Troubled Firm Marto Capital Asked for PPP Money — and Got Approved, Records Show

Katina Stefanova’s onetime hedge fund won’t say if it’s planning to repay taxpayers for any funds received.

New York City, New York. (Bigstock photo)

New York City, New York.

(Bigstock photo)

Marto Capital — a former wunderkind founded by an ex-Bridgewater Associates star — got approved for emergency funds from the U.S. government, records showed Monday.

Katina Stefanova’s New York City-based firm would have received between $150,000 and $350,000 in potentially forgivable loans under the Paycheck Protection Program, which aims to help save small businesses hurt by the coronavirus pandemic. Marto did not confirm or comment on the loan.

Notably, Marto retained zero jobs with the funds, according to the released data. Signature Bank approved its application April 28, per the official records.

But it’s not clear what Marto Capital’s business actually is, or if it plans to repay any money received.

Marto gave up its active status with the industry’s main U.S. regulatory bodies. On its website, the company calls itself a “new age investment company.”

Founded as a hedge fund firm in 2015, Marto attracted hundreds of millions in capital from brand-name seeding firms including PAAMCO Prisma. Stefanova became a sparkling face in the investment industry, running what many saw as a spin-out from one of the world’s most successful hedge funds, Bridgewater.


But the original three big-name investors pulled their money, and Marto shrunk from about $235 million firm-wide in April 2019 to just $10 million to $20 million in its once-flagship systematic product by year-end, according to confidential records and a former employee’s estimate.

Marto Capital relinquished its ability to manage outside capital in February by terminating its registration with the Securities and Exchange Commission. Stefanova’s company further decommissioned itself this May, withdrawing as a commodity pool operator and member of the National Futures Association.

Yet Stefanova claimed in February to have secured a $1 billion-plus investment from a single ultra-rich individual.

[II Deep Dive: Katina Stefanova Claims a $1 Billion Investment in Marto Capital. Is It Real?]

She would not identify the investor, allow a third-party to verify the funds, or provide evidence on-the-record that the money exists.

Experts said that investment firms cannot manage $1 billion in outside money without SEC registration. When asked about this situation, Marto responded through an attorney. “Marto Capital is not subject to SEC registration requirements,” Michael Ledley wrote in a cease-and-desist letter — the second of three Institutional Investor received from Marto — and threatened to sue if II published the article. (Marto has not sued.)

The firm would not say how it was exempt. Nor did Marto respond when asked about its PPP windfall.

Taking PPP money is a controversial move for firms in the investment industry, which has not suffered substantially under the Covid-19 pandemic. Industrywide assets under management remain as vast as ever, and the sector enjoys among the highest average profit margins in the U.S. economy.

Ritholtz Wealth Management, for example, drew strong criticism for its successful loan application, but repaid the money in short order.

PPP loans are in many cases forgivable. The Small Business Administration on Monday publicly disclosed recipients that received $150,000 or more, reversing the Treasury’s original posturing that they may be kept secret.