Money Ain't a Thang? AR revisits Jay-Z’s lawsuit against Highland and Jack Abramoff’s defrauding of Citadel

February 08, 2011   Lawrence Delevingne

A look back at the archives also includes QIM’s closures and BlackRock’s energy bonanza.

 Shawn "Jay-Z" Carter

One year ago

»» Hip-hop star Jay-Z filed a $3.7 million lawsuit against Highland Capital Management, accusing the Dallas hedge fund firm of trying to "bleed" him for interest payments of roughly $20,000 a day on a loan gone bad.

The rapper, née Shawn Carter, was to build a boutique "J" hotel on West 21st Street in Manhattan, a site he bought in 2007 as the real estate market around the High Line park was peaking. The $52 million loan from Highland matured in August 2009 and the meetings between teams for the rapper and money manager failed to restructure the deal.

The legal fight in New York court ended in October when the matter was settled out of court. New York City records show that Carter transferred the property to Highland, which initially called the rap star’s claims "meritless." According to the November 2010 sale document, the property’s assessed value was $3.9 million with a sale price of $52 million, the amount of the senior loan taken on the property.

Through spokespeople, Carter and Highland declined to comment.

»» Quantitative Investment Management, Jaffray Woodriff’s now $5.58 billion commodity hedge fund firm, said it was closing its two largest funds to new investments. The firm was also liquidating four of its smaller funds, citing poor performance and a lack of investor interest.

It didn’t last long. The two funds that closed reopened to new investments December 1. As of January 1, the Quantitative Global Program had $4.46 billion in assets under management after falling 3.40% in 2010, according to investor materials, and the Quantitative Tactical Aggressive fund managed $500 million after generating a 15.16% return last year. Both funds were up in January, 0.30% and 6.17%, respectively.

Five years ago

»» A small loan made by Ken Griffin's Citadel returned to haunt the firm thanks to disgraced former Washington lobbyist Jack Abramoff. The deal from 2000 resurfaced when Abramoff pled guilty to wire and mail fraud aimed at tricking Citadel and another lender, Foothill Capital, to put up $60 million to help finance his purchase of the SunCruz Casino fleet of offshore gambling boats. The Hollywood-like story included Abramoff allegedly bribing a congressman in relation to the deal and the SunCruz owner being murdered in a mob-style shooting.

Casino Jack

Abramoff was later sentenced to five years and 10 months in prison and was ordered, along with his business partners, to repay Citadel and other lenders. "Casino Jack," as Abramoff was called (also the name of a recent biographical movie starring Kevin Spacey) was released in December 2010.

»» The BlackRock Small-Cap Energy Hedge Fund netted a 42.33% gain in 2005, besting its average peer in the AR Global Equity Index by a factor of almost three. The honor was all the more impressive given that global equities was the top strategy in 2005.

Recent performance could not immediately be obtained and BlackRock did not respond to a request for information.

FYI, regarding the "Money Ain't a Thang" phrase in the headline, it is a reference to a song from rapper Jermaine Dupri's 1998 album "Life in 1472" (details here: The song features Jay-Z.

Some key lyrics:
I flex the rol', sign a check for yo' hoe
Jigga's style is love, X and O
Save all your accolades, just the dough
My game is wide, all lames aside
Tryin to stay alive, hundred thou' for the bracelet
Foolish, ain't I? The chain'll strain ya eye
Twin platinum gun son, aim for the sky
Ice on my bullet, you die soon as I pull it
Willies wanna rub shoulders, your money's too young
See me when it gets older, ya bank account grow up
Mine's is one-zero-zero-zero-zero-oh-doub'
Damn near out the rear trunk when I roll up
Multi til I close up, it's all basic
I been spending hundreds since they had small faces
Rob your stash house, doubled out down in Vegas
Me and Jermaine Dupri got it locked crazy
Where you at haters?

Rap Enthusiast Feb 09, 2011

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