GIC asks to pull some cash from fund with large exposure to bankrupt First Brands

NEW YORK - Singapore’s sovereign wealth fund GIC asked to pull some cash from a Jefferies Financial Group fund with large exposure to bankrupt First Brands Group, according to sources familiar with the matter.

GIC has been in talks to redeem some of its funds invested with Point Bonita Capital in recent weeks, said the sources. Point Bonita, a unit of Jefferies’ Leucadia Asset Management, had about a quarter of its US$3 billion (S$3.9 billion) trade-finance portfolio invested in First Brands-related receivables.

Spokespeople for GIC and Jefferies declined to comment.
 

Late on Oct 12, Jefferies said in a statement that following the discovery of the issues at First Brands, Leucadia communicated directly with Point Bonita fund investors and agreed it made sense for them to submit redemption requests to give them maximum flexibility as the fund worked through the circumstances.

Redemption requests become effective on Dec 31, Jefferies said. That will lead to four quarterly, pro rata redemption payments, with the last one due in October 2026, the statement said.

Jefferies, which advised First Brands for more than a decade as it raised debt in the private credit market, also defended its dealings with the auto parts supplier, saying that the bank was not aware of any fraudulent activity and that its exposure to the company was small.

The

 and subprime auto lender Tricolor Holdings has raised fears of stress in the private credit market.

First Brands filed for bankruptcy in late September after the company used private credit to run up debt of more than US$10 billion. Tricolor Holdings did the same in early September amid allegations of auto loan fraud.

Jefferies has US$43 million, or 5.9 per cent, invested in Point Bonita’s accounts receivables purchased from First Brands, the statement said.

First Brands filed for bankruptcy in late September after the company used private credit to run up debt of more than US$10 billion. Tricolor Holdings did the same in early September amid allegations of auto loan fraud.

Jefferies has US$43 million, or 5.9 per cent, invested in Point Bonita’s accounts receivables purchased from First Brands, the statement said.