Mitt Romney Secret Hedge Fund Documents Revealed

//Mitt Romney Secret Hedge Fund Documents Revealed

Mitt Romney Secret Hedge Fund Documents Revealed

Mitt Romney secretive hedge fund documents revealed via Gawker

Documents of 20 secretive hedge funds and other investment vehicles in which Mitt Romney has stashed his considerable wealth. All told, the partnerships and limited liability corporations detailed below accounted for, at minimum, $10,069,000 of Romney’s assets in 2011 and yielded $913,300 in income, according to his 2012 financial disclosure (those figures are derived from adding up the low end of ranges Romney disclosed; the actual numbers could be astronomically higher).
Most of the entities are affiliated in one way or another with Bain Capital, the private equity firm Romney ran from 1984 through 1999. According to his financial disclosures, the investments “were made pursuant to an agreement with Bain Capital regarding Romney’s retirement…. The agreement has expired but [Romney] retain[s] certain investments…made prior to the expiration of the agreement.” In other words, they are his retirement package from more than a decade ago, and continue to make him nearly a million (at minimum) dollars per year.
A typical private equity or hedge fund pays its managers in part with a management fee based on the size of the fund, and in part with a share of the profits earned by the fund. Those profits are considered “carried interest” and taxed at capital gains rates, which in recent years have been 15 percent, assuming that the underlying investment profits qualified for that treatment.
The tax strategy Bain appears to have used is intended to convert the remaining management fee — the part not based on investment profits — into capital gains. Mr. Romney appears to benefit from the carried interest structure in these funds, but it is not clear from the documents made public whether he also benefits from the fee waiver. The Romney campaign declined to comment.

Ann and Mitt Romney

The following hedge funds are listed in the 2010 tax returns for both the Ann D. Romney Blind Trust and the Ann and Mitt Romney 1995 Family Trust as holdings of Goldman Sachs Hedge Fund Partners LLC, a “fund of funds” in which the Romneys have invested at least $2 million.

Karsch Capital II LP
A $234 million Delaware  hedge fund.  2011, 2010, and 2005 audited financial statements, and a 2007 confidential offering memorandum describing its holdings and operations, as well as a 2006 audited financial statement and 2007 confidential explanatory memorandum for Karsch Capital Ltd., an affiliated Cayman Islands hedge fund.

Taconic Capital Partners 1.5 LP
A $790 million Delaware-based hedge fund.

Viking Global Equities LP
A $6.8 billion Delaware-based hedge fund.

All the entities below are affiliated in some way with Bain Capital, and are described in Romney’s disclosures as leftovers from his 1999 retirement package.

Absolute Capital Return Partners LP
A U.S. private equity fund with $929 million in capital as of 2009. Romney held at least $1.25 million in it as of 2011, according to disclosures. Click here to read its 2009 audited financial statements.

Bain Capital Asia Fund LP
A $487 million Cayman Islands fund investing primarily in China and Japan. Romney held at least $100,000 in it as of 2011. Click here to read its 2009 audited financial statement.

Bain Capital Europe Fund III LP
A $287 million fund (denominated in Euros) investing primarily in Europe. Romney held at least $50,000 in it as of 2011. Click here to read its 2009 audited financial statements and September 30, 2010 unaudited financial statements.

Bain Capital Fund VI LP
A $73.4 million Cayman Islands fund investing in Domino’s Pizza, Australian electronics manufacturer Startronics, venture capital firm Village Ventures, and others. Romney owned at least $50,000 of the fund in 2011, and reported owning 4.059% of its general partner in 2002. Click here for its 2009 audited financial statements and unaudited September 20, 2010 financial statements, as well as statements for an affiliated coinvestment fund.

Bain Capital Fund VII LP
A $516 million Cayman Islands fund investing in Burger King, AMC Entertainment, Bombardier Recreational Products, and other companies. Romney owned more than $1 million in it, as well as an affiliated coinvestment fund, as of 2011, and reported owning 4.059% of the fund’s general partner in 2002. Click here for its 2009 audited financial statements, as well as statements for an affiliated co-investment fund.

Bain Capital Fund VIII LP
A $3.7 billion Cayman Islands Fund investing in the parent company of Dunkin’ Donuts, Burlington Coat Factory, Canadian dollar-store chain Dollarama, and other companies. (Bloomberg News has previously reported on some of Bain Capital Fund VIII LP’s internal financials.) As of 2011, Romney held more than $1 million in the fund. Click here for its 2009 audited financial statements and September 30, 2010, unaudited financial statements, as well as statements for an affiliated coinvestment fund.

Bain Capital Fund VIII-E LP
A $971 million (denominated in Euros) Cayman Islands fund investing in companies in Italy, France, Germany, the Netherlands, Belgium, South Africa, and the United Kingdom. In 2011, Romney held at least $250,000. Click here to read its 2009 audited financial statements.

Bain Capital Fund IX LP
A $4.5 billion Cayman Islands fund investing in Guitar Center, Chinese advertising firm SinoMedia, European restaurant supplier Brake Brothers, and other companies. In 2011, Romney held more than $500,000. Click here to read its 2009 audited financials, as well as statements for an affiliated coinvestment fund.

Bain Capital Fund X LP
A $2 billion Cayman Islands fund investing in the Weather Channel, corporate daycare chain Bright Horizons, and Chinese electronics retailer GOME. In 2011, Romney held at least $500,000. Click here for its 2009 audited financials, as well as those of an affiliated coinvestment fund.

Prospect Harbor Credit Partners LP
A $2.8 billion Delaware-based fund investing in a wide variety of American, Dutch, English, and German firms. In 2011, Romney held at least $1.25 million. Click here for its 2009 audited financials, as well as a November 2010 investor letter.

Sankaty Credit Opportunities LP
A $266 million Delaware-based fund investing primarily in debt issued by American companies. In 2011, Romney held more than $50,000. Click here for its audited 2009 and 2008 financials.

Sankaty Credit Opportunities I LP
A $174 million fund investing in corporate debt. In 2011, Romney held at least $1,000. Click here for its March 16 and December 2010 investor letters.

Sankaty Credit Opportunities II LP
A $960 million fund investing in corporate debt. In 2011, Romney held at least $250,000. Click here for its March 16 and December 2, 2010, investor letters.

Sankaty Credit Opportunities III LP
A $1.6 billion fund investing in corporate debt. In 2011, Romney held at least $1 million. Click here for its March 16 and December 2, 2010, investor letters.

Sankaty Credit Opportunities IV LP
A $1.4 billion Delaware fund investing primarily in debt issued by American companies. In 2011, Romney held at least $1 million. Click here for its 2009 audited financial statements and December 2, 2010 investor letter.

Sankaty Credit Opportunities (Offshore) IV LP
A $1.3 billion based in the Cayman Islands investing primarily in North American and European corporate debt. The Ann D. Romney Blind Trust reported income from the fund’s general partner on its 2010 federal income tax return. Click here for its unaudited June 30, 2010 financial statements, as well as those of an affiliated “master fund.”

Sankaty High Yield Partners II LP
A Delaware-based fund in liquidation, with -$565,415 in net assets, as of 2009. In 2010, Romney held between $1,000 and $15,000. Click here to see its 2008 and 2009 audited financials.

Sankaty High Yield Partners III LP
A Delaware-based fund in liquidation, with $713,141 in net assets as of 2009. In 2010, Romney held more than $15,000. Click here for its 2009 and 2008 audited financials.

Sankaty Advisors LLC Presentation
A 2010 Powerpoint presentation from Sankaty Advisors LLC, the credit affiliate of Bain Capital via Gawker

Read More: Gawker

2012-08-25T00:29:21+00:00

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