A hedge fund said to be closing up shop, a former fund manager’s family office, and a venture capital fund launched in 2015 are among the thousands of businesses listed as recipients of loans through the federal government’s Paycheck Protection Program.
On Monday, the Small Business Administration made public a list of the more than 660,000 companies that received a loan larger than $150,000 through the program, which is intended to help businesses keep people employed during the coronavirus pandemic.
If a company meets certain eligibility standards, part, or all, of the loan will be forgiven. The loans also carry a one percent interest rate, according to the SBA’s website.
Some firms listed in the SBA’s data have called its accuracy into question, however. Electric scooter company Bird shared on Twitter that it was “erroneously” listed among loan recipients. According to Bird, the firm neither applied for nor received a PPP loan. One firm contacted by Institutional Investor for this story experienced a similar issue: its CEO said via email Monday that the firm did not receive a PPP loan, despite being listed in the data. And three other firms listed in an earlier version of the story that did not respond to a request for comment or could not be reached for comment subsequently responded to say that they, too, had been listed in error.
According to the data released Monday, activist hedge fund firm Marcato Capital Management was approved for a loan of between $150,000 and $350,000 from the program. In late December, CNBC reported that the firm was liquidating. A spokesperson for the firm did not immediately return an email seeking comment.
Meanwhile, John Kleinheinz — whose hedge fund firm Kleinheinz Capital Partners shut down in 2012, according to Reuters — was listed as a recipient of a loan for his family office, Kleinheinz Capital Partners. The loan was between $150,000 and $350,000 in size, the data show. Kleinheinz contacted II after publication to say that while his firm's bank prepared a PPP loan application for him to sign, he did not sign it and his firm has not accepted a PPP loan.
Aegis Capital, an investment bank that was fined by FINRA in 2015 for allegedly improperly selling unregistered penny stocks, was listed as receiving between $1 million and $2 million from the program, the data show. A spokesperson for the firm did not return an email seeking comment.
Healthcare investment firm Altium Capital received between $150,000 and $350,000, according to the list. The firm was founded by Jacob Gottlieb, who is also the founder of Visium Asset Management, a hedge fund firm that, in 2018, settled charges by the Securities and Exchange Commission that it engaged in insider trading and asset mismarking. A spokesperson for the firm did not return an email seeking comment.
Hedge fund firm Marto Capital was listed as a recipient of between $150,000 and $350,000 through the program. The firm, founded by ex-Bridgewater executive Katina Stefanova, has come under scrutiny for major investor redemptions, staff turnover, and terminating its SEC registration. Marto did not respond to a request for comment in time for publication.
[II Deep Dive: The Untold Story of Katina Stefanova’s Marto Capital]
The data show that Venture firm Foundation Capital’s eighth fund, which was launched in 2015, was approved for a loan worth between $1 million and $2 million, although the company contacted II after publication to say that it never applied for or received a PPP loan. The applicant was one of its portfolio companies, and the processing bank listed Foundation as the applicant in a data entry error, according to a company spokesperson.
Fellow venture firms Andreessen Horowitz — also called a16z — and Paladin Capital Management were listed as receiving between $350,000 and $1 million each from the program, according to the list. A spokesperson for a16z contacted II after the story was initially published to say that it did not apply for or receive a PPP loan. A spokesperson for Paladin declined to comment on Monday.
Asset management firms Vukota Capital Management and Taurus Asset Management each received between $150,000 and $350,000, the list showed. Spokespeople for each did not return an email seeking comment.
Equity investment firm Cardinal Capital Management was listed as receiving between $350,000 and $1 million from the program, according to the list. A spokesperson for the firm contacted II to dispute its listing, saying it never applied for or received PPP loans.
Editor’snote: An earlier version of this story stated that Arex Capital Management was approved for a PPP loan, according to the SBA’s list of firms that received these loans. Arex contacted II following the publication of the story to say the firm did not receive such a loan and that its name was listed by the SBA in error.