Bloomberg News reports that Och-Ziff Capital Management Group LLC, the hedge-fund company run by former Goldman Sachs Group Inc. (NYSE: GS) equities trader Daniel Och, filed to raise $2 billion in an initial public offering. Och-Ziff managed $26.8 billion for 700 fund investors as of April 30. The $2 billion will be used to buy equity held by Och-Ziff owners, and its 18 partners will be required to reinvest the proceeds in funds managed by the firm for five years.

Och-Ziff appears to be a good performer, with industry standard fees. According to DealBook, it charges a management fee of 1.5% to 2.5% on its assets under management, and it takes 20% of the profits earned by its funds. Since its inception in 1994, Och-Ziff's flagship fund has generated annual returns of 17% after fees, better than the 11.6% return posted by the S&P 500 index during the same period.

This deal is more comparable to the Fortress Investment Group (NYSE: FIG) IPO in February than the Blackstone Group LLP (NYSE: BX) one last month. With $36 billion under management and a market capitalization of $9.5 billion, the market is valuing each of Fortress's dollars managed at 27 cents. This is much lower than the 41 cents per dollar of assets under management at Blackstone -- based on $78.7 billion managed and a market capitalization of $31.9 billion.

Applying the Fortress valuation, I'd say that Och-Ziff should have a market capitalization of $7.2 billion. We'll soon see.

Peter Cohan is president of Peter S. Cohan & Associates, a management consulting and venture capital firm. He also teaches management at Babson College and edits The Cohan Letter. He has no financial interest in the securities mentioned in this post.

Och-Ziff Capital, a hedge fund with $26.8 billion in assets, got its start 13 years ago. The founders include Daniel Och, a former operator at Goldman Sachs Group (NYSE: GS), and members of the Ziff family. Apparently, now it's time to take some money off the table, and Och-Ziff has filed to go public.

The goal of the fund: "Deliver consistent positive, risk-adjusted returns throughout market cycles, with a focus on risk management and capital preservation." However, if you look at the average returns for the past three years -- 12.2% -- you could have actually done just as well with an S&P 500 index fund (and not have had to pay the hefty fees or agree to lockups). But, hey, in the rarefied world of the wealthy, things don't always make much sense.

The lead underwriters include Goldman Sachs and Lehman Brothers (NYSE: LEH). The proposed ticker is OZM, and the prospectus can be reviewed on the SEC Web site.

Tom Taulli is the author of various books, including the Complete M&A Handbook and the EDGAR-Online Guide to Decoding Financial Statements.