(Bloomberg) -- Just blocks from London’s luxurious Harrods department store sits an office that’s a key cog in an Iranian oil kingpin’s financial empire.
The building at 180 Brompton Road is one of the main outposts for Ocean Leonid Investments, a hedge fund overseen by Hossein Shamkhani, the secretive commodities trader whose network is an influential player in both Iran and Russia, according to more than a dozen people familiar with the matter and documents seen by Bloomberg.
Ocean Leonid, which was incorporated in the UK in June 2022, also operates from offices in Geneva, Dubai and Singapore. It is known in finance circles as a proprietary firm focused on the energy sector.
In recent years, the fund hired a slew of commodity trading veterans with CVs spanning the likes of Gunvor Group, Koch Industries and Citadel. Its website describes the business as a multi-strategy platform that cuts across all commodity sectors, leaving open the prospect of taking on “external clients in the future.” While the industry itself has historically been opaque, Ocean Leonid stood out from many competitors in that the identity of its backer has long been a matter of mystery.
The fund’s role in Shamkhani’s empire is the latest installment of a year-long Bloomberg investigation that’s involved interviews with several dozen people familiar with companies in his orbit as well as a review of confidential documents and corporate records.
While there’s no suggestion Ocean Leonid broke any rules or engaged in wrongdoing, the firm’s presence in London is notable given the UK’s attention on sanctioned oil exports in general and Shamkhani in particular. That’s part of a broader push by officials in Washington and London to target those they suspect of sidestepping oil-trading restrictions.
Managing a portfolio on behalf of Shamkhani worth hundreds of millions of dollars, Ocean Leonid prioritizes futures and options bets on a range of securities spanning oil, gas and metals, said four of the people, who have direct knowledge of the matter and requested anonymity citing fear of reprisal. The fund receives its capital via oil firms overseen by Shamkhani that then route the money through shell companies before getting deposited into accounts accessible by Ocean Leonid, the people said.
While Shamkhani has no official role at the firm, the most senior leaders listed for Ocean Leonid in corporate filings regularly discuss the company’s trading strategy with him, according to four of the people.
Western Lenders
The business benefits from the market insights of a principal — Shamkhani himself — who is mostly based in Dubai and has significant control over the oil flows of two OPEC+ nations. Western lenders have also provided support to Ocean Leonid. JPMorgan Chase & Co., ABN Amro Bank NV and Marex Group Plc are among the brokers to offer the firm leverage, a standard service provided by banks, the people said.
Representatives of JPMorgan, ABN Amro and Marex declined to comment.
In some ways, Ocean Leonid plays the role of a family office, people with knowledge of the operation said. It provides the Iranian national with a pot of money that can be deployed easily around Europe and the rest of the world.
Luigi Spagna, an Italian director at the fund’s London business, has been there since its incorporation, UK Companies House records show. He’s also listed as director of M&A at Milavous Group, according to data compiled by Clodura.AI, a platform that collates employee information on thousands of companies.
A Bloomberg investigation revealed in August that Shamkhani effectively oversees an intertwined web of companies, with Milavous as one of the parent firms.
A spokesman for Ocean Leonid said the company categorically rejects the allegation that Hossein Shamkhani is involved in or oversees the firm. He said the ownership of all Ocean Leonid entities is held entirely through ISFAD Fund LP in the Dubai International Financial Centre and that it’s managed by Gateway Investment Management Services. All LP investors into the Fund are onboarded and managed by Gateway, which conducts extensive know your client checks, according to the spokesman. He said Ocean Leonid doesn’t know the identities of its investors and it’s not the firm’s role to check the source or history of funds into ISFAD.
Gateway said that, as a regulated company, it can’t comment on third-party matters.
Shamkhani and Spagna didn’t respond to requests for comment. Shamkhani’s lawyer told Bloomberg News on multiple occasions that his client was assembling a team to provide responses about Ocean Leonid but ultimately never shared anything.
READ: Secretive Trader ‘Hector’ Seen as Global Kingpin for Iranian Oil
Founded in 2018 within the DIFC, Ocean Leonid now boasts a global staff with several dozen employees.
Timely Bets
Assets under management climbed thanks to timely bets on oil, coal and Bitcoin but have also dipped dramatically at times when Shamkhani withdrew funds, according to people with direct knowledge of the matter. In the past two calendar years, Ocean Leonid produced double-digit returns, reaching a high of about 30% in 2022, the people said. That coincided with boom years across the commodities industry.
“Our legacy is etched in profits and its positive impact on the entire trading ecosystem,” Ocean Leonid says on its website, which makes no reference to its leadership team.
Apart from Spagna, another top executive is Mahdiyar Zare Mojtahedi, according to corporate filings in the UK and United Arab Emirates as well as people with direct knowledge of the matter.
Records from UK Companies House list Zare as having Dominican nationality. He was the London entity’s officer from its incorporation through November 2023. People with direct knowledge of the matter said Zare remains a senior leader within the firm, though colleagues widely know him as Liam.
Archives from Iran’s Official Gazette show a person named Mahdiyar Zare Mojtahedi — the identical spelling seen in UK filings — as the former general manager of a state-owned petrochemicals firm that’s controlled by Iran’s Ministry of Defense and Armed Forces Logistics. Shamkhani’s father, Ali, led that agency for nearly a decade preceding Zare’s tenure at the company.
In response to questions, a UAE official said by email that the country is committed to its responsibilities to protect the integrity of the global financial system.
A State Department spokesperson said Washington’s extensive sanctions on Iran remain in place and the Biden administration will continue to enforce them.
Spokespeople for the UK and Dubai governments declined to comment, while the DIFC and Zare didn’t respond to requests for comment.
Dubai Skyscraper
Ocean Leonid’s UK filings show Isfad Fund LP, based on the 21st floor of Dubai’s ICD Brookfield Place, as the entity with significant control. DIFC records show that’s the same prestigious tower that’s home to Milavous on the 38th floor. The range of entities underscore how easy it can be to obscure business ownership, shareholdings and control information, with different executives formally registered as owners and managers.
As is the case at Milavous, many Ocean Leonid employees simply refer to Shamkhani by his first initial “H,” people with direct knowledge of the matter said.
In the DIFC, records list Spagna as Ocean Leonid’s director and Oenergy Commodities DMCC as the fund’s shareholder.
In London, ex-Noble Group trader Irene Perdomo and Leonardo Marroni, a former GLG Partners portfolio manager, rank among the hedge fund’s prominent figures. Meantime, Diab Al-Kudairi, a veteran of Gunvor and Koch, has been a point person in Switzerland, handling important banking relationships, some of the people said.
Perdomo’s LinkedIn page shows her as the co-head of systematic strategies at the company. Marroni and Al-Kudairi’s LinkedIns don’t mention their work at the firm, though a UK-based charity still lists Marroni as Ocean Leonid’s co-head of systematic strategies.
Perdomo, Marroni, Al-Kudairi and DMCC declined to comment.
Senior Departures
In the past few months, there’s been greater staff turnover at Ocean Leonid.
Many employees, who weren’t informed of the company’s ownership prior to joining, grew uneasy when they later learned about Shamkhani’s role, according to people with direct knowledge of the matter. Some also cited unusual requests at times to trade higher volumes without a clear investment thesis, the people said.
Several executives who helped steer Ocean Leonid to lofty returns over the last several years, including chief investment officer Yves Demasure — a veteran of BNP Paribas SA, Standard Chartered Plc and Lukoil-owned Litasco SA — and chief risk officer Tung Chong — who previously worked at Morgan Stanley, UBS Group AG and Citadel — are among recent departures, the people said.
Demasure declined to comment. His LinkedIn no longer references his employment with Ocean Leonid. Chong didn’t respond to requests for comment.
--With assistance from Yongchang Chin, Serene Cheong, Archie Hunter and Cagan Koc.
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