On March 2, this publication revealed the messy truth behind Katina Stefanova’s hedge fund, Marto Capital.

The story ended with former Bridgewater Associates executive Stefanova and her COO, Adam Bochenek, claiming that a wealthy individual had sunk more than $1 billion into the struggling hedge fund. They refused to name the investor, or provide on-the-record evidence, or give the precise amount in interviews, citing fears of market competition. When pressed for proof, Marto’s COO presented a financial document bearing the company name and showing a massive single deposit over $1 billion. I wasn’t allowed to take the document with me or make notes. “I don’t want to talk specifics,” Stefanova said in the February 18 interview, which she refused to allow to be recorded. “The best thing for us right now is to stay under the radar.”



Marto’s original three big-name investors had pulled their money out over the previous year. Marto had shrunk from about $235 million firmwide in April 2019 to just $10 million to $20 million in its once-flagship systematic product by year-end, according to confidential records and a former employee’s estimate.



But now Marto was back and bigger than ever, the founder claimed.

“I’m very grateful for our investors, but funds of funds are not very stable,” Stefanova asserted. Marto had pivoted to focusing on “customized investment solutions” and getting money from family offices, she said. Thanks mostly to the one whale of an investor, “We’re at peak assets under management now,” she said.

Readers latched on instantly: That $1 billion-plus investment didn’t add up.

“It sounds incredible. Almost unbelievable.”

Harvard-educated lawyer and hedge fund money-raiser Evan Katz has never come across a personal investor (a so-called family office) sinking upward of $1 billion into a firm of Marto’s size. And he’s been doing this a long time.

Katz is one of a dozen industry experts — hedge fund fundraisers, staff investors to the ultra-rich, traders, regulatory consultants, family office authorities, former Marto employees, and investors who’ve evaluated Marto — whom I consulted about the firm’s anonymous $1 billion-plus investor. To a person, they are deeply skeptical that it’s real.

The investment chief for one billionaire replied via text: “Zero percent chance.” And then he sent a clip from the canonical 1994 film Dumb and Dumber, in which Jim Carrey’s character, Lloyd, asks a woman wildly out of his league on a date:



Lloyd: What are my chances?

Mary: Not good.

Lloyd: Do you mean not good like . . . one out of a hundred?

Mary: I’d say more like one out of a million.

Lloyd: . . . So you’re telling me there’s a chance. Yeah!

The sheer size of the claimed investment explains why it rouses so much suspicion among industry veterans. As Katz says, “Out of the universe of family offices, there are very few in the multibillion-dollar range.” (Katz, founder of Crawford Ventures, boasts of working with many of them.) “That narrows the universe greatly. Family offices, like any other sophisticated investor, are only giving a) a certain percentage of their assets to alternatives, b) a subset of that to hedge funds, and c) only a certain percentage of that to any particular fund.”

A typical super-rich family office might put, at most, 10 to 20 percent of its money into hedge funds, split among perhaps 20 managers, according to Katz. For an investor to give Marto more than $1 billion, that suggests he or she has between $100 billion and $400 billion to spread around. “You can probably count on one hand” how many people like that exist, Katz says. “It’s certainly hard to prove the negative, but it would be extraordinarily unlikely.”



If Marto attracted one whale from the handful that exist, there’s the next factor: Investors don’t want to represent more than about 10 to 20 percent of a given firm’s money, Katz points out. Being the only big client is risky.

The CEO of a network for ultra-wealthy investors concurred. “In 13 years, meeting 2,500 family offices face to face while running 140 live events in the Family Office Club and having helped start 100 family offices,” wrote Richard Wilson, “I have never once heard of a family office investing $1 billion-plus into one single fund at one time.”

Nevertheless, Marto’s leadership claims the big investor eyed and talked to the firm for about a year before taking the plunge this January. During that time, Marto’s other big clients and many senior staffers pulled out. Assets under management fell; returns suffered over the summer; Marto shed employees.

And yet, with all that going on, one of the richest people in the world looked at Marto and decided that, out of every investment firm in existence, that’s where he or she would place upward of $1 billion? That was Stefanova’s story. If correct, it’s seriously impressive. If not, serious questions need to be answered.

The email arrived just an hour after Institutional Investor published the original story. “Funny that they are managing $1 billion and aren’t registered . . . .”



Marto Capital terminated its registration with the Securities and Exchange Commission as of February 18, the regulator’s website shows.

That was the same day Stefanova sat for our original interview. In it, she admitted to a history of personal trading violations at Bridgewater but said the scrutiny was sexist, and trumpeted Marto’s new $1 billion-plus investment but didn’t want to talk about it. She did not, however, reveal that Marto had that very day relinquished the legal authority to run outside money.

If what Stefanova, COO Bochenek, and sales chief Marcus Asante told me about the supposed new investment is true, Marto “is not in compliance,” suggests Yulia Kalk, who has worked in regulatory compliance since 1996. “The fact that the money came into their account and they’re not showing up as a registered investment adviser would be of big concern. It’s shocking that they showed this to you.” According to Kalk, and every other expert consulted, investment firms are not allowed to manage $1 billion of other people’s money without the regulator’s stamp.

“This page tells us that she is either not managing the $1 billion through this company or she’s noncompliant,” says Kalk, COO and director of broker-dealer services at Gordian Compliance Solutions, after reviewing Marto’s investment adviser termination disclosure. If the money is real and invested in Marto, as the firm’s leaders claimed on multiple occasions, Marto would have had to disclose the material change in assets within five days and upgrade its old status from “exempt reporting adviser” (a lower tier for firms with less than $150 million in outside money) to full registration. Long past the allowable disclosure window, Marto produced a financial statement for me showing that the firm received the money in January.

“Is this coming from offshore?” Kalk wonders. “If so, who is the owner? It’s not easy to get ahold of one transfer of $1 billion,” especially for a fund that’s only registered to manage up to $150 million. “People — like institutions — that invest even $100 million, they do serious due diligence on the investment adviser. We help our clients go through the diligence process, and those processes are no joke,” says Kalk. “It is intense.” According to Kalk, any legitimate investor of that scale would not simply wire more than a billion dollars without checking SEC registration.

Other possibilities? The family office is real, but he or she hired Stefanova and others as employees without investing in Marto. Or the money went into some non-Marto vehicle, whose primary place of business isn’t Marto’s office and whose SEC-registered leaders don’t include Stefanova. Or Marto is violating the rules out of sloppiness, not intent, like Stefanova claims she did at Bridgewater.

Or they made it up.

“Putting my Harvard lawyer hat on,” says Katz, who never really takes it off, “if someone told me they got a $1 billion investment and, for whatever reason — legit or not — they don’t want to tell me who the investor is, I’d ask: Who are the auditors? There’s no reason why you shouldn’t have a call with the auditors.” That type of third-party verification happens often in the secretive world of super-rich investors. Stefanova “could easily have the auditors confirm that this did happen or not. Or the prime broker could confirm it. The fund administrator could confirm it. If it’s true, why not?”

Whether or not the money exists is an objective fact, Katz points out.

“If the auditor, administrator, or prime broker wouldn’t verify that within 24 to 48 hours, then you’ve got the answer.”

So I asked. And what followed was such a bizarre, convoluted series of events that it would leave even the most seasoned reporter spinning their head.

“May I confirm the $1 billion-plus family office investment in Marto with your firm’s auditor, administrator, or custodian? Please let me know by 2 p.m. tomorrow,” I wrote to Stefanova on March 24.

The response came not from Stefanova or Marto’s auditors, administrators, or custody bankers, but rather from an apparently newly retained public relations firm. Steve Bruce of ASC Advisors ran interference for days: Why was I asking? What was I working on? In an email days after the deadline for their response elapsed, his patience ran out:

“You sat with a senior executive of Marto and watched him log on to a secure major bank portal and print out a copy of the custody statement of that brokerage account under Marto’s name . . . what more could you need to verify the existence of the assets?”

I needed to hear it from a third party directly, I told him, but after days of delay — including a suggestion that I come to an in-person meeting in New York City during the height of the Covid-19 pandemic — it became clear that Marto was not going to allow that to happen.

And so I pressed: Taking Bruce and Marto’s leaders at their word from earlier interviews, Marto had the money and a family office paid the firm “pretty similar to standard hedge fund fees” to manage it. Marto wasn’t merely a consultant, and no one else could count these assets under their control. So how could Marto be managing outside money after terminating its ability to do so legally?

That’s when Marto’s lawyers got involved.

“Ms. Stefanova has determined that she will no longer cooperate or deal directly with Ms. Orr,” Michael Ledley wrote in a cease-and-desist letter — the second of three Institutional Investor has received from Marto.

“The recent substantial private investment was not a limited partnership interest in the hedge fund, and that going forward Marto Capital would be focusing on direct capital investments and strategic partnerships,” Ledley wrote in a letter demanding that I cease and desist from reporting on the firm. “Accordingly, Marto Capital is not subject to SEC registration requirements. See, e.g., 15 U.S. Code § 80b–2(11).”

He reiterated that “Ms. Stefanova will not respond to, or engage with, Ms. Orr.”

I returned to Katz with the argument that advisory work on direct deals isn’t SEC regulated. Katz called his outside counsel — proving that in any tussle, the lawyers do always win.

“I just spent a thousand bucks quadruple-checking my understanding,” Katz said. “Here’s the situation: If you are located in New York” — as Marto is — “and you are completely deregistered” — again, like Marto — “it means you have less than $25 million in assets, whether in a fund or separately managed accounts. If someone is getting paid even on direct investments, that is an investment adviser.”

Katz pointed me to exactly the same section of code that Marto’s lawyer did, when he argued that Marto isn’t under SEC purview.

Naturally, I took all of this back to Stefanova. Once again, her response came via her lawyer: “Marto Capital is a private company and has no obligation to disclose the details of its business or relationships. Marto Capital is fully compliant with all legal and regulatory requirements. Any statement or implication to the contrary is baseless and premised on incomplete and/or inaccurate information.”

Would Marto please explain how it can manage more than $1 billion of someone else’s money without reporting to the SEC?

Marto will not.

Libel lawyer is one of Katz’s prior professional hats. He reviewed the escalating back-and-forth wrought by my attempt to carry out his advice and get proper verification of the claimed whale investment.

Hypothetically, he noted archly, “someone won’t provide third-party verification; they threaten to sue you on no grounds; they say they don’t have to be registered when they absolutely do, even to manage $25 million, much less $1 billion. I’m shaking my head. If it walks like a duck, quacks like a duck, looks like a duck . . . it’s probably a duck.”

And not, say, a whale.