The Vatican is investigating how $200m in Swiss bank accounts controlled by its central administrator ended up financing a luxury property development in London’s Chelsea district that generated large profits for a company that managed the investment for the Holy See.

The project to construct 49 luxury apartments at 60 Sloane Avenue has become the focus of an investigation by Vatican police into the financial activities of the Holy See’s Secretariat of State, the custodian of millions of dollars in charity given by Catholics around the world, according to multiple people familiar with the probe.

This month, Vatican police seized documents and computers from the Secretariat in search of evidence about the project and suspended five employees pending the results of its investigation.

The Vatican became involved in the Chelsea project in 2014 when $200m held in Swiss bank accounts controlled by the Secretariat of State was transferred to a Luxembourg investment fund called Athena Capital.

Athena is owned by the Italian London-based financier Raffaele Mincione through his company WRM. Athena had bought the Chelsea building for £129m in 2012 and then sold a minority stake in the project in 2014 to a fund it managed on behalf of the Vatican as a sole client.

In 2018, the Vatican bought out the remaining equity in 60 Sloane Avenue from Athena. Mr Mincione’s vehicle earned around £130m from the project overall.

The Vatican declined to comment about its ownership of the London building, or confirm the subject of the raids on the offices of the Secretariat.

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Mr Mincione worked for nearly 20 years at various investment banks, mostly in London in fixed income and derivatives, before starting WRM as a family office in 2009. Since 2011, he has bought large equity stakes in several small Italian banks, including Banca Carige.

People familiar with the deal said that the Holy See’s investment with Mr Mincione was personally authorised by Cardinal Giovanni Angelo Becciu, who met the London-based financier inside the Vatican.

60 Sloane Avenue in Chelsea, London, photographed on October 13, 2019.
The current building at 60 Sloane Avenue in Chelsea © Tolga Akmen/FT

Cardinal Becciu was at the time in charge of the administrative duties of the Secretary of State, and reported on a daily basis to Pope Benedict, and later Pope Francis. Cardinal Becciu, through his office, declined to comment.

WRM said that it could not comment on the Vatican probe. It said: “We have no inside knowledge of these investigations or the circumstances that led to them. We are secure and confident in the knowledge that no wrongdoing or improprieties were conducted by the WRM group or any of its companies.”

It said the Vatican Secretariat had been constantly kept updated of its investment in the Athena fund through its private bankers Credit Suisse and all of its transactions and accounts had been audited. Credit Suisse declined to comment.

Athena Capital first purchased 60 Sloane Avenue in 2012 for £129m with a £75m mortgage from Deutsche Bank that was later refinanced with a £100m loan from hedge fund Cheyne Capital.

In November last year, the Vatican Secretariat sent an official to London to meet Athena Capital and negotiated the buyout of the fund’s 55 per cent stake in the building at 60 Sloane Avenue.

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After a complicated asset swap that involved the Holy See transferring £40m to Athena as well as other assets owned by Athena on its behalf, the Vatican took control of the property. In addition, it has taken over the £100m debt attached to the project.

The $200m originally invested by the Secretariat with Athena in 2014 was worth around £128m at exchange rates at the time. If that is added to the £40m paid to Athena in 2018, the Vatican ended up buying Mr Mincione’s equity in the Chelsea building for £168m.

That would mean Mr Mincione made a £128m profit after the £40m he originally invested in 2012.

WRM said that the profits it made by selling a minority stake in Mr Mincione’s building to the Secretariat in 2014 were based on an independent valuation conducted by CBRE, and that the value of the building had sharply appreciated along with other prime London real estate from 2012 to 2014.

Cheyne Capital declined to comment. There is no evidence to suggest that Cheyne Capital, which acted as a third-party lender, is involved in the Vatican’s investigation into the property deal.



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