Reply #95: R. Allen Sanford's private equity connections [View All]

[antigop]

http://blogs.wsj.com/deals/2009/02/18/r-allen-stanfords-private-equity-connections/?mod=rss_WSJBlog

he Securities and Exchange Commission’s complaint against Stanford International Bank and related entities includes many mentions of the firm’s involvement in the private-equity industry.

The complaint, filed Tuesday in federal court in Dallas, alleges financier R. Allen Stanford orchestrated a multibillion dollar fraud centering on an $8 billion certificate of deposit program. According to the complaint, the majority of Stanford’s money was invested not in liquid securities, as it had told investors, but instead in illiquid asset classes such as private equity or real estate.

Stanford International Bank’s 2007 annual report said its portfolio was invested 58.6% in equity, 18.6% in fixed income, 7.2% in precious metals and 15.6% in alternative investments, according to the complaint. However, the SEC alleges the bank’s portfolio instead consists of primarily illiquid investments, with “at least 23% private equity.” The SEC couldn’t be reached for additional comment. Stanford couldn’t be reached for comment, either.

People in the private-equity sector said Stanford isn’t a big private-equity investor. Two placement agents said they have never contacted the institution about any of their clients. “I have never heard of them, and I guess that’s a good thing,” one placement agent said.

A small venture firm in Louisiana, VCE Capital Partners, lists Stanford as a limited partner on its Web site. So does Catalyst Funds, an Israeli venture-capital firm, and AquaAgro Fund LP, a venture fund that invests in Israeli water, agriculture and clean-technology businesses.