Seeking Backers for New Fund, Jared Kushner Turns to Middle East
Former President Donald J. Trump’s son-in-law is trying to raise capital for his investment firm and is turning to a region that he dealt with extensively while in the White House.,
Seeking Backers for New Fund, Jared Kushner Turns to Middle East
Former President Donald J. Trump’s son-in-law is trying to raise capital for his investment firm and is turning to a region that he dealt with extensively while in the White House.
As a White House adviser in the Trump administration, Jared Kushner took a special interest in the petroleum-rich monarchies of the Persian Gulf.
He formed a personal friendship with the brash young crown prince of Saudi Arabia. He helped forge ties between Israel and the United Arab Emirates, and backed Emirati rulers in a feud with Qatar. Since the electoral defeat of his father-in-law, former President Donald J. Trump, Mr. Kushner has stayed active in the region through a nonprofit organization he established.
Now, in a move that has raised eyebrows among diplomats, investors and ethics watchdogs, Mr. Kushner is trying to raise money from the Persian Gulf states for a new investment firm he has founded. So far, he is having only mixed success.
Qatar, whose leaders saw Mr. Kushner as an opponent in the administration, declined to invest in his firm, a person familiar with those conversations said. So did the main Emirati sovereign wealth funds; Emirati rulers saw Mr. Kushner as an ally but questioned his track record in business, according to a person with knowledge of the discussions.
But the Saudis are more interested, according to four people briefed on their continuing negotiations. The kingdom’s $450 billion Public Investment Fund is negotiating with Mr. Kushner over what could prove to be a sizable investment in his new firm, two of those people said.
In a brief phone call, Mr. Kushner declined to discuss his new firm, Affinity Partners, and it is not clear which other investors he has spoken to so far inside or outside the United States. According to a person familiar with the firm’s plans, Mr. Kushner hopes to raise an amount in the low billions of dollars by early next year.
But his inquiries to Middle Eastern sovereign wealth funds have raised questions about the ethics — or at least the optics — of seeking to raise large sums from officials he had dealt with on behalf of the U.S. government as recently as January, especially given the possibility of Mr. Trump running for president in 2024.
Mr. Kushner’s business experience is largely limited to the time he spent running his family’s real estate company. His best-known deal was the purchase of 666 Fifth Avenue in Manhattan, for $1.8 billion in 2007, which became a financial albatross when the recession hit soon after. He was also the owner and publisher of The New York Observer for a decade, until his father-in-law became president.
During the Trump administration, Mr. Kushner developed a particularly close rapport with Saudi Arabia’s de facto ruler, Crown Prince Mohammed bin Salman. He played a leading role in the White House in defending Prince Mohammed after U.S. intelligence agencies concluded that he had directed the killing of Jamal Khashoggi, a Saudi columnist for The Washington Post, who had criticized of the kingdom’s rulers.
Mr. Kushner would not be the first former Trump White House official to enter a lucrative business deal with the administration’s allies in the Persian Gulf soon after leaving office. Steven T. Mnuchin, Mr. Trump’s Treasury secretary, has already received investments from the Saudis, the Emiratis and the Qataris, according to people familiar with the matter.
Other former advisers and employees have also actively sought money from the Saudis. An official of the Saudi Embassy in Washington declined to comment.
“When former White House officials start cashing in their time served with our government by cozying up to monarchs, it turns the stomach a bit. Is it illegal? No,” said Nick Penniman, the founder and chief executive of Issue One, a good-government organization in Washington. “Is it swampy and seemingly hypocritical? Yes.”
Steven T. Mnuchin, who was the Treasury secretary under President Donald J. Trump, has raised $2.5 billion for his new private equity fund, attracting investments from sovereign wealth funds in the Middle East.Credit…Iman Al-Dabbagh for The New York Times
During a recent visit to the Middle East, Mr. Kushner made a stop in the United Arab Emirates, two people with knowledge of the trip said. While working in the White House, he had developed a close relationship with the Emirati ambassador to Washington and worked closely with Emirati leaders on the first in a series of deals, known as the Abraham Accords, that opened diplomatic relations between Arab states and Israel.
But his cooperation with officials there while in the White House ran into Emirati concerns about Mr. Kushner’s business record, according to the person with knowledge of the discussions.
Mr. Mnuchin, who led a trading desk at Goldman Sachs, financed Hollywood movies and turned a failing regional bank profitable before joining the Trump administration, has had better luck. Emirati officials invested this year in his new, $2.5 billion investment fund, Liberty Strategic Capital, two people familiar with the matter said, as did the Public Investment Fund. A spokesman for the firm said in a statement that Liberty “has a diverse investor base, including U.S. insurance companies, family offices, sovereign wealth funds and other institutional investors,” without mentioning specifics.
Qatari officials initially feared that they might face retaliation if they rejected Mr. Kushner’s invitation to invest and Mr. Trump or his allies returned to power, one person familiar with the Qatari deliberations said.
Qatar had turned down requests for investment by Mr. Kushner’s family in its New York real estate business, and Qatari officials have said they suspected that he held the rejection against them when Mr. Trump was in office. (The officials’ views were reflected in coverage on the Qatari-controlled news network Al Jazeera.)
In 2017, Mr. Trump initially appeared to back an effort by the Saudis and Emiratis to cut off Qatar’s diplomatic and trade ties with the rest of the region as part of a power struggle.
But Qatar appears more secure now. It has long hosted and subsidized a major American air base, and it has recently bolstered its prominence as an ally by playing a key role in the U.S. evacuation from Afghanistan this year.
In 2018, a real estate fund in which Qatar has invested also provided a much-needed cash infusion to the Kushners for 666 Fifth Avenue, which had been struggling to cover its debts amid a stubborn vacancy rate.
Mr. Kushner’s current negotiations with Saudi Arabia, reported earlier by the website Project Brazen, are continuing, the four people familiar with the matter said; but no deal has been announced. His relationship with senior Saudi officials goes back to the beginning of the Trump administration in 2017.
In the first three months after Mr. Trump took office, Mr. Kushner bent protocol to orchestrate a private meal with the president at the White House for Prince Mohammed — in a format usually reserved for heads of state — even though the prince had not yet been designated as the successor to the throne occupied by his father, King Salman.
That spring, only a few months later, Mr. Kushner successfully pushed for his father-in-law to make his first international trip to a summit in Riyadh, the Saudi capital, where the president was photographed participating in a traditional sword dance. Around the same time, Mr. Kushner personally helped negotiate a 10-year agreement for Saudi Arabia to buy more than $110 billion in American weapons. Prince Mohammed was named crown prince that June.
Mr. Kushner and Prince Mohammed regularly and informally communicated by text message, and they addressed each other by first name. After the Khashoggi killing, Mr. Kushner defended Prince Mohammed within the White House, despite intelligence reports showing his involvement in the plan to execute the journalist.
In a move widely interpreted as an attempt to protect the prince, Mr. Trump kept those reports classified throughout his term. They were unsealed this year by President Biden, who has called Saudi Arabia a “pariah” and has adopted a much cooler approach to the kingdom than his predecessor.
While in the White House, Mr. Kushner devoted much of his energy to trying to enlist Arab states in a grand bargain to provide economic benefits to the Palestinians in exchange for Palestinian concessions to Israel. Although that attempt was no more successful than previous efforts at Middle East peace, his talks with the Emiratis and a few neighbors ultimately yielded the more limited Abraham Accords on normalizing relations with Israel.
Mr. Kushner has adopted a low profile since leaving the White House. Along with his wife, Ivanka Trump, and their children, he relocated to Miami, beyond the media glare of New York and Washington. He established Affinity there in recent months.
He has told associates that he has no desire to re-enter politics. Seeking to build on pacts he helped negotiate in government, Mr. Kushner started the Abraham Accords Institute for Peace, a nonprofit group that will seek to expand trade ties between Israel and its Arab neighbors.
Mr. Kushner also hopes that his new firm, Affinity, will find opportunities in cross-border investing in the Middle East, the person with knowledge of the firm’s plans said. One key area of interest, this person said, is to build investment relationships between Israel and Saudi Arabia.
The firm is still being staffed up, the person said, adding that approaching investors in the United States and abroad is on the agenda.
Affinity recently hired Bret Pearlman, a founder of the Silicon Valley investment firm Elevation Partners and a longtime money manager for Josh Harris, a founder of the private equity firm Apollo Global Management, according to two people with knowledge of the move. Asad Naqvi, a former partner at the London-based private equity firm Apis Partners, has also joined the investment team, one of those people added. (Both hires were reported earlier by Reuters.) Mr. Kushner will be the chief executive officer.
Neither Mr. Pearlman nor Mr. Naqvi responded to requests for comment.