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Kushner’s Fund Has Reaped Millions in Fees, but So Far Returned No Profits
The son-in-law of former President Donald J. Trump has said he has intentionally moved slowly to invest investors’ money, which came primarily from foreign entities.
Reporting from Washington
The private equity firm run by Jared Kushner, the son-in-law of former President Donald J. Trump, has been paid at least $112 million in fees since 2021 by Saudi Arabia and other foreign investors, even though as of July it had not yet returned any profits to the governments largely bankrolling the firm.
Those are among the findings of a Senate Finance Committee inquiry into the operations of Affinity Partners, the Miami-based firm Mr. Kushner set up.
The committee opened an investigation this spring in response to reporting in The New York Times examining the firm’s first three years of work.
Senator Ron Wyden, Democrat of Oregon, the committee’s chairman, said the new information had only deepened his concerns that Mr. Kushner’s firm creates conflicts of interest, particularly with his father-in-law running for re-election.
Mr. Wyden asked why Affinity Partners had not “distributed a penny of earnings back to clients,” and suggested that perhaps it was set up primarily as a way for foreign entities to pay the Kushners rather than a typical fund in which partners reap the returns of deployed capital.
“Affinity’s investors may not be motivated by commercial considerations but rather the opportunity to funnel foreign government money to members of President Trump’s family, namely Jared Kushner and Ivanka Trump,” Mr. Wyden wrote in a letter to Affinity this week, asking two dozen questions.
Mr. Kushner, in interviews with The Times, acknowledged that his firm had moved slowly at first to invest the $3 billion it had collected from its investors since it formed in 2021. He said that was, in part, because a flood of venture capital moving into markets made it difficult initially to find attractive deals. That meant a delay in generating profits to return money to his investors.
In a statement, Affinity called the response from Mr. Wyden a political move. The firm said it had followed all federal laws and ethics rules and added that a delay by a private equity firm in returning profits to investors was not unusual.
“Partisan politics aside, Affinity Partners is an S.E.C.-registered investment firm that has always acted appropriately and any suggestion to the contrary is false,” Chad Mizelle, Affinity Partners’s chief legal officer, said in a statement. “We are fortunate to have the support of some of the world’s most sophisticated investors and work hard on their behalf every day.”
As The Times has previously reported, at least 99 percent of the roughly $3 billion invested came from overseas sources, including $2 billion from the Saudi government’s Public Investment Fund.
Most of the rest of the money comes from the sovereign wealth funds of Qatar and the United Arab Emirates, as well as a chunk from Terry Gou, the Taiwanese billionaire and founder of Foxconn, the world’s largest electronics contract manufacturer.
But there is a fifth “mystery foreign investor Affinity has declined to identify,” according to the letter the committee sent this week to Mr. Mizelle.
Data assembled by PitchBook, a private equity industry research firm, found that profit distributions are most common during a fund’s sixth and seventh years and Affinity has not reached this point. But PitchBook also found that most private equity firms started to pay at least some profits within 2.5 years.
Private equity firms like Affinity raise money from investors, then reinvest that capital into small, often not-yet-public companies they believe have a good chance to grow quickly or be run more efficiently. The hope is that those bets will generate enough return to eventually pay back the original investors with profits that far exceed the management fees.
As of the end of 2023 — halfway through the five-year investment commitment that Saudi Arabia and the other foreign governments made to Mr. Kushner — the firm had invested about $535 million of the $3 billion, with that total rising to about $1.1 billion as of July, according to the committee, citing information provided by Affinity.
Saudi Arabia pays Affinity an annual fee of 1.25 percent of its investment, while the three other known investors pay between 1.25 and 2 percent in fees, though Affinity Partners would not disclose exactly how much.
This led the committee staff to estimate that through the end of 2024, a total of $157 million in fees will have been paid to Affinity Partners, with $87 million of that from Saudi Arabia. If the total amount is calculated just for three years based on 1.25 percent fee minimum for all investors, that would mean at least $112.5 million in total fees through July and at least $75 million from Saudi Arabia.
A fixed 2 percent management fee, imposed annually from the start of a private equity firm as it is evaluating the market and making its investment, is relatively common in the industry.
Affinity, which as of earlier this year had 33 employees, also expects to get a small cut of profits made on its investments if they are successful. Mr. Kushner, who is the sole owner, has not disclosed how much he is being paid directly.
To date, Affinity has invested in a variety of companies, including Shlomo Group, an Israeli car-leasing and financing company; Dubizzle Group, a Dubai-based online real estate site; EGYM, a Munich-based electronic fitness company; Mosaic, a California-based solar lending site; and Zamp, an Abu Dhabi-backed fast food company that operates more than 1,000 restaurants in Brazil. The pace of new investments has accelerated considerably this year, including the Israeli financial services firm Phoenix Holdings Ltd. and QXO, a building products company based in Connecticut.
The five-year deal with Affinity’s backers gives the firm until August 2026 to find companies it wants to invest in, which would be nearly halfway through Mr. Trump’s second term if he wins in November.
That would create an obvious conflict of interest, Mr. Wyden wrote in his letter, as Saudi Arabia and the other foreign partners could attempt to pressure the Trump family as they weigh whether to pull their money out or renegotiate the terms of the deal.
“A potential future Trump administration will have financial motives to make foreign policy decisions that may be counter to the national interest in order to ensure Kushner and Ivanka Trump continue to collect millions of dollars in fees from foreign governments through Affinity,” Mr. Wyden wrote.
A spokesman for Affinity disputed this, suggesting that the firms’ investors cannot as of 2026 demand new terms or withdraw committed money. The only requirement, he said, was that the initial investments were made by then.
The original investment by Saudi Arabia was made only after officials at the Saudi investment fund questioned Mr. Kushner’s experience as a venture capitalist. Before joining the Trump administration, he had been a real-estate developer and had not previously been involved in large international financial deals.
But the board of the Public Investment Fund, led by Crown Prince Mohammed bin Salman, whom Mr. Kushner had developed a friendship with while serving at the White House, overruled these objections and approved the deal, The Times reported in 2022.
During the inquiry, Affinity Partners also confirmed that its planned projects in Serbia and Albania include unusual provisions that effectively make both of those foreign governments business partners for Mr. Kushner and Ms. Trump. Ms. Trump has said she is helping with the effort in Albania.
The committee’s letter says the governments of Albania and Serbia will share in the profits from the luxury hotel deals proposed in the countries, and the governments will be responsible for securing land-use approvals needed before construction can start.
Mr. Wyden said the reliance on foreign financing and government actions leads him to question if Mr. Kushner’s business operations should be subject to the Foreign Agents Registration Act. The federal law requires American companies doing political work in the United States on behalf of any foreign governments to file reports with the Justice Department detailing exactly how much they are being paid and any contact they have with American officials on behalf of their foreign clients.
Affinity Partners said in its statement that it had never been asked to represent its investors before the U.S. government, so it had no reason to file a disclosure as a foreign agent.
Eric Lipton is an investigative reporter, who digs into a broad range of topics from Pentagon spending to toxic chemicals. More about Eric Lipton
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