The London connection: Former UK boss of Wall Street hedge fund could be drawn into corruption investigation
The millionaire ex-director of Och-Ziff, Michael Cohen, could be the man in the spotlight
With his Hampshire estate boasting one of the finest shoots in the county, the 42-year-old City tycoon has all the trappings befitting one of the most powerful hedge fund investors in Europe. His dealmaking prowess is as legendary in hedge fund circles as the battle strategies of the Duke of Wellington, the one-time resident of his grand 920-acre spread.
So powerful was his hedge fund company, Och-Ziff, that it was made one of the 16 key "priority investors" in the Royal Mail flotation which made millions of pounds in instant profits by being given extra allocations of the underpriced shares.
But now Michael Cohen, a former director of Och-Ziff Management Europe Ltd, ex-member of the City's Hedge Fund Standards Board and one of Britain's richest men, could be drawn into a US corruption investigation into controversial investments the company made in Africa which could cost Och-Ziff tens of millions of dollars if any wrongdoing is found to have occurred.
Och-Ziff Capital Management, the parent company in the US, admitted in March that the group was being investigated under the country's Foreign Corrupt Practices Act by the Securities and Exchange Commission and the US Department of Justice over investments it provided to "a number of companies in Africa". One US law firm is already apparently planning a legal action both against the Och-Ziff parent firm and any executives who could be responsible in the event of any wrongdoing being proved.
Now it has emerged that among the deals which may be in question are those carried out from Och-Ziff's London office, which was run, until he resigned last year, by Mr Cohen.
Mr Cohen reportedly banked more than £400m over his last six years at the firm, making him one of the best-paid hedge fund executives in Europe.
The US authorities have not specified which contracts it is investigating, but they are likely to include a number of Och-Ziff deals conducted by Mr Cohen's London division which have been the subject of criticism by pressure groups and NGOs.
Colonel Gadaffi's Libyan sovereign wealth fund
Och Ziff's statement to the New York Stock Exchange specified that investments from a sovereign wealth fund were being investigated by the SEC and DoJ, and sources close to the matter cited in the US media have confirmed this to mean the Gadaffi-era Libyan Investment Authority.
Mr Cohen's team persuaded the LIA, which was closely linked to Colonel Gadaffi's son Saif, to invest hundreds of millions of dollars of its oil money in Och-Ziff's funds.
One LIA document obtained by the NGO Global Witness in 2011 showed it had invested $300m with Och-Ziff.
The LIA, under the current government in Tripoli, has brought civil lawsuits in London against Goldman Sachs and Société Générale for alleged corruption in how they persuaded LIA officials to invest with them. Och Ziff is not named in that suit and the two banks which are deny the allegations.
Another controversial investment by Och-Ziff's London arm was in a property developer in which it invested with Wafic Said, the UK based tycoon famed for his role in the BAE-Saudi Arabia arms deal known as Al-Yamamah.
They invested in a company called Magna Holdings, which hired as directors the former Lord Mayor of London, Sir Anthony Jolliffe, and Lord Powell, Margaret Thatcher's Downing Street chief of staff.
Magna was set up to invest in Libya in the weeks after Tony Blair's administration negotiated the peace deal with Colonel Gadaffi. The set-up was controversial, as Lord Powell's brother Jonathan was a key Blair aide at the time. Last month Jonathan Powell was engaged by David Cameron as an envoy to advise on negotiating peace between rival Libyan factions.
One of Magna's investments was in a Tripoli hotel project with Britain's Intercontinental Hotels Group, which has confirmed that it is cooperating with the US authorities over "certain Libya-based companies". IHG said it was not itself under investigation.
Lord Powell said that as far as he was aware, neither Magna, nor any of its directors or Mr Said were the subject of any investigation, and there is no suggestion of any wrongdoing by the company or any individuals involved with it.
A key fixer at the heart of Magna was a London-based Middle Eastern dealmaker called Mohamad Ajami, who did not return calls.
Magna is now in the process of being liquidated, while sources close to Lord Powell and Mr Said said Magna and its investors had themselves been the victim of a fraud. Friends of Mr Said said he has lost "substantial" sums from Magna and had repeatedly complained about poor management practices there.
Congo mining deals
Mr Cohen's London office was also behind a brace of loans to Dan Gertler, a controversial Israeli mining billionaire, for oil and mining projects in the Democratic Republic of Congo.
Mr Gertler has been repeatedly criticised by NGOs which claim he has repeatedly been able to buy Congolese mining assets on the cheap before selling them on at sometimes vast profits. The former UN secretary general Kofi Annan's Africa Progress Panel last year issued a report critical of such deals involving the tycoon. Mr Gertler strongly rejects the Africa Progress Panel report.
The Och-Ziff investments were made in 2008 and 2010 and totalled $234m, according to Wall Street Journal reports confirmed by Mr Gertler's office.
Mr Cohen has retained personal lawyers to represent him over the US investigations. They have advised him not to comment in public. Friends said he stood down from the UK office last year, saying he felt "burnt out" and wanted to spend more time with his family.
While he was running the London office at the heart of the African deals, he had a sizeable team and was not personally involved in every aspect of them, friends point out.
Records with Companies House and the Financial Conduct Authority show he has not been registered either as a company director or financial executive since leaving Och-Ziff last April. He is believed to be on two years' gardening leave – a City term meaning he is not allowed to set up or work for a competing firm. Friends describe his current status as "a gentleman of leisure" but predict he will return to the hedge fund world at some stage.
An American who is believed to have taken up British citizenship, Mr Cohen cuts a huge figure in the City thanks to the investment might of Och-Ziff. His Hampshire estate cost him a cool £14m and was said to be the former home of John Lewis boss Charlie Mayfield.
He was a director of the Hedge Funds Standards Board, which gained prominence at the height of the financial crisis when "hedgies" came under political attack for taking big gambles that Britain's banks would collapse.
With investigators circling, his next venture may be a longer wait than he had hoped.
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