Times are tough for alternative investment firms, relatively-speaking. (In other ways, they’re not tough at all, relatively-speaking, but just go with it.) Launches are way down. Liquidations are way up, claiming such distinguished names as Lansdowne Partners’ Developed Markets Fund, Sloane Robinson and Rothschild & Co. As such, like other hard-hit business, such as retailers, restaurants, real estate and travel, some might argue that they could really use a bailout. Unfortunately, thanks to that argument, they weren’t eligible for the sweet PPP action. On the bright side, sheer ineligibility does not appear to have been a barrier.
BlackGold Capital Management LP, a Houston credit fund that received a $150,000 to $350,000 loan, according to the SBA. BlackGold is partly owned by private-equity giant KKR & Co…. Marcato Capital Management LP, an activist fund whose founder was a protégé of Bill Ackman’s, received a loan between $150,000 and $350,000, according to the data…. Other investment firms that tapped the loan program included a Dallas-based mutual-fund manager, Highland Capital Management Fund Advisors, and Exchange Traded Managers Group LLC, a New Jersey-based issuer of exchange-traded funds. The latter manages a cannabis-themed ETF with $569 million in assets, according to FactSet.
Nor did p.e. firms limit themselves to seeking loans only for the hedge funds they own.
At least 10 private-investment firms accessed the program, securing loan amounts between $150,000 and $1 million, according to an analysis of data released by the SBA on Monday… They include Los Angeles-based investment-and-advisory boutique Story3 Capital Partners LLC; Florida-based BlueKey Equity Partners; and 3P Equity Partners, a San Jose, Calif., private-equity firm that manages $158.5 million. It couldn’t be determined when these loans were made, or if the loans were returned. The SBA said the data released only includes “active” loans and loans that were canceled for any reason weren’t included….
Mr. Comisar confirmed in an emailed statement that Story3 received PPP funds, but he said the firm’s revenue to date has been from advising on mergers and acquisitions rather than from private equity.
“All of our business, revenues to date and employees relate to our broker/dealer M&A advisory business, which has unfortunately been decimated post-Covid,” he said.
[Jacob] Gottlieb, whose Visium Asset Management settled a regulatory probe two years ago, received a $150,000 to $350,000 loan for his new shop, Altium Capital Management, under the Paycheck Protection Program, according to the data posted online. He set up New York-based Altium two years ago, according to his LinkedIn profile. It’s unclear whether the firm has outside clients….
Reached by Bloomberg, Gottlieb said he would have someone respond to questions about the loan and hung up. There was no response to subsequent messages.
Of course, given the hamfisted way in which the program has been run and the seat-of-the-pants nature of the rule change barring those “primarily engaged in investment or speculation” from the federal trough, it’s impossible to know whether any of the above are actually in violation of the rule, or whether that rule is even enforceable. That being said, they could all have spared themselves this embarrassment had they just gone cap in hand to Louis Bacon, who needs no bailout at all.
Investment Firms and Real-Estate Developers Took Stimulus Loans Too [WSJ]
Private-Equity Firms Borrow From PPP, Despite Later Rule Barring Them [WSJ]
Fallen Hedge Fund’s Head Among Investors Getting PPP Relief [Bloomberg Quint]
Hedge fund launches seize up in tough markets [FT]
Hedge Fund Liquidations Surged as Pandemic Rocked Markets [II]
Lansdowne to Shut Main Hedge Fund in Retreat From Shorting [Bloomberg]
Hedge Fund Sloane Robinson to Shut After More Than 25 Years [Bloomberg]
Rothschild & Co to transfer its hedge fund business to Candriam [Reuters]
Louis Bacon’s Moore Capital to seed equities hedge fund with $1bn [FT]