Firm of sanctioned Russians invested heavily in hedge funds

Firm of sanctioned Russians invested heavily in hedge funds

Firm of sanctioned Russians invested heavily in hedge funds

In recent years, LetterOne Holdings, the investment firm co-founded by Russians including Mikhail Fridman and Petr Aven, bet big on hedge funds and private equity with billionaires’ fortunes from the sale of a giant energy company.

Now that the pair is sanctioned in the European Union and the United Kingdom Following the Russian invasion of Ukraine, fund managers from London to New York are under pressure because of LetterOne’s billions of dollars invested in their funds, even though the company itself is not sanctioned and its founders have resigned.

An HSBC Holdings Plc fund that invests in multiple hedge funds had a $546.6 million allocation from LetterOne at the end of 2020, and a similar Blackstone Inc. vehicle had $435.1 million from the firm, according to the latest available records. .

Pamplona Capital Managementwhich oversees nearly $3 billion of LetterOnesaid last week that “started the process” to liquidate the company’s interests in the firm. Ed Eisler’s eponymous hedge fund, which was started with more than $100 million from LetterOne, returned all capital affected by international sanctions on March 10.

A spokesman for LetterOne he said in response to a question about the investments of company funds he has had “very few problems” apart from Capital Pamplona and Eisler Capital.

We have virtually no Russian capital in our entire company and we fully comply with all global sanctionssaid a spokeswoman for Blackstone it’s a statement. When asked if the investment of LetterOne Luxembourg-based company was liquidated, said the firm cannot comment on individual investors.

LetterOne he also had over $200 million in an alternative asset manager called Tyrus Capital at the end of 2020, although its position has since been reduced.

A spokesman for Tyrus Capital he declined to comment.

Fridman and Aven gave up LetterOne earlier this month after they were sanctioned by the EUa measure they described as “malicious” and said they plan to contest. They are valued at $10 billion and $5.4 billion, respectively, according to the Bloomberg Billionaires Index.

On Tuesday, the EU also sanctioned his fellow shareholders of LetterOne, Khan and Alexei Kuzmichev, who resigned from the firm earlier this month. A representative for Kuzmichev did not immediately respond to requests for comment.

Khan, a native of Ukraine, described the destruction of the cities where he spent his childhood as “heartbreaking”.

Source: Gestion

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