GB & Partners advertises itself with the confident claim that they ensure ‘the safety as well as the highest possible return on the funds we manage for our investors’.

However, it seems that the managers of this largely state-funded company, whose majority owner is a businessman close to the governing party Fidesz, are also keen to create a luxury for themselves.

Internal documents obtained by Direkt36 reveal that this venture capital and private equity firm considered renting expensive sports cars and engaged in loan transactions whose main beneficiaries were the owners themselves.

There are documents about the rental of a brand new Porsche 911 sports car for €1247 (HUF 500 000) plus VAT per month, and other luxury cars, such as a Mercedes SUV.

It is not clear whether the company specifically rented the cars. Although the documents we have in our possession include draft contracts for the renting of the cars mentioned above and a board document approving the rent of Porsche and Mercedes cars. GB & Partners claims that these transactions did not ultimately take place. When we told the company that we had a photograph of the Mercedes SUV in question parked on the property of the majority owner of the company, they replied that they considered it ‘an invasion of privacy’ to take such photographs.

According to the documents, GB & Partners also frequently conducted loan deals that were favorable to the owners. The firm regularly provides large loans, sometimes worth hundreds of millions of forints, to companies linked to its owners. The loans include some with very favorable interest rates and some with no interest whatsoever, and the repayment deadlines are repeatedly extended.

Meanwhile, GB & Partners has had several failed investments in recent years. On several occasions it has invested its funds in companies that have subsequently become insolvent, sold at below cost or gone into liquidation. The money invested, which the investor, mainly the State, entrusted to the fund manager, was lost or only parts of it were recovered.

Ágoston Gubicza, the majority owner of the company, which mainly manages state funds, has a decades-long relationship with Fidesz, the party led by Prime Minister Viktor Orbán. Gubicza initially played a political role in the party and since 2014 has been a major player in the venture capital business of the state. They first entrusted him with a portion of the partly EU-provided Jeremie funds and then with the management of the funds of Eximbank, then part of the Ministry of Foreign Affairs. Gubicza also has personal ties to Antal Rogán, Minister for the Prime Minister’s Cabinet Office, since he married Rogán’s first wife in 2011 and became the stepfather of the minister’s eldest child.

GB & Partners said that it ‘has always acted with the utmost care and prudence, and no controlling body or investor has ever found any reason to object’. This contradicts the fact that the Hungarian National Bank found several irregularities at the company during an investigation in 2018 and imposed a fine on the firm.

The company also stated that the assets of the fund manager are separate from the funds, i.e. the money that investors have entrusted to it. It therefore considered that it was wrong to suggest that “the loan transactions between the Fund Manager and its owners, or the Fund Manager’s fleet of vehicles, have any connection with the assets of the funds that are managed by the Fund Manager”. Meanwhile, GB & Partners’ own documents show that the firm’s revenues are primarily derived from the management fees of the funds entrusted to it. But when a public entity invests funds derived from taxpayers’ money, the related management fees are ultimately paid by the people.

They took over the business from a banker

Equity funds should be imagined as a big pile of money lying around waiting to be invested. It is the fund manager who decides what that investment should be. The aim is to invest the money in companies that will later be successful and profitable. The fund manager will receive a management fee for the work done and usually a success fee at the end of each fund’s life.

GB & Partners – or its predecessor under a different name – was bought in 2014 by Ágoston Gubicza and his then partner, Mihály Boris, from a formerly well-connected banker with government connections, István Töröcskei. The company was then already managing billions of Hungarian forints of partly state-linked funds (through the so-called Jeremie programme, whose mismanagement we have previously reported on).

The fund manager is currently owned by Ágoston Gubicza and Tamás Petheő through their companies. Petheő is a well-known national figure in Hungarian sailing and a board member of the Balatonfüredi Yacht Club.

Porsche, Mercedes, BMW

Several documents have come to our attention which reveal that GB & Partners planned to rent high-value, in several cases brand new and high-performance sports cars from its shareholder, Matchmaker Capital Kft., owned by Tamás Petheő.

There are several documents about the rental of a 450 hp black Porsche 911 TARGA 4S. This car is truly in the luxury class: it is equipped with a wealth of comfort features, accelerates to 100 km/h in 3.6 seconds and can reach speeds of up to 304 km/h. According to the 2020 press release which was published after the model was launched, the price of this sports car started at €158 616 (HUF 55.6 million).

The Porsche 911 Targa 4S in the manufacturer’s advertisement

There are also documents on the rental of a grey Mercedes-Benz GLS 580 4MATIC. The seven-seater, hybrid-powered urban luxury car with a huge size is currently priced at around 55-60 million HUF. This car is also four-wheel drive, like the Porsche.

We have two sets of documents on these transactions. On the one hand, there are the draft rental contracts, which set the rental price for both cars at €1247 (HUF 500,000) per month plus VAT. We also have a board of directors document stating that the company’s general meeting approved these rentals.

There were also papers about the rental of a Mercedes urban SUV

However, GB & Partners claimed, in response to repeated questions, that they had not rented either the Mercedes SUV or the Porsche. They stressed that the documents do not yet allow us to conclude that ‘the business transaction in question did take place’.

The Mercedes SUV was, however, seen by our colleague parked in the yard of the garden house of Ágoston Gubicza and his wife in Buda. We reported this to the company, indicating that we had a photograph of the car parked there, but they did not explain why the vehicle was there if it had not been rented. Instead, they said

‘the owners of GB & Partners Zrt. are not public figures, so any unauthorised intrusion into their private sphere, taking photographs at their residence and making them public […] will result in immediate legal action’ on their part.

Among the draft contracts is one for the rental of a BMW 530e iPerformance, an upper mid-range business limousine for €499 (HUF 200,000) per month plus VAT. The rental of this car has also been approved by the company’s general meeting, according to a board document in our possession. The basic price of this type of car started at €52 673 (HUF 16,4 million) when it was launched. Among the draft contracts for the vehicles, dated 2020-2022, we also found documents for a BMW X5 (the base price of which starts at just under €83 743 (HUF 32 million), a BMW 530i XDrive and two Škoda Superb 3Ts.

Our colleague saw one of the Škoda Superbs parked in the underground car park of the fund manager’s office building.

When contacted, GB & Partners said that it had not rented a car from Matchmaker Capital Ltd. for several years. The latter company, when contacted, said that it was a car rental company and had been renting new and used cars to the fund manager for years.

In other car transactions, there are also indications that GB & Partners was doing business with its owner. Among the internal documents obtained by Direkt36 is one according to which the fund manager planned to buy a Mercedes 221 S500 leased from Agustin Consulting Trading and Services Ltd. Agustin Consulting is owned by Ágoston Gubicza, so GB & Partners planned to buy the car from its owner.

When asked, GB & Partners admitted that the 11-year-old vehicle is owned and used by the fund manager.

Cheap loans

It was not only when renting or buying cars that the fund manager made deals with its owners.

In several cases, the company has granted interest-free or very favorable (2 percent) loans to its owners for millions of forints. Some of these loans were then regularly extended in maturity, even by years from the original date.

Although intra-group loan transactions are quite common in the business world, according to a financial expert interviewed by Direkt36, who asked for anonymity, interest-free loans are very rare even in this environment. As for interest-bearing loans granted by the fund manager, the expert said that loans granted between 2017 and 2021 are still at an acceptable level, as they are usually adjusted to the interest rate of the central bank and even increased above it. However, according to the documents in our possession, some of the loans granted to owners had interest rates well below the base rate at the time of disbursement.

The most common beneficiaries of the loans are the two shareholders of the fund manager, GB Capital Partners, owned by Ágoston Gubicza, and Matchmaker Capital, owned by Tamás Petheő.

According to the fund manager’s publicly available financial statements, in 2018 GB Capital received an interest-free loan of €31 360 (HUF 10 million) maturing in 2021, which was later amended to 2023. In 2020, the same company received an interest-bearing loan of €640 715 (HUF 225 million).

The fund manager’s latest publicly available report for 2023 still includes an interest-free loan of €31 360 (HUF 10 million), this time with a repayment deadline of end-May 2026. In addition, in current exchange rate €931 908 (HUF 375 million) is shown as an interest-bearing loan, also maturing in May 2026. (The public accounts do not show the interest rate, so it is not known what percentage it is.)

According to the board and other internal documents obtained by Direkt36, Matchmaker also received three loans from the fund manager in 2023 with an interest rate of 2 percent, totaling €96 871 (HUF 37 million). During the period the loan was disbursed, the base rate of the central bank was between 12.25 and 13 percent. The loans to Matchmaker have also been subject to several repayment deferrals. For example, there is an interest-free loan of HUF 4 million, the maturity of which has been postponed by five years compared to the original agreement.

All three companies concerned – the fund manager and the two companies receiving the loans – have stated that the movement of funds between a company and its owners in the form of loans, or the modification or extension of such contracts for any reason, is permitted by law and that the interest rate is freely determined by the parties in compliance with the law. The companies added that all economic transactions between GB & Partners and its owners were carried out accordingly.

The Hungarian National Bank had objections

An audit of GB & Partners carried out by the Hungarian National Bank (MNB) in 2018, also found problems related to, among other things, ownership concentration. The central bank complained that GB & Partners had contracted various services, such as ‘intermediation’ and ‘decision support’, with companies that were owned by the fund manager’s owners or their relatives.

According to the 2018 investigation, such work was contracted with Privacent Kft., owned by Tamás Petheő, and Augustin Consulting, one of whose owners was Ágoston Gubicza, as well as with a company whose majority owner was a close relative of Mihály Boris, who still indirectly owned a stake in GB & Partners for part of the period under investigation.

The MNB found that this ‘created a conflict of interest’ because the owners and managers of the fund manager were both in a role in which they decided on the funds’ investments, while their companies were also involved as service providers in the process.

The Hungarian National Bank has issued a decision warning GB & Partners, inter alia, to ensure full compliance with the legal requirements on conflict-of-interest situations. The MNB also criticized the fact that the fund manager did not always comply with its reporting obligations, or did so after the deadline, and that its general ledger statements and its balance of accounts were not always fully consistent with each other.

The investigation also revealed that the same person was responsible for the accounting and internal audit during the period under review and could not therefore control his own work. According to the MNB, the fund manager had not yet selected an external expert to carry out the audit at the time of the investigation, leaving the accounting activity without internal control.

The decision also shows that the fund manager disputed the MNB’s comments on several points, but generally took note of them and informed the central bank of various plans for solutions and immediate measures. Regarding the management of conflict-of-interest situations, it noted that it had started a review of its internal processes with the help of an external consultant and indicated that it was willing to refine them, if necessary, ‘to avoid such similar situations in the future’.

The MNB took note of the information provided by the fund manager on its future actions but maintained its own findings and ordered the fund manager to pay a supervisory fine of €10 666 ( HUF 3.4 million).

GB & Partners told Direkt36 that this was the first MNB investigation since the company was founded and that the fine imposed was extremely low. They stressed that the warnings contained in the MNB’s decision regarding conflict-of-interest situations and internal audit activities are only warnings, and that the fine was in fact imposed for late compliance with reporting obligations.

The above is contradicted by the fact that in the explanatory memorandum of the document published publicly on the fund manager’s website, the MNB also mentions the infringements found in relation to conflicts of interest and internal control activities, in addition to the late fulfilment of the reporting obligations, as grounds for the fine.

‘As a fund manager, GB & Partners Zrt. carries out its activities with the highest possible degree of prudence and in maximum compliance with the relevant rules and MNB regulations’, GB & Partners wrote to us in its response.

We also contacted Mihály Boris with our questions about the investigation, but his reply also stipulated that we could not quote him. We have not been able to contact the company of his close relative. According to publicly available records, the company was wound up in liquidation in 2022.

Tamás Petheő, the co-owner of the fund manager, said that Privacent, which he previously owned, had had no revenues for years and was closed in 2021. ‘In addition, we are not at liberty to comment on the alleged findings of an investigation conducted by the Hungarian National Bank at our business partner 7 years ago,’ he added.

Successes and missteps

Although GB & Partners advertises on its website that ‘all projects have to go through a very thorough and detailed selection process’, according to the documents in our possession, it seems that they have managed to get it wrong several times in recent years.

According to its website, the fund manager has invested in more than 55 companies, so-called portfolio companies.

Perhaps the best known of GB & Partners’ portfolio companies is Nanushka. The fund manager regularly communicates about the success of the fashion brand, but the company has been loss-making in three of its five financial years since 2023. In 2023, for example, it had net sales of €18 065 191 (HUF 6.9 billion ) and an after-tax profit of minus €8 639 874 (HUF 3.3 billion). In its most recent financial report, Nanushka explained the decline by the war in Ukraine and changing consumer habits due to the Covid epidemic.

In response to our inquiry, Péter Baldaszti, co-owner and CEO of Nanushka, wrote, among other things, that the financial indicators from the Nanushka International Zrt. report are not complete because the Nanushka Group has several foreign subsidiaries on three continents, and these subsidiaries are not currently consolidated in the published report.

Baldaszti added that the company should be profitable again by the second half of 2025 and that international demand for the brand has not declined but has increased spectacularly.

There are other well-known and successful companies in GB & Partners’ portfolio. Although recent – 2022 – Exclusive Change, a currency exchange group, seems to be a successful investment. According to the company’s most recent data, it ended the year with net sales of €13 614 374 (HUF 5.2 billion) in 2023, with a 2023 after-tax profit of over €2 618 143 (HUF 1 billion).

However, the fund manager has several failed investments.

In the company’s own risk management reports for 2020 and 2021, obtained by Direkt36, it was repeatedly reported that a number of companies in their portfolio have been in a difficult liquidity situation in recent years. In several cases, companies have been liquidated or wound up. These failures were explained in the reports by the failure to achieve the objectives set, and the company’s operations became redundant. The sums invested in these companies were therefore not recovered.

One of the failed investments was Minibrake Ltd, which was engaged in the production of remote-controlled emergency brakes for children’s bicycles and received a $40 million investment in 2013. In 2019, it was liquidated because its only contract partner suspended the performance of the contract, thus rendering its operations redundant. Minibrake Ltd. could not be reached.

In relation to its investments, GB & Partners highlighted that it has no obligations about their operational management. They stressed that in their 10 years of operation, they had invested in around 60 companies, with an estimated value of (in current exchange rate) €186 289 120 (HUF 75 billion). The investments are operating companies which currently employ more than 1 100 people, according to the company.

According to the fund manager, it is a misconception that a large number of the investments of the funds it manages are in liquidation, although this does happen due to industry specificities, typically for early-stage (e.g. start-up) investments. The fund manager also pointed out that venture capital investments are complex, medium to long-term investments, and that it does not believe that the accounting performance of venture capital investments in selected years reflects the current and future value of the investment.

Masters of public billions

According to the GB & Partners website, they currently manage five funds with a total registered capital of nearly €250 million (HUF 80 billion). Of these, four are clearly partly or wholly state-owned, with some of the funds provided by the state-owned Eximbank and the state-owned company MFB Invest through various equity funds.

Although the website currently describes the management of the five funds, the two EU-linked Jeremie funds have a maturity date of 2023, according to publicly available data. We have asked GB & Partners about the status of the Jeremie funds but have not received a reply.

The fund’s majority owner, Ágoston Gubicza, has long-standing links with Fidesz and government circles. In the early 2000s, in the first Orbán government, he played a political role on the staff of a minister, and during his business ventures he also worked for Lajos Simicska’s company Közgép, which for a long time controlled the Fidesz economic backbone. After 2010, he also had a private relationship with one of the party’s main figures. In 2011, he married Antal Rogán’s first wife and became the foster father of one of Rogán’s children. Rogán has since become a minister.

Gubicza’s business breakthrough came in 2014 with the public venture capital business. That’s when he took over GB & Partners, which had previously been one of the big winners of the Jeremie venture capital programme, which was mainly funded by public and EU funds. Through the programme, the company secured the right to manage €27 826 372 (HUF 8.6 billion) of capital. As Direkt36 has previously revealed, that GB & Partners subsequently made a number of investment decisions to provide funds to investors in the funds they managed and to businesses linked to their own environment.

The fund manager was then given the right to manage new funds, and the state entrusted them with the capital of the then Eximbank funds, which belonged to the Ministry of Foreign Affairs, amounting to €51629 557 (HUF 16 billion). According to an earlier article in Forbes, the firm took on the task in exchange for a management fee of 2.45 percent and a success fee of 30 percent above 8 percent yield.

Several sources familiar with the decision-making process told Direkt36 earlier that GB & Partners’ success was to be expected. According to one of them, Gubicza had visited the bank several times in 2015 to discuss equity funds. According to the source, the owner of GB & Partners also met at the bank with András Puskás, who ‘took the fate of the tender to heart’ and was an old acquaintance of Antal Rogán and deputy mayor of the V. district.

Index, which was independent of the government at the time, reported in 2019 that Eximbank had secretly entrusted GB & Partners with the management of an additional €122 944 521(HUF 40 billion) that year, after raising that amount of capital in one of their funds.