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Och-Ziff changes leadership, co-CIO Windreich to retire -letter

(Adds detail on performance, background)

By Svea Herbst-Bayliss

BOSTON, June 28 (Reuters) - Och-Ziff Capital Management Group LLC is putting a new generation into top leadership positions roughly five months after bringing in an outsider as chief executive to end a battle for control of the investment firm.

The New York-based firm told investors in a letter sent on Thursday and seen by Reuters that Jeff Lin had been promoted to head of U.S. equities, Ghassan Ayoub will run convertible and derivative arbitrage alone and Peter Wallach was named head of risk management. The firm invests $33 billion.

David Windreich, who founded Och-Ziff with Dan Och in 1994, will retire, leaving James Levin as the firm's sole chief investment officer.

The announcement signals that Robert Shafir, who joined as chief executive officer in February, is revamping the once-vaunted investment firm, generally known as OZ Management.

Its reputation was tarnished by a bribery scandal and rocked late last year when a succession plan laid out by one of its founders exploded.

Och had tapped Levin to succeed him but abruptly changed his mind late last year, telling investors it was "not the right time" to promote Levin to the top job.

Besides Windreich, two other top executives will leave the firm this year. Hal Kelly, who ran convertible and derivative arbitrage with Ayoub, is retiring and Zoltan Varga, who oversees investments in Asia, will retire at the end of July.

In addition to that trio leaving, next year Och, who is chairman of the company, will give up that position, further signalling a generational turnover.

At the same time, Och-Ziff told clients that it will no longer make private equity energy investments and that its small team of professionals will leave the firm later this year.

As one of the world's biggest hedge fund firms and one of only a handful of publicly traded ones, Och-Ziff had long stayed out of the limelight with its executives rarely presenting at industry conferences and Och declining most interview requests.

Now the firm is rebuilding after having paid a $412 million fine to settle criminal and civil charges that it committed bribery in Africa. Investor concern about the scandal prompted many clients to exit, shrinking the firm's assets by more than $10 billion since 2016. Assets are growing and performance has been solid. In the first five months of the year, the OZ Master Fund returned 4.17 percent.

(Reporting by Svea Herbst-Bayliss Editing by Dan Grebler and Lisa Shumaker)