Accounts reveal huge dividends paid to hedge fund tycoon Michael Cohen

Mr Cohen is reported to have earned hundreds of millions of pounds in his time running the operation’s investments in Europe, Africa and the Middle East

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The Independent Online

The London hedge fund tycoon whose division is being investigated by the US authorities over alleged corruption in Africa was paid more than £5.5m in the year before he retired at 41, accounts show.

Michael Cohen set up and ran the hugely successful London arm of Och-Ziff, the giant New York hedge fund.

He is reported to have earned hundreds of millions of pounds in his time running the operation’s investments in Europe, Africa and the Middle East, and lives in a 930-acre Hampshire estate once home to the Duke of Wellington.

But it is his investments in Africa for which his London operations are now becoming best known. The US Department of Justice and the Securities and Exchange Commission announced in the spring that they were investigating the firm’s operations in Africa.

Reports last week claimed the investigators were focusing on payments allegedly made by Och-Ziff to a middleman called Mohamad Ali Ajami to secure an investment of $300m (£190m) from the Libyan sovereign wealth fund during the Gaddafi era. It is not known if Mr Cohen is personally under investigation.

Recently filed figures from Och-Ziff Management Europe show that Mr Cohen was paid £5.5m in 2012 and what was described as “a portion” of a £3.6m payment to directors last year – for his final few months in office.

Sources close to Mr Cohen said the payment was made in the form of dividends from shares he has built up in the US parent company. They denied the sums had amounted to a payoff.

 The accounts show that Och-Ziff’s “code staff” – meaning employees taking important investment decisions under UK regulatory definitions – were paid £36m last year. The company said it employed 36 “investment professionals” at that time.

Och-Ziff’s London office has been involved in numerous controversial deals in Africa, including an investment in Camec, a London Stock Exchange-listed company which gave $100m to the government of Robert Mugabe as a loan in return for a stake in platinum assets in Zimbabwe. Camec says the funds went to a series of international creditors, primarily for seeds, grain, fertiliser and fuel. Critics say the loan allowed Mr Mugabe to fund, and win, his violent 2008 election contest with Morgan Tsvangirai.

Documents seen by The Independent from a 2007 tax presentation for Och-Ziff by PricewaterhouseCoopers highlight the circle of African fixers and investors with whom Mr Cohen mixed.

The presentation outlines the tax structure of a private equity fund being planned to invest in African mining and minerals, called the Africa Fund. It says Och-Ziff was to invest $300m, with decisions made by an “investment committee” including Mr Cohen, the then-JPMorgan mining banker Lloyd Pengilly and Walter Hennig – a controversial South African diamond trader. Other powerful African business leaders on the committee included Tokyo Sexwale, Mark Wilcox and Mikki Xayiya.

Mr Hennig’s Palladino investment vehicle was later mired in controversy over a $25m loan to the government of Guinea which was reportedly made in return for a potential 30 per cent slice of the mineral-rich country’s national mine company. Guinea eventually cancelled the deal and repaid the loan after negative publicity about it in the British press.

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