support tools to investment institutions worldwide. We produce indices and risk and return portfolio analytics for use in managing investment portfolios. Our products are used by institutions investing in or trading equity, fixed income and multi-asset class instruments and portfolios around the world. Our flagship products are our international equity indices marketed under the MSCI brand and our equity portfolio analytics marketed under the Barra brand. Our products are used in many areas of the investment process, including portfolio construction and optimization, performance benchmarking and attribution, risk management and analysis, index-linked investment product creation, asset allocation, investment manager selection and investment research.

Offering: 14.0 million shares at $14.00 - $16.00 per share. Net proceeds of approximately $190.3 million will be used to pay a portion of the $625.9 million demand note held by Morgan Stanley.

Lead Underwriters: Morgan Stanley, Banc of America

Financial Highlights:

Revenues increased $39.1 million, or 17%, to $268.2 million for the nine months ended August 31, 2007, compared to the same period in 2006... Total operating expenses of $179.1 million for the nine months ended August 31, 2007 were $25.4 million, or 16%, higher compared to the same period in 2006... Cost of services increased $14.9 million, or 19%, to $92.0 million for the nine months ended August 31, 2007 compared to the same period in 2006... Selling, general and administrative expenses increased $10.8 million, or 19%, to $67.9 million for the nine-month period ended August 31, 2007 compared to the nine-month period ended August 31, 2006.

Additional Resources:

OCH-ZIFF CAPITAL MANAGEMENT GROUP LLC (OZM)
Business Overview (from prospectus)

Our funds seek to deliver consistent positive, risk-adjusted returns throughout market cycles, with a focus on risk management and capital preservation. “Risk-adjusted returns” are based on the income generated from primary investment positions, net of expenses associated with hedges intended to limit the risks associated with market changes, interest rate fluctuations, currency movements, geopolitical events and other risks. Our diversified, multi-strategy approach combines global investment strategies, including merger arbitrage, convertible arbitrage, equity restructuring, credit and distressed credit investments, private equity and real estate. We base our investment decisions on detailed, research-based analysis and thorough due diligence. Our investment philosophy focuses on opportunities for long-term value. Our investment processes are designed to incorporate risk management into every investment decision: our portfolio managers meet with our analysts daily to review the risks related to their positions and the inherent risks associated with these positions, and we have a risk management committee that conducts regular oversight of portfolio risk. Risk management has been a core foundation of our business since inception and remains a critical part of our investment process today.

Offering: 36.0 million shares at $30.00 - $33.00 per share. Net proceeds of approximately $1.1 billion will be contributed to intermediate holding companies which will then contribute all of the proceeds received from OZM to the Och-Ziff Operating Group, which in turn will immediately apply all of those proceeds to purchase 74,138,571 Och-Ziff Operating Group A Units.

Lead Underwriters: Goldman Sachs, Lehman Brothers

Financial Highlights:

Management fees increased by $171.0 million, or 1,663%, to $181.3 million for the nine months ended September 30, 2007 compared to $10.3 million for the comparable period in 2006... Och-Ziff funds income decreased by $113.7 million, or 18%, to $534.7 million for the nine months ended September 30, 2007 compared to $648.5 million for the comparable period in 2006... Compensation and benefits expenses increased by $364.1 million, or 195%, to $550.8 million for the nine months ended September 30, 2007 compared to $186.7 million for the comparable period in 2006... Profit sharing expenses increased by $77.6 million, or 290%, to $104.4 million for the nine months ended September 30, 2007 compared to $26.8 million for the comparable period of 2006.

Additional Resources:

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