Saudi sovereign fund hands Kushner's firm $2 billion over its panel's objections

Six months after leaving the White House, Jared Kushner secured a $2 billion commitment from Saudi Arabia's Public Investment Fund (PIF) for his newly formed private equity firm, Affinity Partners. PIF's own five-member Board Investment Committee — reviewing the deal under the code name "Project Astro" — unanimously voted against it at a June 30, 2021 meeting, citing the inexperience of Kushner's team, due diligence that found the firm's operations "unsatisfactory in all aspects," a management fee that "seems excessive," and the public-relations risks of Kushner's prior role as senior adviser to his father-in-law, then-President Donald Trump.

Within days, the full PIF board — chaired by Crown Prince Mohammed bin Salman, the kingdom's de facto ruler — overrode the panel and approved the deal. The fund agreed to pay Affinity a 1.25 percent annual management fee on the $2 billion, generating roughly $25 million a year for Kushner's firm regardless of performance, and took a stake of at least 28 percent in Affinity's main investment vehicle. The deal made the Saudi government Affinity's cornerstone investor; subsequent SEC filings showed nearly all of the firm's reported assets under management came from the Saudi commitment.

Kushner played a leading role inside the Trump administration in defending Crown Prince Mohammed after U.S. intelligence concluded he approved the 2018 killing of Saudi journalist Jamal Khashoggi, and helped broker $110 billion in U.S. weapons sales to Saudi Arabia. The Saudi fund agreed to invest twice as much in Kushner's firm, and on more generous fee terms, than it did at around the same time with former Treasury Secretary Steven Mnuchin's new fund, despite Mnuchin's track record as a successful investor before government service.