Infra fund investigates its placement agent

An infrastructure firm called Emerald Infrastructure, raising a €750m fund, has told the SEC it is checking to see if its placement agent paid any external marketers.

Emerald Infrastructure Development Fund is investigating whether Shelbourne Securities, the placement agent it is using for its €750 million fundraising, paid anyone else in connection with the marketing of the fund.

Emerald revealed in a Form D filing with the US Securities and Exchange Commission that it is paying Shelbourne $1.5 million in relation to $75 million the firm has so far raised for the fund. Emerald’s fund will target infrastructure opportunities in Northern Ireland.

“2% commissions are payable to Shelbourne Securities (including [firm principal] William Howell). The manager is trying to determine if those persons paid or intend to pay any other persons in respect of the offering,” Emerald said in the filing, adding the filing may be amended “when more facts are available”. William Howell is registered with the Financial Industry Regulatory Authority as a broker with Shelbourne.

The entire $75 million came from the New York City pension system, controlled by city Comptroller Bill Thompson. Howell also is reportedly a friend of New York City comptroller Bill Thompson. Last year, Thompson announced that four New York City pension funds overseen by his office would invest $150 million in the fund. A press release from the Comptroller’s office hailed it as “the largest ever public investment from the United States in Northern Ireland”.

It's unclear why Emerald only has $75 million despite the $150 million commitment announced by Thompson last year.

A recent article in the New York Daily News reveals that people affiliated with Shelbourne donated more than $60,000 to Thompson’s campaign for mayor of New York City.

Shelbourne has been caught up in New York Attorney General Andrew Cuomo’s investigation of a pay-to-play scheme involving the New York State Common Retirement Fund. The firm has not been accused of wrongdoing.

In April, Cuomo charged former leader of the New York Liberal Party Raymond Harding with receiving $800,000 in sham finder’s fees. The complaint alleged that $500,000 of the $800,000 came from a person affiliated with Shelbourne Securities.

In May, the Village Voice, a New York City newspaper, reported that Howell had helped arrange three investments for the city’s pension system in the last year and shared fees with other placement agents on millions of other investments in private equity funds. The article also said Howell is a friend of Thompson.

Shelbourne Securities did not return a message seeking comment before press time.

The Emerald Infrastructure Development Fund is managed by Emerald Development Managers, a firm set up in 2008 as a successor to venture capital firm Cohen & Company, according to fundraising database InfrastructureConnect.

The fund will target alternative energy, waste management, property development and conventional energy investments in Northern Ireland, according to InfrastructureConnect.

Neil Cohen, a New York-based executive officer at the fund, declined comment, citing SEC regulations.

Christopher Witkowsky contributed to this article.