Liechtenstein's princely family is proud of its philanthropic activities – but fell for an alleged fraudster when it was building its impact arm. It is now getting a fillip from billionaire George Soros.
The so-called «princely strategy» is a marquee selling point for Vaduz-based LGT: investing alongside the Liechtenstein monarch's family. Part of this is impact investing: the royal clan began seeking returns in companies and organizations in underdeveloped countries.
The segment is a source of booming revenue for LGT. Its impact investment strategy is essentially a private equity fund run by experts who hunt for and buy into fast-growing companies with «impact». Lightstone, the portfolio's name, is a play on the family's (and country's) name in English.
Billionaire Tie-Up
On Wednesday, LGT said Lightstone will take over Aspada, an Indian impact investor. George Soros has bankrolled Aspada so far: the billionaire and high-profile philanthropist co--founded Aspada via his Soros Economic Development Fund more than ten years ago.
Aspada, LGT said on Wednesday, currently manages $100 million in companies in food supply chains, healthcare, education, and financial services in India. The aim is social progress coupled with commercial capital, on a large scale.
Impact Turmoil
Neither LGT nor Bengalaru-based Aspada disclosed financial details of the transaction. Lightstone's aim is to become a meaningful contributor in impact investing and sustainability, with Aspada towards its next phase of growth.
The wording is cautious: Lightstone was hit with considerable turmoil. In February, a key team left – including LGT Impact CEO Sev Vettivetpillai, according to «Reuters». LGT was mum on the sudden exit, shortly after Vettivetpillai joined from Abraaj, a collapsed buyout fund.
Drawing a Line
In April, Vettivetpillai and Arif Naqvi, the founder of Abraaj, were arrest in London. The duo and others are suspected in a fraudulent scheme which ensnared the Bill & Melinda Gates Foundation. The U.S. has called for the alleged perpetrators to be extradited for trial.
Impact investors who allegedly ran a billion-dollar fraud scheme aren't helpful for the white-glove reputation of the princely bank. LGT clearly wants to draw a line under the Vettivetpillai chapter: Aspada marks a new beginning.