During the financial crisis, hedge fund Heather Capital managed to attract major investors from $ 600 million. However, when the fund went bankrupt, the liquidators nothing could console the portfolio of investors: luxury commercial property, under which the fund allegedly borrowed money, were abandoned Scottish pubs. A founder of Gregory King disappeared.
In September 2008, Gregory King, a Scottish lawyer-turned-manager hedge fund in a big way celebrated its 40th anniversary in Spain, writes The Wall Street Journal . The party has been invited several hundred guests. Then King thanked his friends, family and colleagues, was glad things are going: running his Heather Capital is already more than $ 600 million.
While many banks began to curtail lending to real estate companies. And some hedge funds, including the firm King, decided to take the place of traditional fininstitutov they raised funds portfolio investors, then to directly finance the construction of commercial real estate. Heather Capital funds entrusted their well-known players on the market, including the Canadian pension fund Ontario Teachers’ Pension Plan, Fund “superwoman” from the City of London Nicola Horlick, as well as numerous representatives of the Swiss banking sector.
However, in late 2008 and early 2009, that is in the midst of the financial crisis, worried investors have to take money from hedge funds. Heather Capital was no exception. Only he quickly stopped issuing cash, and in 2010, the company declared bankruptcy. Fund wrote off $ 76 million on its loans and $ 92 million on foreign-currency transactions.
And at first glance, Heather Capital became just another victim of the financial crisis. If it were not for one “but”: usually in bankruptcy hedge fund investors can return at least part of their investments. However, the liquidators of the company Ernst & amp; Young found that the balance of the fund virtually zero, and most loans can not compensate, as they are issued under very strange abandoned projects like bars. “Most of the loans to developers, in fact, have been fraud”, – concluded the experts.
Criminal proceedings against the Fund has not been filed, and the Gregory King disappeared .
Home – Scottish accent
King was born in a family of Scottish bookmakers and creditors. His father is the chairman Hugh King bookmaker group, and cousin Stephen King – one of the most famous in the country the owners of bars and clubs.
Sam Gregory learned not to a lawyer in Scotland, then finished the business school of the University of Chicago. He returned to Glasgow and
opened a showroom, which hit the criminal chronicle in 2002, after King’s partner was brutally murdered while the remaining did not clarify the circumstances.
In 2004, the King decided to create his own hedge fund. In search of customers, he traveled all over North America and Europe. At the meetings, the financier appeared in expensive suits, his presentations were always well prepared, and he with a soft Scottish accent convincingly told potential investors about future profitable projects. He was “friendly and charming,” and it seemed that he was “firmly on the ground,” King described one of the investors.
According to another investor who lost money in the Heather Capital, King well knew how to make others believe in the fact that his foundation is absolutely reliable. “He knew how to say the right things. It looked as if he had found his little niche, “- says his former client.
Indeed, the King at the meetings often turned to the business experience of his family. “There was no such projects, which funded my family and now you would not want to invest. We select only those projects with little risk, “- he said. According to King, the history of the fund was only one default on the project.
A Statistics Heather Capital and all seemed like a dream. According to documents, from January 2005 to August 2008, the monthly rate of return of hedge funds is about 1%, which gave about 13% per year.
Catch villain
However, investors should pay attention that things Heather Capital are not so smooth. So, while checking her statements in 2006-2007 auditing firm KPMG found that about $ 150 million spent on loans to companies based in Gibraltar, some of which were directly related to the King. In conclusion, KPMG said that their inspectors did not know for what purpose were these money.
In addition, some investors began to worry that a hedge fund does not disclose data about borrowers, referring to laws Privacy. In internal communications is one of the depositors referred to justify the refusal to provide relevant information “banal and unconvincing».
As it turned out the liquidators, the majority of loans held by an offshore company controlled by King Mathon.
She gave out loans for projects that actually were destroyed churches, empty pubs in the outskirts of Glasgow and just wastelands .
«There are clear signs of fraud, but the true nature of deception and personalities of all those who were involved in this scheme, remains to be seen,” – said in a statement the court .
«I was most upset that this guy got away with it – says Paul Larayya that on the advice of others, to invest in Heather Capital, on which, according to him, had lost” a couple hundred thousand dollars ” . – I hope they catch the villain ».
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