A $32 billion hedge fund bet its future on a 34-year old - and there is a $280 million pay package on the line

Och-Ziff Capital Management, the 23-year-old hedge fund founded by its namesake Dan Och, is bleeding money.

The firm lost a third of its assets after pleading guilty to conspiracy charges last September. It agreed to pay a $412 million fine after a lengthy government investigation accused managers of paying bribes to government officials in several African countries.

Now, with its stock still less than a fifth of pre-scandal highs, the $32 billion fund is turning to young blood in hopes of a renaissance.

Jimmy Levin, a 34-year-old Harvard alum who joined the firm in 2006, was promoted to co-chief investment officer in February and given a $280 million incentive to turn the firm around.

Now, five months into Levin's leadership, staff at the firm and other Wall Street players are still questioning Levin's out-of-nowhere promotion, according to a report from Bloomberg's Sridhar Natarajan and Katia Porzecanski.

"It's a bet he's making, just as he was making on any of his investments," Adam Kahn, a managing partner at the executive-search firm Odyssey Search Partners, told Bloomberg. "Dan probably likes the risk-reward in the package he's giving to Jimmy."

And it's a steep risk-reward structure, too.

In order to pocket the full $280 million, Levin must stay for three years and Och-Ziff's stock must return 125%, including dividends.

So far, Levin's approach seems to be working.

The firm's master fund reported year-to-date returns of 7.5% last month, and its stock price is slowly climbing out of the doldrums, closing at $3.07 Monday afternoon.

"It's definitely been a challenging time," Levin told Bloomberg. "But to move forward we're just focused on what we can influence, and that's our investing."

You can read the full Bloomberg report here.