LDS investments exposed to FTX fraud
Posted: Wed Jan 04, 2023 10:34 pm
Don't ask how I know this, but the church's Ensign Peak has been investing in Sequoia's venture funds for many years. Thanks in large part to a couple of senior people at Sequoia who are also LDS.
As a result, while the losses to the church are small in absolute terms, it is a certainty that church investments were impacted by the FTX fraud.
For background, Sequoia was one of FTX's most prominent investors. Partners claimed to have done extensive diligence on FTX before investing, which we now know was, at best, self-deception. The whole business was fraudulently transferring customer deposits over to a separate crypto-fund called Alameda, effectively taking customer funds and using them to speculate. This is not only illegal, but the magnitude makes FTX one of the largest financial frauds in history.
The WSJ article below says $150 million of Sequoia investments were wiped out in the FTX bankruptcy. Sequoia management actually held a call with investors to apologize! One wonders who from Ensign Peak was on that call.
I recall seeing elsewhere that the total losses to Sequoia were over $200 million... whatever.
https://www.wsj.com/articles/sequoia-ca ... 1669144914
Regardless of the relative triviality of this loss (likely single digit millions of dollars to the church) compared with over $150 billion in secretive Ensign Peak investments, it is a sobering reminder that even the "best" and "safest" money managers sometimes are fooled and sometimes they are fooled worst by fooling themselves.
As a result, while the losses to the church are small in absolute terms, it is a certainty that church investments were impacted by the FTX fraud.
For background, Sequoia was one of FTX's most prominent investors. Partners claimed to have done extensive diligence on FTX before investing, which we now know was, at best, self-deception. The whole business was fraudulently transferring customer deposits over to a separate crypto-fund called Alameda, effectively taking customer funds and using them to speculate. This is not only illegal, but the magnitude makes FTX one of the largest financial frauds in history.
The WSJ article below says $150 million of Sequoia investments were wiped out in the FTX bankruptcy. Sequoia management actually held a call with investors to apologize! One wonders who from Ensign Peak was on that call.
I recall seeing elsewhere that the total losses to Sequoia were over $200 million... whatever.
https://www.wsj.com/articles/sequoia-ca ... 1669144914
Regardless of the relative triviality of this loss (likely single digit millions of dollars to the church) compared with over $150 billion in secretive Ensign Peak investments, it is a sobering reminder that even the "best" and "safest" money managers sometimes are fooled and sometimes they are fooled worst by fooling themselves.
