On the 8th November 2018, Carole Cadwalladr claimed that Jim Mellon had been an investor in Russian diamonds. This claim is based on the fact that Charlemagne Capital had invested in Alrosa.
Jim Mellon was one of the founders of Charlemagne Capital, but does that make him an "investor in Russian diamonds"?
What is Alrosa?
Alrosa is a Russian diamond mining company.
What is Charlmagne Capital?
Charlemagne Capital (now Fiera Capital) was an asset management company, mainly focussed on investing in frontier and emerging markets. It's role was to manage funds for investors who wanted exposure to emerging markets.
Charlemagne's investment in Alrosa
In 2016, the OCCO Eastern European fund, managed by Charlemagne Capital invested in Alrosa.
This follows an earlier investment in Alrosa by the fund, in 2013. Many major global investors also invested in Alrosa, including a fund owned and run by George Soros.
What does Jim Mellon have to do with Charlemagne Capital?
Mellon was one of the founders of Charlemagne Capital.
What was Jim Mellon's role in the management of the various funds that Charlemagne Capital oversaw?
None, at the time of Charlemagne's investment in Alrosa. A spokesman for Mellon said:
Mr. Mellon was not involved in or aware of the 2016 investment in Alrosa, which investment was not made by Charlemagne Capital itself but by one of the funds managed by a Charlemagne Capital investment manager (the OCCO Eastern European Fund). The investment manager’s decision to invest in the fund would have been consistent with his/her mandate and input from analysts, who alone have sole responsibility in the investment process. Mr. Mellon himself (as indeed the rest of the Charlemagne Capital board) would not have been, and was not, involved in any of these processes.
The following diagram explains Mellon's investment relationship to Charlemagne Capital.
Did Charlemagne's investment have anything to do with Brexit?
Charlemagne first invested in Alrosa in 2013, this was well before a referendum on the UK's membership of the EU was even announced.
Did Jim Mellon invest in Alrosa?
No, Mellon did not invest in Alrosa. A fund managed by Charlemagne Capital invested in Alrosa, once in 2013, and again in 2016. The funds invested were assets under management by Charlemagne. The primary beneficiaries of any potential upside to this investment would have been those who had invested in the relevant funds.