Och-Ziff drops Levin as CEO pick

Och, 56, said in the note that after conferring with the board, he decided that it wasn't the right time for Levin to take over, according to the people

Dan Och’s note to clients two days before Christmas, telling them that star trader Jimmy Levin wasn’t going to get the top job at Och-Ziff Capital Management Group after all, shows how tough succession can be at hedge funds.

Och, who founded Och-Ziff more than two decades ago and is still its chief executive officer, told clients that he had changed his mind about Levin and would seek a successor from the outside, according to people familiar with the firm, who asked not to be identified because the information is private.

Och, 56, said in the note that after conferring with the board, he decided that it wasn’t the right time for Levin, 34, to take over, according to the people. He added that he hoped Levin would remain co-chief investment officer. Och didn’t give a reason for his change in thinking. He shocked Wall Street in February when he promoted Levin and awarded him an incentive package worth as much as $280 million.

Several hedge fund founders have been vexed recently with succession planning, a process that can be disruptive to clients and staff. Levin’s rapid rise upset some people at the firm, and a few executives have departed. In March, billionaire Ray Dalio, who started Bridgewater Associates in 1975, announced the second shakeup within a year at the top ranks of his $160 billion firm. Israel Englander, chief of Millennium Management, was caught off guard in January when his potential successor abruptly resigned with plans to start a competitor. 

George Soros and Seth Klarman have also struggled to prepare the next generation of leadership at their firms.