Mubadala Suspends Future Goldman Ventures Due to 1MDB Scandal

Abu Dhabi fund awaits the outcome of lawsuit tied to Malaysian corruption case.

Abu Dhabi’s leviathan sovereign wealth fund has delayed its future activities with Goldman Sachs, owing to the 1MDB corruption mess.

The $225 billion-plus Mubadala Investment Co.’s decision comes as the investment banker has been tied to a multibillion-dollar money laundering scandal centered on Malaysian sovereign wealth fund 1Malaysia Development Berhad.

The Abu Dhabi organization’s International Petroleum Investment Co., and Aabar subsidiaries have been suing Goldman over the issue since November. The case alleges Goldman tried to corrupt petroleum business executives to further its business with the Malaysian fund.

“We have suspended any activities with Goldman Sachs pending [the] outcome of the litigation,” said Brian Lott, a spokesman of Mubadala Investment Co. He said future Goldman operations were “pending” on the litigation’s outcome. Deals signed before Mubadala sued will continue.

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Suspensions came after the Malaysia Securities Commission issued a “show-cause” letter to the bank’s Malaysian unit, asking Goldman to explain why it shouldn’t face disciplinary action, adding that it can put sanctions, civil enforcement proceedings, and criminal prosecutions on the bank.

In 2015, Mubadala’s petroleum company promised billions of dollars in bonds arranged by Goldman, to be issued by 1MDB. This did not happen. Instead, money went missing and two ex-bankers, Tim Leissner and Roger Ng, were indicted by the US Department of Justice. The Malaysian fund defaulted and the nation filed criminal charges against Leissner and Ng, contending that the two helped misappropriate $2.7 billion in bonds in 2012 and 2013.

Following the default, Malaysia’s government in Kuala Lumpur agreed to repay the International Petroleum Investment Co. in a settlement at the time. That is currently being challenged by the country’s new government.

Leissner plead guilty to two counts of conspiracy to commit money laundering and bribe officials. Ng’s lawyer said his client will plead innocent.

But what of the scheme’s alleged mastermind?

Jho Low is wanted by the Malaysian government and believed to be hiding in China. The supposed ringleader allegedly funded a lavish lifestyle with the money and invested in New York’s Park Lane Hotel (formerly owned by real estate mogul Steve Witkoff), where Mubadala owns a stake, according to The Real Deal.

Analysts say scandal-related losses could total  $5 billion. The Malaysian fund has been linked to corruption and money laundering activities in at least six countries.

Mubadala could not be reached for direct comment while Goldman Sachs declined comment.

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Tiger Private Equity Head to Exit in June

Low-key investor Lee Fixel reaped big winnings from Flipkart, Spotify bets.

Lee Fixel















Lee Fixel, a partner and head of Tiger Global Management’s $13 billion private equity business, is leaving at the end of June.

In a letter sent to clients and employees, the firm said he will “actively invest his own capital” and may go on to start his own investment company in the future. “While we will miss seeing him in the office on a day-to-day basis, we look forward to collaborating closely with him in the years to come,” it read.

Fixel, who rose from analyst to partner, is known for being an under-the-radar professional who garnered respect for his early venture capital bets on tech companies, such as Indian e-commerce business Flipkart and Swedish digital music platform Spotify. Flipkart sold a majority stake last year to Walmart for $16 billion, which gave Tiger a lion’s share of about $3 billion. Spotify went public in 2018, and commands a $25.8 billion market cap—roughly $2 billion of which belongs to the firm.

Fixel currently sits on Flipkart’s board as well as those of at-home fitness business Peloton and glasses maker Warby Parker, which are also in Tiger’s portfolio.

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The quiet capitalist co-managed Tiger’s private strategies with firm founder and partner Charles P. “Chase” Coleman III and division founder and partner Scott Shleifer, will still manage some existing companies in the portfolio and also keep serving on several boards. Tiger Global credited Fixel, who spent 13 years at the firm, as “a driving force” in its domestic and Indian private equity moves.

Shleifer will become the division’s new leader and still co-manage its portfolio with Coleman when Fixel exits on June 30.

Tiger Global has $26 billion in assets under management including hedge funds, the private equity fund, and long-only equity funds. The firm, founded in 2001, is an offshoot, or “cub,” of Julian Robertson’s Tiger Management hedge fund.

 

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