Before it committed $2 billion to Mr. Kushner’s firm, Public Investment Fund officials questioned the justification for 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. Ethics experts say that such a deal creates the appearance of potential payback for Mr. Kushner’s actions in the White House — or of a bid for future favor if his Mr. Trump seeks and wins another presidential term in 2024. 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. A spokesman for Mr. Kushner’s firm said of its relationship with the Saudi Public Investment Fund, “Affinity, like many other top investment firms, is proud to have PIF and other leading organizations that have careful screening criteria, as investors.” A spokesman for the Saudi fund declined to comment on its investment process. If any additional discussions about the deal took place, they were not reflected in the documents and correspondence obtained by The Times. The New York Times reported last fall that Mr. Kushner had been seeking a Saudi investment. Now, the internal fund records and correspondence obtained by The Times show the outcome, scale and timing of his firm’s deal as well as the debate it aroused. Those documents and other filings indicate that at this point Mr. Kushner’s venture depends primarily on the Saudi money. Mr. Kushner planned to raise up to $7 billion in all, according to a document prepared last summer for the Saudi fund’s board. But so far he appears to have signed up few other major investors. In its most recent public filings with the Securities and Exchange Commission, dated March 31, Mr. Kushner’s firm reported that its main fund had $2.5 billion under management, almost entirely from investors based overseas. Most of that appears to be the $2 billion from Saudi Arabia. The Saudi documents obtained by The Times say that in return for its investment, the Saudi fund would receive a stake of at least 28 percent in Mr. Kushner’s main investment vehicle. No law or rules constrain the investment activities of former administration officials after leaving the White House; many from both parties have profited from connections and experiences gained in government.
