Oppenheimer Capital Reports 37.3% Increase In Net Income Per Unit, Excluding The Dual Purpose Fund Sale, For The First Fiscal Quarter.

NEW YORK--(BUSINESS WIRE)--Aug. 26, 1997--Oppenheimer Capital, L.P. (the "Partnership") (NYSE:OCC) today reported net income of $18.9 million or $1.21 per unit for the first fiscal quarter ended July 31, 1997.

Included in net income is the Partnership's share of a gain recorded by Oppenheimer Capital (the "Operating Partnership") resulting from the sale of the investment advisory and other contracts and business relationships for its Quest for Value Dual Purpose Fund (the "Dual Purpose Fund sale") to OppenheimerFunds, Inc. ("OFI"), which company is unrelated to the Operating Partnership. The Partnership recorded a gain of $2.8 million or 18 cents per unit during the quarter from the Dual Purpose Fund sale.

Net income (excluding the Dual Purpose Fund sale) for the fiscal quarter ended July 31, 1997 was $16.1 million or $1.03 per unit, compared to $11.6 million or 75 cents per unit for the fiscal quarter ended July 31, 1996, a per unit increase of 37.3%.

The Partnership's sole business is the ownership of a 67.6% general partner interest in the Operating Partnership, a leading investment management firm. The Partnership's net income is based on its proportionate share of the Operating Partnership's net income plus interest income, primarily from a $32,193,000 par value 10% note.

Distributions

As previously announced on July 21, 1997, the partnership increased its regular quarterly distribution rate from $.85 to $.95 per unit, for a new annual rate of $3.80 per unit. Cash distributions are based on cash flow, which represents a combination of net income plus certain expenses which do not require the outlay of cash, principally amortization of goodwill and restricted unit compensation expense.

The Partnership expects to continue its policy of reviewing the quarterly distribution rate and making changes, as appropriate, based on earnings and on the business outlook for the Operating Partnership.

Results of the Operating Partnership

George A. Long, Oppenheimer Capital's Chairman and Chief Executive Officer, reported that the Operating Partnership reached new highs for assets under management, investment management fee revenue and operating income.

-- Total assets under management were $60.8 billion at July 31, 1997, up 50.5% from $40.4 billion at July 31, 1996. For the quarter ended July 31, 1997, average assets under management were $55.8 billion, up 35.8% from the year earlier period.

-- Investment management fee revenue for the quarter ended July 31, 1997 increased 34.6% to $53.1 million from $39.4 million for the year earlier period.

-- Operating income for the quarter ended July 31, 1997 rose 40.3% to $24.7 million from $17.6 million for the year earlier period.

The growth in investment management fee revenue was tempered by the Dual Purpose Fund sale on February 28, 1997. Concurrent with the sale, the Quest for Value Dual Purpose Fund converted from a closed-end fund to an open-end fund (mutual fund) and was renamed the Oppenheimer Quest Capital Value Fund. The Operating Partnership now serves as subadviser to the fund at a substantially lower fee rate than it earned as adviser prior to the sale.

Long said, "Assets under management and investment management fee revenue continued to benefit from the strong performance of the U.S. equity market. In addition, we continued to experience growth in our separate account business, the management of separate accounts for large financial institutions and high-net-worth individual investors, as well as our retail businesses, including mutual funds, variable annuities and wrap fee accounts. New business remained strong as we added $1.9 billion and $5.5 billion in net new assets under management for the three and 12 months ended July 31, 1997, respectively."

He added, "The rate of expense growth has been reduced as a result of our withdrawal from the distribution of unit investment trusts during the fourth quarter of fiscal 1997 and the sale of the Operating Partnership's 50% interest in Saratoga Capital on April 29, 1997. Partially offsetting these expense reductions were additions to staff to support our growing business, increased compensation and benefits as a result of staff salary increases, and higher incentive compensation costs primarily as a result of increased new business and record operating profits."

CONTACT: Oppenheimer Capital, L.P.

Sheldon Siegel 

212/504-1610