The US investment fund, directed by Cathie Wood, has just rushed to rescue the Indian tycoon accused of fraud

An American fund manager specializing in emerging markets has just rode to the rescue of a troubled Indian tycoon accused of fraud.

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Florida-based GQG Partners amassed a total of $1.9 billion worth of shares in by Gautam Adani group of energy and infrastructure companies of the same name, alleged by Hindenburg Research in January committed to what may be the “biggest corporate scam in history”.

Trading on the secondary market doesn’t raise funds directly, but it can help bolster confidence in the 60-year-old business mogul. second richest person in the world.

Adani Group CFO Robbie Singh hailed the deal as a “landmark” that demonstrates the “continuing confidence of global investors in governance, management practices and development” of the industrial group.

Rajiv Jain, president and chief investment officer of GQG Partners, went so far as to personally stamp his approval for the group’s besieged patriarch.

“Gautam Adani is considered by many to be one of the best entrepreneurs of his generation,” says Jain. in a joint statement.

GQG has small interests in four different Adani companies ranging in size from 2.5% to 4.1% companies, among other assets owning and operating the largest airport and port in India.

The largest single investment was a $662 million purchase of a stake in Adani Enterprises, the group’s flagship company tasked with helping India become more economically self-sufficient.

“Adani companies own and operate some of the largest and most important infrastructure assets across India and around the world,” Jain added.

Who is Rajiv Jain?

Born and raised in India, Jain moved to the United States in 1990 to pursue a master’s degree in business administration at the University of Miami.

After joining the New York-based wealth management arm of Vontobel Bank as a portfolio manager, Jain was appointed chief investment officer in January 2002. He continued. built a business from assets under management (AUM) under $400 million at the time. nearly $50 billion by the time he left in 2016.

He played such an important role for the Swiss bank that its shares collapsed on the day it was revealed Jain was give up to go into business for yourself.

“Simply put, Rajiv Jain is the face of New York-based asset manager Vontobel,” said an analyst at Zuercher Kantonalbank. at that timesecurities downgrade.

The star hedge fund manager is described in a Profile February 23 via Bloomberg is “everything Cathie Wood is not”.

What is a GQG Partner?

In June 2016, Jain went on to co-found GQG Partners with Tim Carver. Within a yearThe duo has been assigned to manage $5 billion.

While not a household name like ARK Invest’s Wood, Jain has used his list of connections to quietly build a company with $92 billion in AUM as of the end of January.

While it is based in Florida hotspot Ft. Lauderdale, it chose in October 2021 listing its shares in Australia, a resource-heavy equity market known for catering to mining and energy companies like BHP Billiton and Rio Tinto and their investors.

The fund manager, which specializes in emerging markets, currently has a market capitalization of A$4.23 billion, or $2.9 billion.

In January, Jain informed a client that his firm’s portfolio was underestimating the US tech sector, Wood’s preferred sector.

“With sales expectations high but IT budgets slowing, margins in that space could disappoint.” I wrotewarns of a “dark earnings outlook” when the odds are not in investors’ favor.

What was the reaction to GQG’s decision to invest in Adani?

Hindenburg Study by Nate Anderson, a famous short seller with expose the scam at Nikola Motors, accused the Indian conglomerate for decades of corporate misconduct, charges it has denied.

However, this failed to prevent nearly $120 billion in value from being removed from its seven listed companies. reality overnightwith Gautam Adani’s personal wealth dwindling in the process.

Early last month Adani was forced to fold One Full registration raise equity will raise $2.5 billion for his companies. Right after that it halve growth target and scale back capital expenditure plans in an effort to save cash.

Before the controversy surrounding the company, GQG Partners contacted the client to explain the reason for investing in such potential companies. risky assetsbased on Reuters.

“There is a very high degree of skepticism about what those stakes mean, whether they understand the risk they are taking,” said Jun Bei Liu, manager of the Tribeca Alpha Plus Fund.

Shares in GQG Partners fell 3% on Friday, underperforming Australia’s broader equity markets, following the news.

In an interview with Bloomberg conducted just days before the investment, Jain downplayed the charges in Adani as “very hot-tempered”, and dismissed the suggestion that the corporation could be the biggest fraud case in India. since Satyam Computer Services over a decade ago.

“These are managed properties, you can verify a lot of these revenue streams from other places,” he said. on February 23. “So I think this is not Enron, or Satyam for that matter.”

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