UPDATE 1-Och-Ziff reports higher distributable income, beats forecasts

Nov 2 (Reuters) - Och-Ziff Capital Management reported on Friday a higher quarterly profit which beat Wall Street's forecasts, as the investment manager paid lower taxes and cut compensation costs but earned higher performance fees on its hedge funds.

The company, one of only a handful of publicly traded hedge fund firms, reported distributable earnings, which exclude costs related to its November 2007 initial public offering, of $61.7 million, or 14 cents per adjusted Class A share, beating Wall Street's 13 cent per share forecast. A year before the company earned $49.9 million, or 12 cents a share.

New York-based Och-Ziff reported a net loss of $127.5 million, or 89 cents per share, largely due to expenses from the IPO.

Assets under management stood at $31.3 billion at the end of the quarter on Sept. 30 and have climbed more in the last weeks to stand at $31.8 million on Nov. 1.

All four of Och-Ziff's funds are in the black for the year with most beating the average hedge funds' returns. Steady and strong returns boosted assets, as did fresh demand, the company said.

The company will pay a third-quarter dividend of 12 cents a share, down from the 13 cents a share it paid for the second quarter, when incentive income was higher.