Ailing firm Marto Capital applied for PPP money – and got approved, Records Show
Marto Capital – a former prodigy founded by a former Bridgewater Associates star – has been approved for US government emergency funds, records showed Monday.
Katina Stefanova’s New York-based company has reportedly received between $ 150,000 and $ 350,000 in potentially recoverable loans under the Paycheck Protection Program, which aims to help save small businesses hit by the coronavirus pandemic. Marto has neither confirmed nor commented on the loan.
Notably, Marto has not kept any jobs with the funds, according to published data. Signature Bank approved his request on April 28, according to official documents.
But it is not clear what Marto Capital’s business is, or whether it plans to repay the money received.
Marto has relinquished his active status with the major US industry regulators. On its website, the company is called a “new age investment company”.
Founded as a hedge fund company in 2015, Marto has attracted hundreds of millions of capital from branded seed companies, including PAAMCO Prisma. Stefanova has become a shining face in the investment industry, leading what many saw as a spin-out from one of the world’s most successful hedge funds, Bridgewater.
But the original Big Three investors withdrew their money, and Marto went from around $ 235 million company-wide in April 2019 to just $ 10-20 million in his once-flagship systematic product d. ‘by the end of the year, according to confidential files and an estimate from the former employee.
Marto Capital relinquished its ability to manage external capital in February by terminating its registration with the Securities and Exchange Commission. Stefanova’s company also went out of business in May, stepping down as a commodity pool operator and a member of the National Futures Association.
Yet Stefanova claimed in February that she had secured an investment of more than $ 1 billion from a single ultra-wealthy individual.
[II Deep Dive: Katina Stefanova Claims a $1 Billion Investment in Marto Capital. Is It Real?]
It would not identify the investor, allow a third party to verify the funds, or provide official proof that the money exists.
Experts have said that investment firms cannot handle $ 1 billion in outside money without SEC registration. Asked about this situation, Marto responded through a lawyer. “Marto Capital is not subject to SEC registration requirements,” wrote Michael Ledley 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 did not continue.)
The company did not want to say how it was exempt. Marto also did not respond when asked about his PPP windfall.
Taking PPP money is a controversial decision for companies in the investment industry, which have not suffered much from the Covid-19 pandemic. Assets under management for the entire industry remain as vast as ever, and the industry enjoys the highest average profit margins in the U.S. economy.
Ritholtz Wealth Management, for example, drew heavy criticism for its successful loan application, but paid off the money in a short period of time.
PPP loans are in many cases forgivable. The Small Business Administration made public on Monday the recipients who received $ 150,000 or more, reversing the Treasury’s original position that they could be kept under wraps.