How a ethically dubious Emirati sheikh and the investment fund he chairs own, via Fortress, a slice of Atlantic Yards
A June 29 New York Times article, The Sheikh Who Conquered Soccer and Coddles Warlords, offers a skeptical portrait of the enigmatic Sheikh Mansour bin Zayed al-Nahyan, whose older brother rules the United Arab Emirates. About the younger one:
From the Times:
When the acquisition was completed, Fortress said it "manages over $48 billion of assets on behalf of approximately 2,000 institutional investors and private clients."
The Emirati vice president is best known as the owner of Manchester City, a top English soccer team. Behind the scenes, he has been described as the “handler” guiding his country’s secret foreign wars.More on that:
Yet in interviews with more than a dozen American, African and Arab officials, he is described as being at the sharp end of his country’s aggressive push to expand its influence across Africa and the Middle East.The Fortress connection
In places like Libya and Sudan, they say, Sheikh Mansour has coddled warlords and autocrats as part of a sweeping Emirati drive to acquire ports and strategic minerals, counter Islamist movements and establish the Gulf nation as a heavyweight regional power.
From the Times:
As deputy prime minister and vice president, he controls key institutions, including the Emirati central bank, the national oil company and the Abu Dhabi criminal authority. He chairs Mubadala, a fast-growing $330 billion sovereign wealth fund with investments in artificial intelligence, semiconductors and space tourism.Yes, he chairs Mubadala, which in May 2024, as I reported, led a consortium acquiring (see press release) 68% of equity in New York-based Fortress Investment Group, though Fortress management, which owns 32%, can still control the board.
The Atlantic Yards connection
In 2023, The Real Deal reported that Fortress in 2020 bought a stake in the remaining EB-5 debt organized by the U.S. Immigration Fund (USIF). No official information has been shared.
In April, I suggested that Fortress, a periodic partner with EB-5 intermediary USIF, acquired its stake through a complex series of processes in late 2020, after the pandemic began.
The collateral for the debt are the Greenland USA affiliates that have development rights to six sites (B5-B10) over the MTA's Vanderbilt Yard, which require a platform.
The USIF encouraged investors in AYB Funding 100, the first of two EB-5 loan funds, to move up to $150 million to TSX Broadway and those in AYB Funding 200 to move up to $50 million.
The USIF offered both a carrot and a stick. The carrot was a purportedly better investment, based on economic conditions and risks.
The stick was a warning that Fortress would be in control. For example, the AYB Funding 100 investors were told that, on the purchase and sale of “a portion” of the loan, Fortress would be the “majority owner” and would “control all major decisions affecting the EB-5 Loan and the collateral,” which could means the original investors would lose their investment “in a default, restructuring or foreclosure scenario.”
It’s unclear how Fortress could become the majority owner of each loan without acquiring a majority, though that might reflect contract language crafted by the USIF.
It’s also unclear whether Fortress purchased portions of each loan by investing cash in each LLC, or whether it acquired its stake via a swap of obligations or a more convoluted deal.
That brings us to today. The flowchart above shows where things might stand, with considerable uncertainty regarding how much of the AYB Funding entities are owned by Fortress, the original investors, or a USIF affiliate.
The USIF offered both a carrot and a stick. The carrot was a purportedly better investment, based on economic conditions and risks.
The stick was a warning that Fortress would be in control. For example, the AYB Funding 100 investors were told that, on the purchase and sale of “a portion” of the loan, Fortress would be the “majority owner” and would “control all major decisions affecting the EB-5 Loan and the collateral,” which could means the original investors would lose their investment “in a default, restructuring or foreclosure scenario.”
It’s unclear how Fortress could become the majority owner of each loan without acquiring a majority, though that might reflect contract language crafted by the USIF.
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| This chart is speculative |
It’s also unclear whether Fortress purchased portions of each loan by investing cash in each LLC, or whether it acquired its stake via a swap of obligations or a more convoluted deal.
That brings us to today. The flowchart above shows where things might stand, with considerable uncertainty regarding how much of the AYB Funding entities are owned by Fortress, the original investors, or a USIF affiliate.
As noted above, upon the 2023 foreclosure filing, we learned of two new USIF entities. DBD AYB Funding (for the first loan) and DBD AYB Funding II (for the second loan). These so-called administrative agents were cited in the foreclosure notices. It’s unclear whether they have supplanted the manager or simply work with the manager.
Add in Cirrus
Note that the flowchart ignores the role of Cirrus Real Estate, which has entered the project by acquiring--or promising to acquire--some of the EB-5 debt and/or any Greenland USA remaining equity, which could mean development rights for Site 5 and B1.
Cirrus itself can't be a permitted developer, since it's just a funding/investment entity. A Cirrus-led joint venture, apparently involving the development company LCOR, is pending approval by Empire State Development (ESD), the state authority that oversees/shepherds the project.
If/when that happens, perhaps ESD can enlighten us regarding the ownership, and control, of the project.
Even if Sheikh Mansour and Mubadala just supply capital, with no capacity to steer decisions, it still means that the future Atlantic Yards profits would be associated with some notably unsavory activities.
Another Mubadala note
In March 2022, I cited a True Hoop podcast, BRING IT IN: Sportswashing and the NBA, which describes a very tangled trail:
In March 2022, I cited a True Hoop podcast, BRING IT IN: Sportswashing and the NBA, which describes a very tangled trail:
Today, TrueHoop’s Henry Abbott and David Thorpe discuss:
Don’t you wish it was just about sports? One NBA powerbroker (Ari Emanuel of Endeavor) cut a deal face to face with Vladimir Putin, another (Joe Ravitch of the Raine Group) is helping Kremlin-connected oligarch Roman Abramovich sell Chelsea F.C. right now.
Endeavor and the Raine Group both reportedly raised a ton of money from the Emirates-based Mubadala Investment Company. Mubadala is also the biggest outside investor in Apollo Global. Apollo Global’s founder, Leon Black, funded Jeffrey Epstein.
It should be noted that Ravitch, son of the estimable "wise man" Richard Ravitch, worked on the Nets sale to Mikhail Prokhorov. And that, I suspect, helped keep his father, a lonely critic of the West Side Stadium, from being a critic of Atlantic Yards.
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