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Sculptor Capital Management (SCU) shareholder Daniel Och has been contacted by third parties about potential transactions

October 4, 2022 7:42 AM EDT

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(Updated - October 4, 2022 7:49 AM EDT)

(Updated - October 4, 2022 7:45 AM EDT)

Sculptor Capital Management (NYSE: SCU) shareholder Daniel S. Och:

On October 4, 2022, the Reporting Person sent a letter (the “Letter”) to the Board of Directors of the Issuer (the “Board”) in which the Reporting Person advised the Board that the Reporting Person has been contacted by third parties regarding the Issuer, including with respect to transactions that could result in the acquisition of control or significant influence over the Issuer by such third parties, and include one or more of the types of transactions described in clauses (a) through (j) of Item 4 of Schedule 13D (any such transaction, a “Potential Transaction”). In addition to the Letter, the Reporting Person is considering what steps, if any, may be appropriate from time to time in light of such third party inquiries. Such steps may include, without limitation, engaging in discussions with or responding to inquiries from potential acquirors of the Issuer, the Issuer, the Board, the management team of the Issuer, other stockholders of the Issuer and/or other persons, engaging financial, legal and other professional advisors and taking any actions in or out of the ordinary course of business to facilitate or increase the likelihood of consummation of a Potential Transaction.

The Letter is attached hereto as Exhibit 25. The foregoing description of the Letter does not purport to be complete and is qualified in its entirety by reference to Exhibit 25 to this Statement and is incorporated herein by reference.

In addition, Mr. Och expects to continue to monitor and evaluate his investment in the Issuer from time to time in light of his personal investment objectives, his life goals, personal opportunities and priorities and may in the future take such actions with respect to his investment in the Class A Shares as he deems appropriate in light of the circumstances existing at such time. Such actions may include sales of (or other dispositions of his economic interest in) Class A Shares in the open market, in secondary public offerings and in private transactions, in each case, as Mr. Och may deem appropriate based on, among other things, his personal investment objectives, his life goals, personal opportunities and priorities.

Although the foregoing represents the range of actions currently contemplated by the Reporting Person with respect to the Class A Shares, the possible actions of the Reporting Person either alone or with one or more third parties with respect to the Class A Shares are subject to change at any time and the Reporting Person may formulate plans or proposals with respect to one or more of the foregoing and any other matters as he may determine in his sole discretion in the future.

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Board of Directors

Sculptor Capital Management, Inc.

9 West 57th Street

39th Floor

New York, New York 10019

Dear Sculptor Board Members,

As a founder and a substantial stockholder of, and investor with, Sculptor Capital Management, Inc. (the “Company”), I care deeply about the Company’s stockholders, investors, employees and reputation. I have become increasingly concerned, especially over the past two years, that the Company’s board has failed to discharge its duties by, among other things, enabling and enriching a management team that is more focused on its own compensation than the Company’s future. Independent observers, such as ISS, have expressed similar concerns, and the Company’s investment returns and share price have suffered greatly over this same period of time.

Last month, several founding partners and I filed a lawsuit seeking increased transparency about the recent activities of the Company. Since the filing, I, as well as other founding partners, have been contacted by several third parties who have asked us whether the Company might be open to a strategic transaction that would not involve current senior management continuing to run the Company. It is not surprising that third parties would see the potential for such a transaction given that outside analysts have previously identified the Company’s management issues and concluded that, at its current trading price, the Company may be worth less than the sum of its parts.

I have advised these third parties that I would support consideration of any transaction that would benefit all the stockholders. Among other possibilities, I believe that the Company should be an attractive target for a well-managed asset manager that has the resources to maximize the potential of the Company’s platform as a publicly-traded asset manager. A combination of such a manager with the Company could provide: (a) a growth vehicle for that manager, (b) new, prudent leadership for the Company and (c) an opportunity for current stockholders to participate in future growth. I plan to provide this feedback to any additional third parties that contact me about the Company. I also may decide to have further discussions with one or more of these third parties. Since I have no role in managing or supervising the Company, I would not be surprised if one or more of these third parties decides to contact the Board or the Company to discuss their interest.

I am writing now to advise you of these inquiries and to remind you of your own fiduciary obligations to the Company’s stockholders. I fear that the Board’s prior actions (and omissions) have facilitated the entrenchment of the Company’s existing management team (despite its poor performance). The Company cannot afford for the Board to continue to put the interests of management above those of stockholders. Specifically, no bids should be favored or disfavored based on whether the Company’s existing management team would continue to run the Company or any part of it following a transaction. Any potential transaction should be considered based solely on the best interests of all stockholders, and any director beholden to management or who otherwise cannot fulfill that duty should be recused from the Board’s deliberations.


I also am writing to advise you that I have reason to believe that one or more representatives of senior management has reached out to one or more third parties about a potential transaction. Based on prior experience, I fear that the Board may not be aware of this outreach, and I strongly suggest that the Board take complete control of this process. During the process, I expect you to give any inquiries or proposals careful consideration, and to discharge your fiduciary duties under Delaware law on behalf of all stockholders of the Company. I urge the Board to act on any inquiries or proposals in a timely manner. As you are all aware, the Company’s performance issues over the last two years have put the core business at risk. I believe that making clear to fund investors that there is a better path forward, sooner rather than later, will be beneficial to all the Company’s stakeholders.

In light of the foregoing, I am keeping all options on the table and am open to having any discussions with the Board that are designed to achieve the best outcome for all stockholders.

Sincerely,

/s/ Daniel S. Och

cc:

Andrew J. Levander, Dechert LLP

Kenneth E. Young, Dechert LLP

David M. Levine, Sculptor Capital Management, Inc.



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