Earlier today, New York Attorney General Andrew Cuomo announced private equity big shot Elliott Broidy plead guilty for his involvement in a pay-to-play kickback scheme to manage state pension funds.
Now, the firm, Markstone Captial, is trying to assure investors everything’s fine.
Really? Your leader is now a felon after admitting to $1 million in gifts to get Markstone $250 million worth of New York pension funds to manage — and $18 million in management fees.
From a press release today:
- “Markstone expects these events to have no effect on the value of investors’ interests in the partnerships.”
- “Markstone expects a seamless transition from Mr. Broidy’s to Ambassador Dan Gillerman’s leadership and that there will be no interruption of service to investors and no impact on the value of the investments held by Markstone Capital.”
According to Markstone, its investment funds have been “performing well and, based on current indications, will produce positive overall returns:”
Through the end of the third quarter 2009, Markstone has invested $562 million in 10 companies, with an overall gross internal rate of return of 11%. The funds have already distributed $218 million to its investors, representing 39% of the amounts invested. The $218 million distributed was primarily from the sale of two investments, which produced annual returns of 49% and 34%. The funds have over $200 million in commitments for additional investments and are assessing opportunities across a range of sectors in the Israeli economy.
AG Cuomo struck a different tone today. “Broidy paid nearly a million dollars in bribes to get a quarter billion dollar investment. For Broidy, this was a small price to pay. For New York taxpayers, the harm is incalculable,” said Cuomo. “Corruption corrodes the integrity of the pension system and the public’s trust in government. That is too high a price to bear.”
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