Meet the secretive Kazakh company backing the Upper West Side’s latest skyscraper

Meridian Capital Limited was founded by oligarchs investing billions globally, including in Extell’s 50 West 66th St.

Party Girl once went by a dif­fer­ent name.

The 205-foot, eight-cab­in yacht once belonged to Askar Alshinbayev, a Kazakh ener­gy and bank­ing tycoon who sold it in 2016. Alshinbayev, accord­ing to yacht enthu­si­ast web­site SuperYachtFan, had giv­en the ves­sel a less provoca­tive moniker: Meridian.

More inter­est­ing than the ves­sel itself is the inspi­ra­tion for its name, pri­vate equi­ty fund Meridian Capital Limited. The Bermuda-incor­po­rat­ed enti­ty, with oper­a­tions in London and Hong Kong, is linked to some of Kazakhstan’s wealth­i­est indi­vid­u­als and has invest­ed in min­ing, oil, and infra­struc­ture projects across the globe. It was also behind Russia’s largest ever real estate deal in 2012, sell­ing a shop­ping mall in St. Petersburg to Morgan Stanley for $1.1 billion.

Another notable invest­ment for Meridian: Its bet on Gary Barnett’s Extell Development.

According to an analy­sis of prop­er­ty records by The Real Deal, Meridian has invest­ed more than $200 mil­lion into Extell’s lat­est New York real estate projects. The rela­tion­ship appears to have start­ed in 2011. That year, Barnett acquired a site at 16–18 West 57th Street, and a Meridian-linked enti­ty called “Bremsten Finance” assumed the developer’s $65.5 mil­lion mort­gage. The same year, Meridian acquired the debt on Barnett’s devel­op­ment site at 3 West 46th Street, a $10.3 mil­lion loan orig­i­nal­ly held by Anglo-Irish Bank, as well as the $19.3 mil­lion in debt on Barnett’s 570 Fifth Avenue just around the cor­ner, city records show.

Last September, TRD report­ed Meridian, through its Hong Kong-based divi­sion, took a $127 mil­lion equi­ty posi­tion in Extell’s con­do tow­er at 50 West 66th Street. The deal not only made Meridian one of Extell’s biggest known equi­ty investors, it also appears to be the biggest known Kazakh invest­ment in New York real estate. Real Capital Analytics, which tracks glob­al cap­i­tal flows in the real estate indus­try, doesn’t even have any U.S. com­mer­cial real estate invest­ments from the Central Asian nation in its cur­rent data­base, the com­pa­ny said.

It’s a lit­tle bit unusu­al from the point that it’s one invest­ment of that size [$100 mil­lion plus], but there are plen­ty of Kazakh investors invest­ing all over the United States,” said Ed Mermelstein, a real estate attor­ney who has rep­re­sent­ed sev­er­al Kazakh clients in New York deals. “Maybe not $100 mil­lion at a time, but they’re mak­ing $5, $10, $20 mil­lion dol­lar [real estate] invest­ments all over the place.”

Extell did not respond to sev­er­al requests for com­ment for this sto­ry. The firm’s devel­op­ment part­ner on the 66th Street project, Sam Sidhu’s Megalith Capital, declined to com­ment. Representatives for Meridian could not be reached.

An oligarch labyrinth

At the time of the Meridian’s invest­ment in 50 West 66th last year, one of its investors—Sauat Mynbayev, the CEO of Kazakhstan’s pub­lic oil and gas com­pa­ny KazMunayGas and the country’s for­mer ener­gy minister—had just been exposed in the Paradise Papers, the mas­sive leak of off­shore finan­cial doc­u­ments from law firm Appleby. At first, Mynbayev denied being a share­hold­er in the firm, but lat­er admit­ted it, telling Radio Free Europe in November that “I declared my own­er­ship share in Meridian Capital in a tax dec­la­ra­tion, which I sub­mit­ted over many years, as a pub­lic offi­cial should do, and I have nev­er con­cealed this.”

Meridian has been so secre­tive about many of its oper­a­tions that it even refused to pro­vide Appleby key infor­ma­tion about its own­er­ship struc­ture, accord­ing to a report from the Organized Crime and Corruption Reporting Project (OCCRP). But the com­pa­ny has clear ties to a num­ber of oth­er Kazakh oligarchs.

U.K. reg­u­la­to­ry doc­u­ments filed last year sug­gest Meridian is con­trolled by yacht afi­ciona­do Alshinbayev — who Forbes placed among Kazakhstan’s 10 rich­est peo­ple in 2014 — along with two alum­ni from the country’s largest pri­vate bank, Kazkommertsbank: Yevgeniy Feld, who also made the Forbes list, and Nurzhan Subkhanberdin, one of the bank’s orig­i­nal founders and a report­ed friend of Kazakh President Nursultan Nazarbayev (a recent report states Subkhanberdin no longer owns any shares in the bank). As it hap­pens, the bank is set to merge with Halyk Bank, a com­pa­ny con­trolled by the president’s daugh­ter, Dinara.

Merdian,” fly­ing the flag of Bermuda, in Fort Lauderdale, FL in 2015. The boat is now called Party Girl. (Credit: ZipZapPower)

Many of Meridian’s invest­ments were backed by Kazkommertsbank, accord­ing to OCCRP. The finan­cial insti­tu­tion has required mul­ti­ple bailouts over the last few years, includ­ing a $7.5 bil­lion res­cue in 2017.

According to an email from a cen­tral bank offi­cial,” OCCRP report­ed, “when­ev­er a project failed, the bank own­ers and exec­u­tives — who were also Meridian’s own­ers — would dump the loss­es onto the bank’s bal­ance sheets.”

As for Mynbayev, he nego­ti­at­ed numer­ous oil and gas deals for the Kazakh state while Meridian increased its stakes in var­i­ous glob­al ener­gy assets — though he main­tains that the com­pa­ny made no deals with the gov­ern­ment while he was min­is­ter. While he owned 19 per­cent of Meridian in 2006, OCCRP could not deter­mine his cur­rent stake.

Clay Fuller, a for­eign pol­i­cy schol­ar who stud­ies dic­ta­tor­ships and cor­rup­tion at the American Enterprise Institute, con­sid­ers Kazakhstan a klep­toc­ra­cy. In such states, he said, “the struc­ture of rule is based on exchange of pri­vate goods amongst elites. So they bribe each oth­er off.” Kazakh investors have been caught up in mon­ey laun­der­ing law­suits impli­cat­ing major U.S. real estate projects devel­oped by the likes of the Trump Organization and the Chetrit Group.


Meridian’s invest­ment in New York real estate isn’t total­ly unex­pect­ed. In 2015, Kazakhstan’s pres­i­dent Nazarbayev host­ed a din­ner at the Four Seasons in Midtown with the heads of major U.S. pri­vate equi­ty firms such as KKR, Carlyle Group and Blackstone Group in atten­dance. His country’s sov­er­eign wealth fund was pre­pared to invest $93 bil­lion glob­al­ly, he announced there, includ­ing into real estate.

Kazakhstan’s over­tures to the West have come with a greater spot­light on its finan­cial and polit­i­cal mis­deeds. Mukhtar Ablyazov, a polit­i­cal rival of Nazarbayev, was sen­tenced in June to 20 years in prison in Kazakhstan (though he’s believed to be liv­ing in France). He was accused of embez­zling $6 bil­lion from BTA Bank (par­tial­ly owned by Kazkommertsbank) and is also under inves­ti­ga­tion for the 2004 mur­der of Kazakh banker Yerzhan Tatishev.

The scan­dal has made its way to American shores: In 2014, BTA Bank accusedAblyazov asso­ciate Viktor Khrapunov of laun­der­ing stolen cash into mil­lions of dol­lars of U.S., Middle East and European assets. A Financial Times inves­ti­ga­tion found that some of Khrapunov’s funds went toward the pur­chase of three con­dos at Trump Soho. (When lat­er asked if there was Kazakh mon­ey in the tow­er, President Trump said, “No idea. Really no idea.”)

sep­a­rate law­suit in 2015 alleged Ablyazov laun­dered mon­ey into the Chetrit Group’s Flatotel devel­op­ment at 135 West 52nd Street and Cabrini Medical Center at 227 East 19th Street. The suit has since been settled.

In response to some of the cor­rupt prac­tices, Nazarbayev launched an anti-cor­rup­tion cam­paign, which accord­ing to Kazakh news site Tengrinews, called for “rad­i­cal erad­i­ca­tion of legal nihilism in the soci­ety.” The pres­i­dent enlist­ed for­mer British Prime Minister Tony Blair to serve as a kind of lob­by­ist-advi­sor for the country’s Western pub­lic-rela­tions push, though he has since left the position.

Mermelstein believes con­cerns over cor­rup­tion and mon­ey laun­der­ing are large­ly politi­cized. Kazakhstan’s issues will become less of a con­cern for U.S. reg­u­la­to­ry author­i­ties, he believes, as the two coun­tries forge clos­er polit­i­cal and eco­nom­ic ties and trans­paren­cy increases.

Kazakhstan sev­er­al years ago aligned [itself] more with the United States and has been a very strong part­ner and pro­vid­ed an eco­nom­ic pipeline to the U.S.,” he said. “Those types of rela­tion­ships are what even­tu­al­ly tran­scends this issue of mon­ey laundering.”

The U.S. gov­ern­ment and Kazakhstan have indeed strength­ened ties in recent years. In January, Trump invit­ed Nazarbayev — who once won 98 per­cent of the vote in an elec­tion that was high­ly crit­i­cized by Western mon­i­tor groups — to the White House. Trump called the coun­try, which sup­ports nuclear non-pro­lif­er­a­tion, “a val­ued part­ner in our efforts to rid the Korean penin­su­la of nuclear weapons.”

On the whole, more Kazakh invest­ment in New York City real estate is expect­ed, said Petro Zinkovetsky, a real estate attor­ney who has worked with res­i­den­tial buy­ers from the coun­try. One of his clients recent­ly decid­ed to amass a com­mer­cial port­fo­lio, he said — the first such client he’s had with more on the mind than anoth­er stash pad in a sleek new con­do tower.

The dif­fer­ent thing about Kazakhstan from a lot of oth­er post-Soviet states is the gov­ern­ment com­pared to the oth­er republics in the region — Turkmenistan, Tajikistan, etc. — was very sta­ble,” Zinkovetsky said. “And I see the investors are get­ting a lot more sophis­ti­cat­ed when it comes to invest­ing in U.S. real estate than they were before.”

As far as Extell’s 66th Street project, not much else regard­ing Meridian’s rela­tion­ship with the devel­op­er is known. The project itself has come under crit­i­cism from City Council mem­ber Helen Rosenthal, who claims the devel­op­er mis­led the pub­lic about the tower’s scale. Originally filed with the Department of Buildings as a 262-foot build­ing, Extell acquired air rights and increased the planned height to 775 feet last fall.

By Will Parker

Meet the secre­tive Kazakh com­pa­ny back­ing the Upper West Side’s lat­est skyscraper