Hillary Clinton’s son-in-law, Marc Mezvinsky, is about to shut down the Greek-focused hedge fund that he founded two years ago.
Mezvinsky is reportedly about to close the fund after it lost almost 90% of its value. A report in the New York Times cites two investors with direct knowledge of the matter who spoke on the condition of anonymity. Investors in the fund, Eaglevale Hellenic Opportunity, were told last month that it would be closing down.
Corsair Capital was down by about 3.5% net for the third quarter, bringing its year-to-date return to 13.3% net. Corsair Select lost 9.1% net, bringing its year-to-date performance to 15.3% net. The HFRI – EHI was down 0.5% for the third quarter but is up 11.5% year to date, while the S&P 500 returned 0.6% Read More
Mezvinsky’s firm to close Greek hedge fund
The fund had raised $25 million from investors to buy shares in Greek banks as well as government debt. Eaglevale Partners, the Manhattan hedge fund firm founded by Mr. Mezvinsky and two former Goldman Sachs colleagues, raised funds for the Greek fund during a time of hope for economic recovery.
Mezvinsky even appeared at conferences promoting his theory that Greece was due to recover. He is married to Chelsea Clinton, the daughter of former President Bill Clinton and Mrs. Clinton, the former secretary of state who is hoping to be the Democratic presidential candidate.
Betting on Greece has proven to be a risky business. Some people have made serious money while others have lost large sums, depending on when they invested. Hedge funds on the whole have had a hard time in the past 17 months, even those run by the biggest names in the business.
Clinton’s son-in-law started firm with two former Goldman colleagues
Eaglevale’s flagship fund, which has approximately $330 million in assets under management, is down 1% this year. It specializes on macroeconomic bets based on global events in the economic and political spheres.
In the first quarter of this year the average hedge fund was down 0.63%, according to the HFRI Fund Weighted Composite Index. Eaglevale started raising money in 2011 and has had mixed results since.
Mezvinsky graduated from Stanford University and worked for Goldman Sachs for 8 years before moving into private equity. He later left that job to form Eaglevale with Bennett Grau and Mark Mallon, who had both previously been at Goldman.
Top Goldman partners were among the first investors in the fund. Lloyd C. Blankfein even let the firm use his name in marketing the fund.
Although the Hellenic fund had lost around 40% of its value by early last year, Eaglevale has waited until now to close it.
Some investors continue to bet on Greece
In 2015 Greece suffered a particular set of economic convulsions. In fact the economy nearly collapsed after tense negotiations between creditors and national leaders. The government finally agreed to implement a set of reforms in return for a new bailout deal.
The economy continues to suffer as Greece struggles to deal with its problems. The country is suffering as it attempts to work out a deal to reduce its debt burden, but some Wall Street firms continue to promote investment in the country.
Richard Deitz, of the hedge fund VR Capital Group, recently told an audience at a charity dinner that he was betting on shares in Greek banks and government bonds. Mezvinsky and his partners sent a letter to investors in 2014 in which they claimed that Greece would soon be heading for a “sustainable recovery.”
However they started to acknowledge that they had been wrong later that year, when they stopped taking new money for the fund. Investors in the fund may be able to find solace in the fact that they can claim a larger tax loss on investments next year.
Interestingly, Mezinsky’s father is an even more interesting character.
Wikipedia notes (citing major outlets – CNN, NYT, ABC etc)
Beginning in the early 1990s, Mezvinsky used a wide variety of 419 scams. According to a federal prosecutor, Mezvinsky conned using “just about every different kind of African-based scam we’ve ever seen.” The scams promise that the victim will receive large profits, but first a small down payment is required. To raise the funds needed to front the money for the fraudulent investment schemes he was being offered, Mezvinsky tapped his network of former political contacts and dropping the name of the Clinton family to convince unwitting marks to give him money.
In March 2001, Mezvinsky was indicted and later pleaded guilty to 31 of 69 felony charges of bank fraud, mail fraud, and wire fraud. Nearly $10 million was involved in the crimes. Shortly after his indictment, he was diagnosed with bipolar disorder, but the judge at his trial disallowed a mental illnessdefense. He served his time at Federal Prison Camp, Eglin. Mezvinsky, Federal Bureau of Prisons # 55040-066, was released in April 2008. He remained on federal probation until 2011, and as of 2010 still owed $9.4 million in restitution to his victims.
What is next for the younger Mezvinsky? That is unclear but if we had to venture one suggestion how about Paulson and co.