Jared Kushner's Post-White House $2 Billion Saudi Investment Sparked Ethical Debate and Saudi Skepticism Due to 'Inexperience' and 'Public Relations Risks' - Yahoo Finance | Canada News Media
Jared Kushner's Post-White House $2 Billion Saudi Investment Sparked Ethical Debate and Saudi Skepticism Due to 'Inexperience' and 'Public Relations Risks' – Yahoo Finance
Just months after leaving the White House in 2021, Jared Kushner secured a $2 billion investment from a Saudi crown prince-led fund, despite objections from the fund’s advisers about the deal.
A panel that screens investments for the Saudi sovereign wealth fund expressed concerns about Kushner’s new private equity firm, Affinity Partners. According to The New York Times, they cited issues like the firm’s inexperience, the possibility of the kingdom bearing most of the investment risk, unsatisfactory due diligence on the firm’s operations, an excessive asset management fee, and public relations risks due to Kushner’s previous role as a senior adviser to President Trump.
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However, the full board of the $620 billion Public Investment Fund, led by Crown Prince Mohammed bin Salman, overruled the panel. This deal raised ethical concerns, as it could be seen as kickback for Kushner’s actions in the White House or an attempt to gain favor as Trump seeks another presidential term in 2024.
Kushner’s close ties to the Saudi crown prince, including his defense of him after the Khashoggi murder, have also drawn attention. Interestingly, the Saudi fund invested twice as much with Kushner compared to former Treasury Secretary Steven Mnuchin, even though Mnuchin had a successful investment record before entering government.
In response, a spokesperson for Kushner’s firm highlighted their careful screening criteria for investors, while the Saudi fund declined to comment on its investment process. The deal’s documents reveal that Kushner’s venture heavily relies on Saudi money.
Kushner initially aimed to raise up to $7 billion, primarily from Saudi Arabia, but has secured few other major investors. As of the most recent filing, his firm reported $2.5 billion under management, primarily from overseas investors.
Both Kushner and Mnuchin offered the Saudi fund discounts on asset management fees and a share of fund profits. However, the Saudis agreed to pay a lower fee to Mnuchin’s firm.
The debate within the Saudi fund over investing in Kushner’s firm was in clear contrast to the easy approval of Mnuchin’s proposal. Mnuchin’s fund focused on cybersecurity, financial technology, and entertainment, aligning with Saudi priorities, while Kushner’s firm lacked a clear focus.
Kushner’s lack of private equity experience and unsatisfactory due diligence findings were acknowledged but attributed to the firm’s early stages. The Saudi fund stipulated conditions for Kushner’s firm to draw down the investment.
Despite objections from some panel members, the board ultimately approved the deal, citing the aim of forming a strategic relationship with Affinity Partners and Jared Kushner.
This week it was announced that Affinity Partners is making its first investment in Israel by acquiring a $150 million minority stake in an Israeli car company. In this transaction, Affinity will purchase a 15% stake in the car and credit division of S Shlomo Holdings Ltd, a closely held Israeli company. The investment was disclosed in a filing on September 6th.
The investment raises questions about the strategic direction of Affinity Partners and its growing international portfolio.
TORONTO – Canada’s main stock index was down more than 200 points in late-morning trading, weighed down by losses in the technology, base metal and energy sectors, while U.S. stock markets also fell.
The S&P/TSX composite index was down 239.24 points at 22,749.04.
In New York, the Dow Jones industrial average was down 312.36 points at 40,443.39. The S&P 500 index was down 80.94 points at 5,422.47, while the Nasdaq composite was down 380.17 points at 16,747.49.
The Canadian dollar traded for 73.80 cents US compared with 74.00 cents US on Thursday.
The October crude oil contract was down US$1.07 at US$68.08 per barrel and the October natural gas contract was up less than a penny at US$2.26 per mmBTU.
The December gold contract was down US$2.10 at US$2,541.00 an ounce and the December copper contract was down four cents at US$4.10 a pound.
This report by The Canadian Press was first published Sept. 6, 2024.
TORONTO – Canada’s main stock index was up more than 150 points in late-morning trading, helped by strength in technology, financial and energy stocks, while U.S. stock markets also pushed higher.
The S&P/TSX composite index was up 171.41 points at 23,298.39.
In New York, the Dow Jones industrial average was up 278.37 points at 41,369.79. The S&P 500 index was up 38.17 points at 5,630.35, while the Nasdaq composite was up 177.15 points at 17,733.18.
The Canadian dollar traded for 74.19 cents US compared with 74.23 cents US on Wednesday.
The October crude oil contract was up US$1.75 at US$76.27 per barrel and the October natural gas contract was up less than a penny at US$2.10 per mmBTU.
The December gold contract was up US$18.70 at US$2,556.50 an ounce and the December copper contract was down less than a penny at US$4.22 a pound.
This report by The Canadian Press was first published Aug. 29, 2024.
The crypto market has recently experienced a significant downturn, mirroring broader risk asset sell-offs. Over the past week, Bitcoin’s price dropped by 24%, reaching $53,000, while Ethereum plummeted nearly a third to $2,340. Major altcoins also suffered, with Cardano down 27.7%, Solana 36.2%, Dogecoin 34.6%, XRP 23.1%, Shiba Inu 30.1%, and BNB 25.7%.
The severe downturn in the crypto market appears to be part of a broader flight to safety, triggered by disappointing economic data. A worse-than-expected unemployment report on Friday marked the beginning of a technical recession, as defined by the Sahm Rule. This rule identifies a recession when the three-month average unemployment rate rises by at least half a percentage point from its lowest point in the past year.
Friday’s figures met this threshold, signaling an abrupt economic downshift. Consequently, investors sought safer assets, leading to declines in major stock indices: the S&P 500 dropped 2%, the Nasdaq 2.5%, and the Dow 1.5%. This trend continued into Monday with further sell-offs overseas.
The crypto market’s rapid decline raises questions about its role as either a speculative asset or a hedge against inflation and recession. Despite hopes that crypto could act as a risk hedge, the recent crash suggests it remains a speculative investment.
Since the downturn, the crypto market has seen its largest three-day sell-off in nearly a year, losing over $500 billion in market value. According to CoinGlass data, this bloodbath wiped out more than $1 billion in leveraged positions within the last 24 hours, including $365 million in Bitcoin and $348 million in Ether.
Khushboo Khullar of Lightning Ventures, speaking to Bloomberg, argued that the crypto sell-off is part of a broader liquidity panic as traders rush to cover margin calls. Khullar views this as a temporary sell-off, presenting a potential buying opportunity.
Josh Gilbert, an eToro market analyst, supports Khullar’s perspective, suggesting that the expected Federal Reserve rate cuts could benefit crypto assets. “Crypto assets have sold off, but many investors will see an opportunity. We see Federal Reserve rate cuts, which are now likely to come sharper than expected, as hugely positive for crypto assets,” Gilbert told Coindesk.
Despite the recent volatility, crypto continues to make strides toward mainstream acceptance. Notably, Morgan Stanley will allow its advisors to offer Bitcoin ETFs starting Wednesday. This follows more than half a year after the introduction of the first Bitcoin ETF. The investment bank will enable over 15,000 of its financial advisors to sell BlackRock’s IBIT and Fidelity’s FBTC. This move is seen as a significant step toward the “mainstreamization” of crypto, given the lengthy regulatory and company processes in major investment banks.
The recent crypto market downturn highlights its volatility and the broader economic concerns affecting all risk assets. While some analysts see the current situation as a temporary sell-off and a buying opportunity, others caution against the speculative nature of crypto. As the market evolves, its role as a mainstream alternative asset continues to grow, marked by increasing institutional acceptance and new investment opportunities.
