Before committing $2 billion to Mr. Kushner’s fledgling firm, officials at a fund led by the Saudi crown prince questioned taking such a big risk.Six months after leaving the White House, Jared Kushner secured a $2 billion investment from a fund led by the Saudi crown prince, a close ally during the Trump administration, despite objections from the fund’s advisers about the merits of the deal.
A panel that screens investments for the main Saudi sovereign wealth fund cited concerns about the proposed deal with Mr. Kushner’s newly formed private equity firm, Affinity Partners, previously undisclosed documents show.
Those objections included: “the inexperience of the Affinity Fund management”; the possibility that the kingdom would be responsible for “the bulk of the investment and risk”; due diligence on the fledgling firm’s operations that found them “unsatisfactory in all aspects”; a proposed asset management fee that “seems excessive”; and “public relations risks” from Mr. Kushner’s prior role as a senior adviser to his father-in-law, former President Donald J. Trump, according to minutes of the panel’s meeting last June 30.
But days later the full board of the $620 billion Public Investment Fund — led by Crown Prince Mohammed bin Salman, Saudi Arabia’s de facto ruler and a beneficiary of Mr. Kushner’s support when he worked as a White House adviser — overruled the panel.
Mr. Kushner played a leading role inside the Trump administration defending Crown Prince Mohammed after U.S. intelligence agencies concluded that he had approved the 2018 killing and dismemberment of Jamal Khashoggi, a Saudi columnist for The Washington Post and resident of Virginia who had criticized the kingdom’s rulers.
The Saudi fund agreed to invest twice as much and on more generous terms with Mr. Kushner than it did at about the same time with former Treasury Secretary Steven Mnuchin — who was also starting a new fund — even though Mr. Mnuchin had a record as a successful investor before entering government, the documents show. The amount of the investment in his firm, Liberty Strategic Capital — $1 billion — has not been previously disclosed.
Why aren’t there any significant institutional investors from the US?
The Affinity principal 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.
Saudi staff wrote that Mr. Kushner was trying to avoid public attention by initially courting only international institutions like the Saudi Public Investment Fund for his new venture.