A genuine interest in Jay-Z or just a bum rap? Crypto kid Edward Craven settles on ‘ghost’ mansion

Melbourne’s David Koadlow is a sophisticated investor with eclectic tastes, apparently – with an affidavit claiming he pitched an investment linked to US rapper Jay-Z. Picture: Mike Coppola/Getty Images

Who knew the Smorgon family were such fans of Jay-Z? By that, we mean his venture capital outfit, not his music – but two things can be true at once.

Readers of this column would know of our interest in the case of Melbourne investor David Koadlow and his attempts to recover $12m from Magnolia Capital, a firm run by Mitchell Atkins until it was shut down in late July with a trail of legal matters in its wake.

Koadlow alleges that Atkins used his funds to clear a set of margin calls in contravention of their investment agreement, among a trove of other alleged misdeeds.

Until now, we haven’t heard much out of Atkins by way of a response, but a fresh affidavit to the Federal Court, signed on September 13 and released this week, gives a hint at how he plans to defend himself.

There’s also the matter of how Koadlow, a 71-year-old businessman with impeccable contacts and a reputation to keep, came to entrust such a large sum of money to this 27-year-old from the NSW central coast who seemed an unfamiliar quantity in the cloistered realm of funds management.

Atkins’ affidavit suggests they were introduced in 2019 and worked “in a loose sense” on a couple of stray transactions, but otherwise the relationship was “primarily social”. He claims to have looked up to Koadlow as “an adviser and experienced professional”.

Fast-forward to March of 2021 and they were sitting across from each other at Melbourne’s Osteria Ilaria restaurant where, apparently, it was the older man trying to push deals on the millennial – not the other way around as Koadlow has claimed.

US rapper and entrepreneur Jay-Z with his superstar wife, Beyonce.

“He (Koadlow) used the lunch to pitch an investment to me in Marcy Venture Partners, which the Smorgon family (of which Mr Koadlow is a member by marriage) were investing via their family office,” the affidavit says.

Marcy Venture Partners is the VC enterprise co-founded by Jay-Z, with investments that include Avaline, a vegan wine brand founded by Cameron Diaz and entrepreneur Katherine Power, and Gemini, a cryptocurrency platform founded by Tyler and Cameron Winklevoss.

Atkins’ affidavit continues: “I recall Mr Koadlow being particularly excited about the opportunity to invest in that investment as it was a fund associated with the US rapper Jay-Z. During this lunch, Mr Koadlow phoned … (a consultant to Magnolia Group) to discuss the Jay-Z opportunity and Mr Koadlow’s capacity to invest.”

Suffice it to say, Koadlow’s recollection of this encounter contains none of these details, with his affidavit referring mostly to Atkins’ pitch that they establish a joint fund and management company controlled by Magnolia.

Koadlow would go on to hand over millions of dollars to Atkins for investment in this joint fund, as well as a microcap fund, all of which he has been seeking to have returned since April, when he claims to have learned that Atkins was using the money to trade outside of their agreed terms.

“Mr Koadlow was well aware of what he was investing in,” Atkins said in his statement. “He was a sophisticated investor. He understood the risks and obtained legal advice before investing in the microcap fund.”  

Jumping ship

The first boardroom victims have begun floating to the surface after the merger of crypto exchange Swyftx and fledgling share trading platform Superhero.

No seat available for former ASIC chairman James Shipton, who joined Superhero as a director in May before signing off last month once the merger was sealed. That would make his tenure one of the shortest NED careers in recent memory. It also ends his only post-ASIC corporate gig.

Former ASIC chairman James Shipton. Picture: Aaron Francis

Similarly, gone is barrister and former Zip chair Philip Crutchfield KC, who had been around quite a bit longer at Superhero than Shipton, having joined as an early investor and director in 2019.

Crutchfield, it just so happens, was also part of the legal team that Shipton pulled together during the expenses scandal that contributed to ending his career at the corporate regulator. He stepped aside even though he was cleared of wrongdoing. 

Toorak toffs

Pocket change, really. Crypto kid Edward Craven has settled his record-breaking purchase of Toorak’s “ghost” mansion by signing over $80m without any mortgage required.

Title documents show Craven, co-founder of Stake.com, one of the world’s biggest cryptocurrency casinos, finalised the deal using a company called Woodford Property Investment and Management Pty Ltd.

His father, James Craven, is its sole director, secretary and shareholder. Those with long memories might remember that he was banned as a company director, jailed for a year and bankrupted over his involvement in the 1989 collapse of the Spedley group of companies – that was before his 27-year-old son was even born.

The St Georges Road, Toorak “Ghost Mansion”. Picture: Jake Nowakowski

Not that the Toorak mansion is habitable, yet. Hoyts founder Leon Fink, chairman of Fink Group, began construction at the site but left it unfinished for nigh on three decades. The plan, apparently, is to push over the abandoned dwelling and replace it with an architectural masterpiece.

Meanwhile, in Portsea, retired Melbourne businessman Wallace Cameron is having another crack at selling his estate after an unsuccessful campaign early last year.

He bought the pile for $6.3m in 2008, and we hear that he now wants between $9.4m and $10.2m for the holiday spread.

Dom caught short

Anyone remember what happened to that promised construction of the John Howard Hall?

Even NSW Premier Dominic Perrottet seems to have lost track of the project, despite signing off the funding in the first place. The plan was to build the hall at Canterbury Boys’ High School, where the former PM once honed his debating chops.

Announced in 2020, construction was due to start this year and finish by now but that commencement date has been pushed back until 2023, as most people in the area would know.

Not the premier. Perrottet seems to think it’s almost time for a ribbon cutting, letting this slip in parliament during a brief and vulnerable moment when he let his guard down to the opposition.

Former PM John Howard was to have had a hall built in his honour. Picture: Gary Ramage

Interrupted by a quip from Labor’s Sophie Cotsis, whose electorate takes in the school, Perrottet broke off mid-reply to a question and inquired of Cotsis, in genuinely earnest tones, “How’s John Howard Hall going? Good?”, apparently unaware of the delays.

The chamber fell silent, and Cotsis replied: “It’s been two years and you guys haven’t started yet.” Cue much laughter and lots of stammering from Perrottet, as well as the sight of an amused Attorney-General, Mark Speakman, who had to exert all 43 muscles to try to keep a straight face.

Was this yet another alleged example of underdelivering on school infrastructure? Perrottet wasn’t having it. “You love it,” he told the opposition, waving off their jeers. “Get out of the way.”