MBS forced Investment Fund to give Kushner $2B: NYT
4 Min Read
The Saudi Public Investment Fund approves a $2 billion investment for Jared Kushner despite his "little experience" in private equity.
-
Jared Kushner and Saudi Crown Prince Mohammad bin Salman
The Saudi Public Investment Fund (PIF) secured a $2 billion investment for former US President Donald Trump's son-in-law, Jared Kushner, in spite of objections and doubts from the fund's advisers, The New York Times reported.
According to the newspaper, previously undisclosed documents reveal that "A panel that screens investments for the main Saudi sovereign wealth fund cited concerns about the proposed deal with Mr. Kushner’s newly formed private equity firm, Affinity Partners."
The panel's meeting minutes last June 30 indicated that the advisers' concerns included “the inexperience of the Affinity Fund management,” the possibility that Saudi Arabia would be responsible for “the bulk of the investment and risk," the firm’s "unsatisfactory" operations, an "excessive" proposed asset management fee,” and “public relations risks” from Kushner’s prior role as a former senior Trump adviser, the Times pointed out.
Nevertheless, the PIF's full board led by Saudi Crown Prince Mohammad bin Salman overruled the panel.
"Ethics experts say that such a deal creates the appearance of potential payback for Mr. Kushner’s actions in the White House — or of a bid for future favor if Mr. Trump seeks and wins another presidential term in 2024," the New York Times mentioned.
Saudi fund allegedly "operates autonomously"
It is noteworthy that Kushner defended bin Salman following US investigations that accused the Crown Prince of approving the murder of Saudi journalist Jamal Khashoggi in 2018.
The New York Times highlighted that the PIF agreed to invest twice as much with Kushner than it did with former US Treasury Secretary Steven Mnuchin who was seeking a new fund.
The documents show that, unlike Kushner, Mnuchin was already a successful investor before being appointed as a secretary.
"In its most recent public filings with the Securities and Exchange Commission, dated March 31, Mr. Kushner’s firm reported that its main fund had $2.5 billion under management, almost entirely from investors based overseas. Most of that appears to be the $2 billion from Saudi Arabia," the Times underscored
In return for its investment, the PIF would receive a stake of at least 28% in Kushner’s main investments, the documents showed.
The Saudi fund allegedly "operates autonomously", however, Crown Prince Mohammad bin Salman is its topmost decision-maker.
A huge defender of bin Salman
According to the Times, Kusher "has little experience or track record in private equity. Before working in the White House, he ran his family’s commercial real estate empire, sometimes with disappointing results."
"His best-known deal was the $1.8 billion purchase of the office tower at 666 Fifth Avenue in Manhattan, in 2007; the building’s mortgage became a crippling liability when the recession hit the next year," the newspaper noted.
While in office, Kushner helped mediate the so-called "Abraham Accords" that normalized ties between some Arab states and "Israel", and continued his efforts even after leaving the White House.
The Times said Trump's son-in-law also "helped broker $110 billion in weapons sales to Saudi Arabia over 10 years," and protected the Saudi regime from congressional outrage over the murder of Khashoggi and the war on Yemen.
According to the documents, a Saudi staff wrote that Kushner was hoping to avoid media attention, and that's the reason he approached the PIF instead of US investors.
Kushner's proposal approved after raised to bin Salman
The board committee evaluating Kushner’s proposal referred to it as "Project Astro".
"The Affinity principal would like to avoid media attention at this time. Accordingly, Affinity has approached international institutional investors on a very discreet basis (especially PIF as Affinity’s cornerstone LP) to anchor the launch of their inaugural fund," the document read.
The four-panel members “stated that they are not in favor of Project Astro,” the documents showed. Following that, the panel’s chairperson Yasir Al-Rumayyan -chairman of Saudi Aramco - suggested raising the panel's decision to Crown Prince Mohammad bin Salman. Fews days later, the board approved the deal.
