Oregon examines spyware investment amid controversy French Sky News Mexican Israeli London


The future ownership of an Israeli spyware company whose proceeds have been used to hack the cell phones of journalists, human rights defenders and possibly even heads of state is on hold.

Major investors in a private equity firm that owns a majority stake in NSO Group, the maker of spyware Pegasus, are discussing what to do next. The Oregon State Employee Pension Fund is one of the biggest investors, if not the biggest, having invested $ 233 million in the private equity firm Novalpina Capital in 2017.

Novalpina Capital is grappling with both an internal dispute between its founding partners and an explosive report showing that NSO Group’s spyware has been widely misused around the world.

Oregon State Treasury spokeswoman Rachel Wray told The Associated Press in an email Wednesday that the department was getting involved. State officials have previously said investors have limited say in private equity investments once they are completed.

“I can confirm that, in accordance with our fiduciary obligations to Oregon beneficiaries, and with other limited partners, (Oregon State) Treasury is involved in discussions relating to our investment in Novalpina,” Wray said Wednesday.

The move comes amid a serious disagreement between the three co-founders of London-based Novalpina Capital, which, according to British press reports, led investors to withdraw control of the fund after concluding that relations between the three had deteriorated so badly that they could no longer work together.

Sky News reported that the dispute concerns the future deployment of Novalpina’s € 1 billion ($ 1.18 million) fund.

In addition to these internal conflicts, a survey released in July by the global media consortium Forbidden Stories showed that at least 180 journalists from around the world have been selected as targets by clients of the NSO Group. In a case highlighted by the Guardian, Mexican journalist Cecilio Pineda Birto was assassinated in 2017 weeks after his cell phone number appeared on a leaked list of more than 50,000 cell phone numbers.

French President Emmanuel Macron is one of many world leaders who may have been targeted using spyware capable of checking emails and other data on a cell phone and turning on his microphone and phones. cameras.

NSO Group has denied ever having kept “a list of potential targets, past or existing.” In a separate statement, he called the Forbidden Stories report “full of flawed assumptions and unsubstantiated theories.”

The company insists that it only sells to “approved government agencies” for use against terrorists and serious criminals and that it has no visibility into its customer data. Critics have provided evidence that NSO directly handles high-tech espionage.

Oregon State Treasurer Tobias Read, who serves as the state’s chief investment officer, “is following and (is) concerned about the reports regarding Novalpina and the NSO Group,” Wray said.

Wray said she could not go into details of discussions between Novalpina’s investors due to confidentiality restrictions and Oregon’s obligations as a limited partner. Read declined an interview request.

Oregon was Novalpina’s first major investor. Stephen Peel and Stefan Kowski, two founding partners of Novalpina Capital, showed up at the Oregon treasury offices in the Portland suburb of Tigard in November 2017 to make a presentation to the Oregon Investment Council, which oversees the state’s $ 90 billion pension fund.

“As investors, we assume we have to go against the grain,” Peel told the board. “We have to find offers that other people don’t see or don’t want to make for various reasons.”

The Oregon Investment Council unanimously approved a commitment of $ 233 million. Later, the Alaska Permanent Fund Corporation and the South Yorkshire Pensions Authority in England invested $ 59 million and $ 33 million, respectively.

In 2019, Novalpina Capital and the founders of NSO Group acquired a controlling stake in NSO Group from another private equity firm, Francisco Partners, in which the Oregon pension fund had previously invested.

Novalpina’s biggest investors are now considering choosing Berkeley Research Group to replace Novalpina, the Financial Times reported. If named, the California-based global consultancy would be given a mandate to repay investor money by selling the three companies Novalpina owns, including NSO, at the highest possible price, the London newspaper said.

The Berkeley Research Group did not respond to a request for comment. The group’s website says it “helps leading organizations move forward in three key areas: litigation and investigations, corporate finance, and performance improvement.”

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