As Kushner’s Investment Firm Steps Out, the Potential Conflicts Are Growing

Jared Kushner’s investment fund is not especially large by global finance standards. But as he gets it fully up and running, each step is bringing with it ethical issues that would only grow if his father-in-law, Donald J. Trump, should win another term as president.

His $3 billion fund is financed almost entirely from overseas investors with whom he worked when he served as a senior adviser in the Trump White House. He has taken money from government wealth funds in Saudi Arabia, Qatar and the United Arab Emirates, as well as from Terry Gou, a founder of Foxconn, the Taiwan-based electronics manufacturer, whose role in Mr. Kushner’s firm has not been previously disclosed.

In total, 99 percent of the money placed with him by investors has come from foreign sources, according to a filing with the Securities and Exchange Commission in late March.

Mr. Kushner’s firm, Affinity Partners, is collecting approximately $40 million a year in management fees from those investors even before any share of profits earned on investments. He has made 10 investments to date, totaling $1.2 billion, many of them in companies based abroad.

The investments include stakes in the Shlomo Group, an Israeli car-leasing and financing company; Dubizzle Group, a Dubai-based online real estate site; EGYM, a Munich-based electronic fitness company; Mosaic, a California-based solar lending site; and Zamp, an Abu Dhabi-backed fast food company that operates more than 1,000 restaurants in Brazil.

Other investments include two insurance businesses and a software company.

The foreign transactions — previously unseen in scale and speed for a former White House adviser — are bringing fresh scrutiny as Mr. Kushner’s father-in-law again seeks the White House and control over American foreign policy.

Mr. Kushner’s business partner in the car-leasing firm is part owner of Israel’s only domestic builder of warships, putting him in business with executives who are also major shareholders in an Israeli military contractor whose vessels have been used in the war in Gaza, armed with American-made weapons.

Last month, Mr. Kushner announced plans for his biggest deals yet, including a $500 million hotel and condominium complex in Serbia and two other luxury developments planned on the Mediterranean coast of Albania. These projects benefited from relationships built in part during the Trump administration and directly involved the president of Serbia and the prime minister of Albania, with whom Mr. Kushner has met.

In a series of interviews, Mr. Kushner, 43, laid out new details of his effort to ramp up his firm. He also defended himself against the conflict-of-interest questions that have swirled around him since he left the White House and began soliciting investors.

“Following the laws and the rules is something we always do,” he said. “Perception, I’ve learned that from my time in politics, is important. But I can’t control what everyone is going to write or say about me.”

Mr. Kushner, the sole owner of the company, said he hoped to generate billions of dollars in additional returns for his investors and himself after helping to expand the companies he is investing in.

He has set up shop on the ninth floor of an office tower north of Miami. Its walls are filled with mementos from his time at the White House, including at least a dozen items signed by Mr. Trump, often with the words “Jared, Great Job. Thanks.”

Mr. Kushner has said he does not intend to return to the White House. But pressed on whether he would definitively rule out going back to government, he spoke instead about how happy he was in his life right now. He continues to offer advice to America First Policy Institute, a nonprofit set up by former Trump White House officials who are already preparing for a possible return to power.

Mr. Kushner said he understood that he could not avoid scrutiny. But he said repeatedly that he was confident he was acting ethically and legally and did not worry too much about what have become regular attacks from Democrats in Congress and ethics watchdogs.

It is not just liberal groups raising questions about Mr. Kushner’s activities.

Representative James R. Comer, Republican of Kentucky and the chairman of the House Oversight Committee — which has been investigating President Biden and his son, Hunter Biden — said in an interview on CNN last year that “what Kushner did crossed the line of ethics,” regarding the Saudi funding for Mr. Kushner’s investment firm.

J. Robinson West, a former Reagan administration official who went on to start a global energy consultancy, said there were three things that struck him as “unusual” about Mr. Kushner’s venture: the sheer amount of money he has raised, the speed at which he has raised it and the nature of his business.

“A lot of people leave government and become lobbyists or they start consulting firms,” Mr. West said, pointing to the former secretaries of state Henry A. Kissinger and Madeleine K. Albright.

But he said he could recall no precedent for a government official leaving office and starting an investment firm that would immediately receive billions of dollars from foreign governments with which the official had been working while serving in government.

“I think it’s fair to say that the spirit of public service and George Marshall and Robert Lovett — those days are past,” Mr. West added, referring to public servants from the post-World War II era.

Building His Portfolio

Mr. Kushner had come to the White House after serving nearly a decade as the chief executive of a real estate investment company built by his father and grandfather. His business philosophy, he said in one recent appearance, had been to focus on finding profits at the higher end of the market.

“I always found that you do better overpaying for Fifth Avenue than maybe, you know, kind of getting a bargain on kind of Second or Third Avenue,” Mr. Kushner said in February at a gathering of investment industry executives.

But his taste for higher-end deals brought complications, such as the $1.8 billion purchase of the office tower at 666 Fifth Avenue in Manhattan in 2007. The building’s mortgage became a crippling liability for the Kushner family when the recession hit later that year. The Kushners were bailed out nearly a decade later, during the Trump administration, by an investment firm that had ties to the government of Qatar.

Once Mr. Kushner took his post at the White House — as an unpaid senior adviser — he at times pushed aside more senior diplomats, such as Rex Tillerson, the former chief executive of Exxon Mobil who served as Mr. Trump’s first secretary of state.

Mr. Kushner developed a relationship with the Chinese ambassador and a friendship with Mohammed bin Salman, the Saudi crown prince, with whom he exchanged messages over WhatsApp. He also worked with Mexican officials to revise a trade deal with the United States.

Former Trump administration officials who worked closely with Mr. Kushner said he grasped immediately that as the son-in-law of the president he held an advantage over his more seasoned colleagues across the government. He privately acknowledged to colleagues that this was especially true in dealing with the Middle East, where top officials from autocratic governments understood the role of family members as first among equals.

He played a substantial role in the diplomatic breakthroughs between Israel and several Arab nations that were labeled the Abraham Accords, perhaps Mr. Kushner’s most significant White House achievement.

But the Jan. 6, 2021, storming of the Capitol by a mob of Mr. Trump’s supporters made the Trump family at least temporarily toxic to many corporate players in the United States. Major banks, real estate brokers and law firms dropped the family as clients.

Mr. Kushner said he saw the investment fund as his first opportunity to start a large-scale business entirely on his own. “I get to work with people I want to work with, make the decisions I want to make,” he said.

At his new investment firm office near Miami, with its floor-to-ceiling windows looking out over the Atlantic Ocean, Mr. Kushner had shed the thin, dark blue suits he wore in the White House, donning a sweater, slacks and a pair of New Balance running shoes, and sporting a beard with spots of gray.

Mr. Kushner did not dispute that the Middle East contacts he made while in government became the keys to his post-White House career.

Advisers to the Saudi sovereign wealth fund recommended rejecting a request from Mr. Kushner for an investment. “Why aren’t there any significant institutional investors from the U.S.?” the board of the investment committee of the Saudi Public Investment Fund asked about Mr. Kushner’s firm in late June 2021, just days before Affinity opened its doors, The Times first reported two years ago.

But Prince Mohammed, the Saudi leader, overrode the recommendations and backed his American friend to the tune of $2 billion. Mr. Kushner said in an interview that he had been told by an associate of Prince Mohammed, whom he still visits several times a year, that the Saudi leader had confidence in him because of his successful work on the Abraham Accords.

Qatar and the United Arab Emirates each invested more than $200 million in Mr. Kushner’s fund, The Times reported last year.

A smaller investment came from Mr. Gou, after Mr. Kushner had been credited in part for helping his company win up to $3 billion in tax subsidies for its planned but never built Wisconsin factory to manufacture flat-panel television screens and other consumer electronics. Mr. Kushner said he has known Mr. Gou for many years — having been introduced, he recalls, by Wendi Deng, the former wife of Rupert Murdoch.

John R. Bolton, who served as national security adviser to Mr. Trump before the two had a falling out, said in an interview that the intersection of Mr. Kushner’s White House role and his current business raised concerns about what he was up to while in government.

“Jared’s success with foreign funds leads to the question of what dealings he was having with them while he was still in the administration,” Mr. Bolton said.

As Mr. Kushner portrays it, he has been extremely diligent since the day he left the White House, avoiding ethically questionable moves such as accepting large fees for speeches or taking payments from corporations or foreign governments as a lobbyist or consultant.

Even when he wrote a book about his time at the White House, he said, he donated the advance to charity. His investment firm, he noted, is regulated by the S.E.C.

“One of the reasons I think firms like us as investors, they know that if Affinity comes in we’re a mark of kosher,” Mr. Kushner said. “Because again, we’re a highly scrutinized firm. We operate very professionally.”

But even Mr. Trump has in the past been critical of former government officials seeking money from foreign governments. During his 2016 campaign against Hillary Clinton, Mr. Trump condemned the fund-raising by the Clinton Foundation. “Outright corrupt,” he said during a speech.

Mr. Kushner said the comparison was not relevant, as Mrs. Clinton was secretary of state when some of the donations were made, while he is no longer in government.

Starting Off Slow

Mr. Kushner’s firm started slowly, as he recruited a staff of seasoned investment advisers, including Asad Naqvi, a former senior partner at a London-based global equity fund, and Bret Pearlman, a former Blackstone Group managing director. Others came to the firm from the White House and elsewhere in the federal government, including the Pentagon and the Energy Department.

The slow start turned out to be fortuitous. It meant that Mr. Kushner avoided some of the financial turbulence that accompanied a flood of investments by venture capital and private equity firms that subsequently came under pressure when interest rates surged and start-ups struggled to secure more funding.

“We avoided a lot of craziness in the beginning,” Mr. Kushner said. “And we’ve been very selective.”

Mr. Kushner said his firm had vetted at least 1,430 investment opportunities since opening in July 2021, closely evaluating about 300 potential deals and then making the 10 investments so far, in amounts ranging from $100 million to $500 million.

By the end of March, he said, $1.45 billion had been committed to firms it is investing in, and $1.2 billion had been distributed.

It will be several years still before the firm’s profitability can be evaluated beyond the fees it receives for managing its investors’ money. Firms like Affinity take a cut of up to 20 percent of the profits earned on their investments. Mr. Kushner points to growing revenues at several of the companies he has invested in, including EGYM, the German-based gym equipment outfit, and Emirati-based Dubizzle, the real estate advertising company, as early signs of good bets.

His first investment in Israel went into the Shlomo Group, a family-owned conglomerate that has a diverse array of assets, including divisions that handle construction, real estate, rental cars and shipbuilding.

The car-leasing group controls about 30 percent of the Israeli market and is looking to expand to new locations, including perhaps Saudi Arabia. Mr. Kushner took a 15 percent stake in the Shlomo Group’s car and credit business unit for a $150 million commitment.

Shmeltzer Holdings, the parent company of the Shlomo Group, is also a part owner of Israel Shipyards, the country’s only domestic shipbuilder for the Israeli Navy. Israel Shipyards built Israel’s fast-attack boats, named SA’AR 4.5, which are equipped with American-made missiles, along with several other ships for the Israeli Navy.

Because the United States provides Israel with billions of dollars in military aid each year, Mr. Kushner’s father-in-law could once again soon be in a position to help out Mr. Kushner’s business partner.

Israel Shipyards is already working on the design of a new ship for the Israeli Navy that is slated to include American-subsidized components. Asked about these ties, Mr. Kushner said he did not invest in that part of the company.

Asi Shmeltzer, the company’s chairman, said in an interview that it was not really the money that he needed from Mr. Kushner; it was help opening up the Middle East for his car-leasing businesses. “Yes, he has connections,” said Mr. Shmeltzer, who also serves on the board of Israel Shipyards. “It can damage him or help him. It is all about how he uses those connections.”

Philipp Roesch-Schlanderer, the chief executive of EGYM, said Mr. Kushner’s past work in government had no impact on his decision to accept a $215 million Affinity investment last year. Affinity had a healthy sum of available capital and business expertise to help his company grow, he said, as it starts operations in Denver and eventually elsewhere in the United States.

Mr. Kushner also recently teamed up with Mubadala Investment Company, the $280 billion Abu Dhabi-based sovereign wealth fund, as it moved to buy a larger stake in Zamp, the Brazil-based operator of Burger King.

This move is part of an effort by Mubadala to assume a controlling share in Zamp. It effectively turns Mr. Kushner’s firm and Mubadala Capital into business partners in Brazil as they join to bring more fast-food restaurants to the nation, and underscores the close nature of Mr. Kushner’s financial ties to Arab governments. This investment has not previously been disclosed.

In Serbia, Mr. Kushner is working to complete a government-backed deal to take control of the former Yugoslav military headquarters building in the center of Belgrade to transform it into a luxury development.

The transaction involves some of the same Serbian officials that Mr. Kushner’s business partner and former Trump administration colleague, Richard Grenell, dealt with in 2020, when negotiating a regional agreement that ultimately brought Serbia hundreds of millions of dollars in promised financial assistance from the United States.

And in Albania, where Mr. Kushner has negotiated the possible lease of a government-owned island to build another luxury hotel, the government has been moving to modify federal laws that will make it easier to build five-star tourist compounds in sensitive marine areas and wildlife preserves. Those changes could benefit Mr. Kushner’s proposed projects there.

A spokesman for Prime Minister Edi Rama of Albania said the legal changes were not written specifically to benefit Mr. Kushner. And Mr. Kushner, in the interviews, said he had played no role in lobbying for the changes, but called them a sign of a government that was smartly looking for ways to promote its tourist economy.

The problem, said Steven L. Schooner, a law professor at George Washington University and a former White House lawyer, is that even if Mr. Kushner is not intentionally seeking favors from foreign governments, he might be getting them.

“There are plenty of foreign governments that would like to be viewed favorably by the president of the United States,” Mr. Schooner said. “Entering into business deals with the future president’s son-in-law is one way to accomplish that.”

Mr. Kushner said he remained confident that if Mr. Trump was re-elected, all decisions his father-in-law made would be based on what was best for the country, not any family business interests. He added that no favors to him from any foreign government would be accepted.

“If they think they’re going to get special treatment from Trump because they’re doing a deal with me, they’re wrong,” he said. “That would be stupid.”

Re-emerging With New Visibility

Wearing flak jackets and escorted by Israeli military officials armed with machine guns, Mr. Kushner and his wife, Ivanka Trump, arrived at the Kfar Aza kibbutz in late December to tour the site of the massacre that had taken place there during the Hamas terrorist attack on Oct. 7. He picked up a bullet left on the ground and carried it back to his Miami office as a reminder of what had happened there.

It was another step in the re-emergence of Mr. Kushner, whose experience and connections in the Middle East drew attention to his firm in the aftermath of the attack, increasing what he calls “deal flow.”

On podcasts and in public appearances recently, he has been able to cite his role in helping negotiate the Abraham Accords, which helped ease tensions between Israel and a number of Arab nations.

His increased visibility these days stands in contrast to his posture after Jan. 6, when he and Ms. Trump retreated from the public eye and made their home on an island near Miami that the tabloids labeled “Billionaire Bunker.”

The podcast interviews and university appearances he has made since the Oct. 7 attack in Israel have generally been friendly affairs in which Mr. Kushner has not been confronted with questions about the potential for conflicts of interest should his father-in-law retake the presidency. One podcaster lauded Mr. Kushner as “one of the most influential presidential advisers in modern history.”

The impact on his business was immediate, Mr. Kushner said.

“That I think was very, very big for the firm because it opened up a whole new sector to us,” Mr. Kushner said of his appearance on a podcast hosted by Lex Fridman, a Russian American computer scientist, and a second podcast called All-In, both of which have large followings in Silicon Valley. Mr. Kushner said that after the shows, artificial-intelligence-related companies and other Silicon Valley investors had reached out to him looking for ways to work with his firm.

From Mr. Kushner’s perspective, this broader acceptance is a well-deserved counterpoint to media coverage that he felt unfairly questioned his motives and ethics.

But he is not just another financier.

In December, Mr. Kushner organized a lunch meeting in New York City with the prime minister of Qatar that featured investment industry stars including Bill Ackman of Pershing Square Capital Management and Barry Sternlicht of Starwood Capital to talk about the war in Gaza, a gathering reported earlier by Axios.

The Qatari government, whose funds have invested in Mr. Kushner’s firm, is also a major financier of Hamas and has played a crucial role in the Gaza hostage negotiations.

It was the kind of gathering with a foreign head of state that the head of a relatively small private equity fund could have never arranged, were it not for Mr. Kushner’s prior White House role.

“We’re kind of at the beginning of the middle phase,” Mr. Kushner said of his efforts to build out his investment firm. “We’re definitely not at the end. But we’re past the start-up phase.”

Jonathan Swan reported from Washington. Kate Kelly contributed reporting from Washington. Kitty Bennett contributed research.