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Administrator to René Benko’s property holding company tells creditors he has received €8.6bn of claims

Signa Holding, the central company of René Benko’s collapsing luxury property empire, is facing €3.5bn more in claims from creditors than previously disclosed, its administrator has said.

Christof Stapf, who took control of Signa Holding last week after a restructuring by management failed, told creditors that in total 302 parties had listed outstanding debts of more than €8.6bn.

The company’s management said in its insolvency filing on November 29 that they expected claims totalling about €5.1bn.

The claims lodged include €713mn from the UAE’s Mubadala and €279mn from Qatar’s AM1, and €1.6bn that other Signa group entities said was transferred to the central holding company in the run-up to its collapse.

Presenting his findings to creditors in Vienna on Monday lunchtime, Stapf said he intended to dispute almost all of the debts, according to a readout of the meeting seen by the Financial Times.

In particular, he said he would refuse to recognise the claims made by other Signa group entities.

Those include the two other holding companies Signa Development and Signa Prime. Management at the two companies are rushing to monetise assets to pay off their own lenders.

Stapf’s decision is likely to greatly complicate their efforts, but shows the extent to which Signa’s sprawling corporate network has begun to pit different shareholders and creditor groups against each other.

Signa Development transferred hundreds of millions in cash to other Signa entities in the past year, which the company’s management said at the time were “ordinary . . . business cash management operations”.

Creditors have been left dumbfounded at the absence of cash on its balance sheet despite large asset sales in the past year. The FT reported last week that the company also transferred more than €300mn to non-Signa group entities controlled by Benko’s family foundation.

“Co-ordination with the other insolvency administrators of the Signa group in the form of a cross-group steering committee was not possible due to the different interests, despite considerable efforts by the insolvency administrator of the holding company,” Stapf told creditors on Monday.

Signa’s total debt — spread across an unconsolidated network of more than 1,000 companies built up over the past decade by Benko — remains unknown, but Stapf’s disclosures will fuel concerns among creditors that it may be significantly larger than anticipated.

Analysts at JPMorgan estimated Signa entities owed a total of €13bn in November.

Co-head of investment bank and trading business calls time on almost three-decade career at firm

Goldman Sachs’ Jim Esposito, one of chief executive David Solomon’s top lieutenants, is leaving the Wall Street firm in a surprise departure. 

Solomon told staff in a memo on Monday that 56-year-old Esposito, known to colleagues as “Espo”, was leaving the bank after almost three decades. He was most recently co-head of Goldman’s flagship investment banking and trading business. 

“On a personal note, I am grateful for Jim’s counsel, friendship and sense of humour during our many years of collaboration,” wrote Solomon in the memo seen by the Financial Times. 

Esposito was made one of three co-heads of Goldman’s investment banking and trading division, alongside Ashok Varadhan and Dan Dees, after the two businesses were merged in 2022. The unit, which will now be run by Varadhan and Dees, generated about two-thirds of Goldman’s revenues last year. 

Esposito’s is the latest high-profile departure in recent years, amid a series of reorganisations and strategic changes at the bank.

Esposito was viewed internally as one of a number of candidates who could be in the running to take over from Solomon, who has led the bank since late 2018, although bank president John Waldron is considered the leading contender. 

Solomon’s leadership style was the subject of internal criticism last year and there was speculation over how long he could keep his position at the bank. However the FT reported in August that he retained the backing of Goldman’s board of directors. He stands to earn a special stock award if he remains at the bank until 2026. 

Esposito joined Goldman in 1995 as a salesperson in its emerging markets debt business and was made a partner in 2006. He had previously been co-head of both Goldman’s investment banking and trading divisions when they were standalone businesses.

“Espo was an individual that led the firm through some difficult times. He was a positive influence, a mentor to many, a top notch professional and his leadership will be missed,” Ricardo Mora, former Goldman partner who retired from the firm last year, told the FT. 

Esposito has been one of Solomon’s most powerful deputies and played a major role in combining the investment banking and trading businesses.

But he was also one of a number of people inside Goldman who was sceptical about the firm’s retail banking ambitions, according to two people familiar with the matter. Solomon ultimately pared back the consumer banking business.

In the memo to employees, Solomon said that Esposito had “decided to retire from Goldman Sachs” but would become a senior director.

It’s too late, Gary, now it’s too late

“And it’s too late, Baby, now it’s too late.” As Carole King sings in her iconic 1971 hit, sometimes you take too long to fix a situation and the damage is done. “Something inside has died, and I can’t hide and I just can’t fake it.”

Last week the US Securities and Exchange Commission issued final rules for special purpose acquisition companies (Spacs). A Spac is a blank-cheque vehicle that offers private companies an alternative route to a stock exchange listing. Once the Spac raises money, its sponsors have usually two years to combine it with an operating company.

The new SEC rules are long and detailed, but the basic gist is to align the procedures for initial public offerings (IPOs) with mergers of companies with listed Spacs (aka “de-Spacs”). The key features are:

According to SEC Chair Gary Gensler, the rules “will strengthen protections for investors in [Spacs].” 

To be sure, the rules could have strengthened investor protections if they had been issued in a timely manner. But now? Three years after Peak Spac Frenzy? When the Spac market is catatonically kaput?

With the new Spac rules, the SEC is closing the barn door long after the horses have bolted. And those fleeing horses weren’t always thoroughbreds and stallions. A fair number of donkeys romped on to the Elysian Fields of the equity capital markets, too, leaving a pile of stinky manure in investor portfolios.

It’s easy to forget the scale and intensity of Spac-mania. The number of Spac IPOs rose more than tenfold from 59 in 2019 to 613 in 2021, with proceeds soaring from $12 billion to $162 billion, as markets got high on a Covid-era cocktail of central bank stimulants and fiscal amphetamines. Everyone was getting into the act of sponsoring Spacs: private equity firms, venture capitalists, entrepreneurs, dealmakers, gurus, sports stars, influencers, celebrities. Spacs accounted for 63 per cent of all IPOs in the US in 2021.

Inevitably, there was some sloppiness and even more sharp practice. Given their 20 per cent “promote”, Spac sponsors could make a lot of money from merging with an even a poorly-performing target company, and so they had a strong incentive to puff up the prospects of their proposed business combinations. And the rules for going public via a de-Spac have until now meant you could get away with “outlandish” projections in a way you couldn’t when listing via the normal IPO route.

The Spac craze crescendoed in early 2021, and it has been carnage ever since. Share prices of de-Spac’d companies have collapsed amid missed forecasts, nosebleed valuations, overhyped expectations, wayward execution, and even bankruptcies. Some early Spac promoters walked away with windfall profits, but chastened investors have responded in kind: over the past two years the vast majority — often 90 per cent or more — of Spac shares were redeemed for cash in lieu of being tendered in the de-Spac proposal. This has either made it impossible to take the target operating company public via the Spac or forced the target to reverse into an empty listed shell with almost no cash, assets or free float. 

And what about investment banks? They were feasting on chunky fees from these deals. But in early 2022 the bulge-bracket firms were spooked by the hint of liability — and the reputational risk — from associating with de-Spac’d companies whose shares were cratering dramatically. As a result, they pulled back from advising and underwriting these transactions, and by mid-2022 the Spac market had ground to a halt.

And yet only now has the SEC issued 581 pages of rules to regulate Spacs. It’s too late, baby.

SEC Chair Gensler is correct that there’s no good reason to hold de-Spacs to a lower disclosure standard than IPOs, since they both involve listing new companies on the stock exchange. However, after incurring huge losses, the market had already — if belatedly — taken action to address the disparity in treatment by shutting down de-Spacs as a viable channel for going public. 

The SEC has its reasons for taking so long. It’s complicated to issue regulations already on top of a complex code, and the agency is required to jump through a lot of procedural hoops, such as giving notice and considering public comments. And the SEC has been busy working out its framework for crypto and ESG, among other pursuits.

But the agency’s tardiness shows that regulation often addresses the problems of the past well after the fact. It can take a long time — and a lot of damage — before watchdogs rouse themselves to close gaps, loopholes and inconsistencies in their rules. Until then, highly interested parties have the time and space to (legally) exploit these lacunae, potentially at the expense of the parties who are supposed to be protected. It’s often up to the market to resolve these issues well before the regulators can get around to it.

If and when Spacs return, the market will likely demand structural enhancements, including more money in escrow and more stringent share price performance benchmarks before sponsors can get paid their promote. Those tougher terms will put off the flakier folks from promoting a Spac. In short, the self-healing medicine of the market will go down quicker than 581 pages of rulemaking.

CQS founder Michael Hintze is expected to relaunch his flagship hedge fund at new firm Deltroit Asset Management in March having agreed the sale of the $13.5bn CQS credit platform and the CQS brand to Manulife Investment Management in November last year, according to a report by Bloomberg.

The report cites people with knowledge of the matter as confirming that the new fund will have about $2bn in assets when it begins trading. Its predecessor, Hintze’s CQS Directional Opportunities fund – which was excluded from the Manulife sale – had around $1.2bn in assets, according to a December investor letter seen by Bloomberg, with the additional funds reportedly coming from “related investment mandates”.

According to one of Bloomberg’s sources, Hintze plans to use portfolio management technology and data platform Coremont, a spinout from Brevan Howard Asset Management, to help run the fund, which lost almost 35% (about $1bn) in 2020, but has still managed to make money every year since, including a 6.7% gain in 2023.

The name of Hintze’s new firm comes from a property he owns in his native Australia, Deltroit Station, a 2,500-hectare (6,178-acre) farmland estate that has previously played host to British royalty.

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