We have seen this story play out before.
Russian fund manager and entrepreneur, German Lillevyali, who is – or was – President of GL Financial Group, a Swiss- and U.K.-licensed asset manager with branches in Moscow, Zurich, Geneva, London, Cyprus, and Belize, has disappeared without a trace. The professional investors who according to Bloomberg had $250 million under management at the end of last fiscal year, may have disappeared to Cyprus or some other Russia-friendly jurisdiction.
A recent Facebook post under the name of “German Lillevyali” attempted to soothe a group of investors who had concerns about GL Financial Group’s solvency.
“I promise you the money is safe,” it said. “I will return it personally, there is nothing to worry about. Please send me a personal message if you want more information,” the Facebook post read.
The flagship company of the group is GL Asset Management. It appears that Lillevyali lured in investors with promises of high returns and a fancy description of his “market-neutral” fund — deploying “state-of-the-art mathematical models and algorithms” to trade international equity markets. In other words, someone who pretended to be a quant but wasn’t.
“GL Asset Management specialises in market-neutral investing and are known for a precise and rigorous approach to developing and managing innovative investment strategies. By deploying state-of-the-art mathematical models and algorithms, combined with active management, we offer our clients the opportunity to invest in liquid, equity-trading portfolios that are designed to grow and preserve their wealth while minimizing risk,” the ‘About us’ section on LinkedIn read.
The goal of the fund was “to grow and preserve their [investors] wealth while minimizing risk,” however, today the case is precisely the opposite.
According to Bloomberg, GL Financial investors around the globe are trying to redeem their money even as GL employees resign en masse. The company’s website domain has been shut down, offices closed, and even phone lines have gone dead. Some of the disgruntled clients include an executive who works for billionaire Oleg Deripaska, high ranking managers at Swiss drugmaker Novartis AG, San Francisco-based Levi Strauss & Co., and even FIFA soccer stars.