Kushner founded a private equity firm, Affinity Fund, just after leaving the White House in the beginning of 2021
Jared Kushner secured a $2 billion investment in his private equity firm from Saudi Arabia’s state-owned sovereign wealth fund just six months after the end of the Trump administration, a new report claimed on Sunday.
Kushner, Donald Trump’s son-in-law and former White House senior adviser, secured the massive deal despite being flagged for its ‘inexperience’ and ‘public relations risks’ by a panel of economics experts who screen the wealth fund’s investments, the New York Times reports.
During his time in the White House, Kushner was known for his close personal relationship with Saudi Arabia’s de facto leader Mohammed bin-Salman and for helping him secure a $110 billion arms deal. He was among the Saudi royal family’s staunchest defenders within the administration amid international outrage over its murder of US-based journalist and MBS critic Jamal Khashoggi.
He also was one of the chief architects of the Abraham Accords, a historic peace agreement between some Arab states and Israel which MBS was in support of.
But when it comes it his experience running a new private equity firm, the Saudi panel reportedly found Kushner’s Affinity Fund to be ‘unsatisfactory in all aspects.’
The panel also expressed serious reservations about Kushner’s limited areas of expertise and lack of domestic investors.
Despite that, however, the $620 billion Public Investment Fund (PIF) reportedly led by MBS approved the $2 billion just days after business experts raised their concerns at a June 30 meeting.
It’s twice the amount they invested in Trump Treasury Secretary Steve Mnuchin’s firm, despite Mnuchin’s vast experience in the financial industry.
The Saudis’ PIF also reportedly got at least 28 percent ownership of Kushner’s company in the deal.
A letter obtained by the Times from July of that year shows staff for the MBS-run wealth fund maintaining ‘this investment aims to form a strategic relationship with the Affinity Partners Fund and its founder, Jared Kushner.’
He reportedly secured a deal with Saudi’s sovereign wealth fund, which also has shares in Uber and Newcastle United Football Club, which is headed by Saudi Arabia’s de facto leader Mohammed bin Salman (pictured: MBS, Kushner and his wife Ivanka Trump in May 2017)
As to the panel’s concerns about why invest so much with Kushner when he had little prior experience to show for it, staff reportedly said any cuts ‘may negatively or fundamentally affect the framework of the agreed strategic and commercial relationship.’
The fund’s staff also said the investment was worth the risk because of the ability to ‘capitalize on the capabilities of Affinity’s founders’ deep understanding of different government policies and geopolitical systems.’
The business deal raises ethics concerns mentioned in Sunday’s report over whether MBS is seeking to pay Kushner back for his allyship at the White House or possibly preemptively seeking influence if Trump runs and wins again in 2024.
The report notes that Kushner barely has any experience in private equity, having primarily worked for his father’s real estate firm before joining the White House.
One of his largest deals, buying a $1.8 billion office building in Manhattan in 2007, turned into a financial burden for his family’s real estate empire during the 2008 recession.
But he was still able to reportedly secure a better deal with the Saudis than Trump Treasury Secretary Steve Mnuchin, a seasoned investor and former executive at Goldman Sachs.
A Sunday report suggests Kushner’s close relationship with MBS could have helped him secure a better investment than former Trump Treasury Secretary Steve Mnuchin (right). Kushner has relatively little investing experience compared to Mnuchin, a longtime financier and a former partner at Goldman Sachs
Mnuchin, who was also courting the Saudi wealth fund’s investment for his Liberty Strategic Capital, secured a $1 billion investment, according to the Times.
Both Mnuchin and Kushner’s firms agreed to open offices in the Saudi capital of Riyadh and cut back their standard two percent asset management fees.
However, Mnuchin came away with a one percent fee, while documents reportedly show Kushner’s fee at 1.25 percent.
That would get Kushner’s firm annual profits of $25 million from the Saudi’s investment alone, not counting additional cash earned.
The wealth fund’s staff hailed Mnuchin as having ‘significant access toward understanding the future of the U.S. financial system’ and ‘deep experience at some of the highest levels of the U.S. regulatory system,’ according to the Times.
Saudis’ PIF also owns shares of Uber and United Kingdom-based soccer team Newcastle United Football Club.
As of public filings disclosed on March 31 of this year, Kushner’s Affinity Fund is managing $2.5 billion — the bulk of which is from overseas investors, mainly Saudi Arabia.
When the Saudi-based screening panel flagged the lack of U.S.-based investors in its June 30 meeting, staff reportedly said Kushner ‘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,’ they reportedly said.
Kushner was thrust into the spotlight recently when he appeared for an interview with the House of Representatives’ Select Committee to Investigate the January 6th Attack on the U.S. Capitol.
The former president’s son-in-law was described to NPR by a lawmaker on the panel as ‘helpful’ when he appeared before them via video link on March 31.
His testimony was reportedly critical to the investigation, as a close confidante of the former president and the husband of his oldest daughter Ivanka Trump.
It’s suggested that Kushner did not use any privilege claims nor did he plead the Fifth Amendment during his more than six-hour sit-down.