Wall Street investors secured emergency government loans amid pandemic
BOSTON (Reuters) – Some investment firms, including those that run hedge funds or manage money for wealthy investors, are among the companies approved for emergency loans from the U.S. government to help small businesses and nonprofits to pay their employees during the coronavirus lockdown, according to data released Monday.
They included Semper Capital Management LP, which bets over $ 2 billion on mortgages and other asset-backed securities; Domini Impact Investments LLC, a mutual fund manager with approximately $ 2 billion under management; Patent Holdings LLC, a $ 1.2 billion loan company; and Truvvo Wealth Management LP, which manages over $ 2 billion for large families and institutions.
Emails to companies seeking comment were not immediately returned. It is not clear from the data which loans have been disbursed, repaid, or if they are eligible for forgiveness.
In total, the US Small Business Administration said in a report Monday that finance and insurance companies accounted for $ 12.2 billion out of 168,462 loans, or about 2.3% of total program loans as of June 30. . More than 1,400 approved loans were for companies classified as investment advisers and nearly 600 were for portfolio management companies, the data showed.
Many investment and wealth management firms are relatively small, and staff compensation varies widely, often far removed from the stereotype of the billionaire jet-set financier. Unlike restaurants and hotels, many financial firms have remained open during coronavirus-related shutdowns and have shifted to remote work relatively easily.
Investment firms typically earn a percentage of assets under management and profits in the form of commissions. Markets rebounded strongly after hitting a low at the end of March, which would have reversed some of these losses.
The companies disclosed on Monday are in addition to some already revealed in public documents.
Cohen & Company Inc, for example, said in May that it received $ 2.2 million under the PPP, noting its small market cap and lack of access to public capital markets. The company on Monday declined a request for further comment beyond its previous statement that, in part because of the loan, it “does not anticipate any significant downsizing or reduction in pay levels in the near future.”
Some financial companies initially approved for loans were quickly canceled or fired amid additional guidance from the Treasury Department and intense media scrutiny. One of them was Metacapital Management LP, according to managing member Deepak Narula.
A spokesperson for another hedge fund listed as a beneficiary in Monday’s data, Advent Capital Management LLC, said he explored the idea of taking out a PPP loan but never completed an application and did not. had received no help.
Reporting by Lawrence Delevingne; Editing by Paritosh Bansal, Michelle Price, Dan Grebler and Lincoln Feast.