Pharo Management Says No to Saudi Money in Response to Khashoggi Murder

March 28, 2019 James Heinsman In the News

In what is a highly unusual move, UK-based Pharo Management LLP returned close to $300 million it had been investing for Saudi’s central bank, known as the Saudi Arabian Monetary Authority, or SAMA.

The firm’s founder, Guillaume Fronkenell told investors in January that it had decided to uphold its principles and return the money to the Middle Eastern kingdom as a response to Jamal Khashoggi’s death perpetrated by Saudi government officials at the Saudi embassy in Turkey last October.

There has been much speculation about the extent of the involvement Crown Prince Mohammed bin Salman with the killing, and different governments and investment firms have reacted to the event in a broad manner. The US President, Donald Trump, has continued to support Saudi Arabia and its leader, sometimes known as MBS. Important financiers, such as Larry Fink of Black Rock Inc; Jamie Dimon of JP Morgan Chase; and Winton Group founder David Harding, on the other hand, pulled out of MBS’s key investment conference last October, but other, less senior financiers attended anyway, diminishing the power of the walkout.

Pharo could be the first hedge fund which refused to manage money from the wealthy kingdom. The action is made even more impressive at a time when the hedge fund industry is facing a stiff battle for money from investors who are less than satisfied with the high fees hedge funds charge combined with the poor returns they deliver. In 2018 clients withdrew $37.2 billion from hedge funds.

Guillaume Fronkenell, Jamal Khashoggi, Pharo Management, Saudi Arabia,

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