The Tale Of Three Funds

This article explores the collapse of three funds across three different jurisdictions and then sets out some of the lessons to be learnt by directors and fund managers.

1MDB

1Malaysia Development Berhad (1MBD) was founded in 2009 as a Malaysian state investment fund established to develop the nation's tourism and green energy by then Prime Minister Najib Razak. 1MDB raised billions of dollars from the Middle East and leading banks like Goldman Sachs, ostensibly for infrastructure projects. However, the U.S. Department of Justice has alleged that from 2009 to 2014, $4.5bn was diverted to shell companies and offshore accounts to enrich corrupt government officials. The money was spent on an array of eye-watering purchases including but not limited to: $275m on luxury goods such as watches and jewellery, $100m into funding Hollywood production The Wolf of Wall Street and $85m in gambling debts run up in Las Vegas.