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Antares, Part III

Greenwich Time concludes its reporting on the Antares Boyz today. It’s a nice compilation of things that many of us knew or had heard about already but put together in one convenient package. The most striking thing, perhaps, is how the Boyz got (temporarily) rich on “acquisition” and “management” fees without ever producing anything of value. There’s a totally politically incorrect expression for how the boy from the Bronx, Joe Beninati, acted when he found himself with cash buring a hole in his Brioni blazer’s pocket, but suffice it to say, he spent it with enthusiasm.

James Cabrera and Joseph Beninati made sure to reward themselves for their company’s apparent success. In return for a 25 percent stake, Antares quietly received $40 million in 2006 from NorthStar Realty Finance Corp., a New York City-based company specializing in the acquisition of real estate debt and real estate securities, a confidante of the two men said.

Cabrera and Beninati were each said to have been paid $10 million, with the latter spending his share on a condo in Aspen, Colo., called The Little Nell and a development site in the Hamptons. Cabrera, always the more conservative of the two, used the money to pay off his Greenwich house.

Among NorthStar’s principals were David Hamamoto, who started the Whitehall Funds real estate group at Goldman Sachs, and Edward Scheetz, chief executive officer of Morgans Hotel Group.

Scheetz would get into the news for all the wrong reasons in September 2007, when he found his 24-year-old “girlfriend,” Michelle Hatchel, a former tanning salon worker from Colorado, dead in his Turnberry Towers condo in Las Vegas.

“She’s stiff. She’s stiff, and she’s turning funny colors,” Scheetz, a married father of two from Greenwich, said in a panicked 911 call.

Hatchel’s death was ruled an accidental overdose from cocaine and oxycodone, and Scheetz was not charged with a crime. Still, he would eventually resign his executive post at the luxury hotel chain.

Then there’s this, concerning the New Mexico State pension fund, which is rather amusing, if you aren’t a New Mexico state pensioner:

In 2005, New Mexico started up a limited liability company with what is now NorthStar Realty Finance Corp., investing $55 million in taxpayer money that NorthStar infused into various real estate developments in its portfolio, including Antares, said Charles Wollmann, a spokesman for the State Investment Council.

“I do believe that investment went south,” Wollmann said.

New Mexico received a devastating $16 million capital return on its initial investment, which had seen its net asset value tank to $12.8 million as of the end of the first quarter of 2009, the most recent performance report available from the state.

“That’s not one that we’re happy with,” Wollmann said.

In summary, here’s a tip on selecting people to invest with: if the principals who want your money had to attend “13th grade” at Choate in order to get into college, and later boast that they “attended Choate” without disclosing that they were there as participants in Choate’s “Diploma for Rich Dummies” program, put a hand firmly on your wallet and run, do not walk, away from them.

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