Private equity firm Quadrangle Group, which is gearing up to raise a new fund, is exploring options which could include selling a minority stake in itself and gaining an anchor tenant for its fund, two sources familiar with the matter said recently..
Quadrangle, a media-focused firm, is in discussions with boutique bank Evercore Partners to get advice about possible paths, those sources said.
Another option is that Quadrangle just goes ahead with efforts to raise the new fund, one of the sources said. All options will be considered, which could potentially see it consider a sale, though that may not be likely, that source said.
Other private equity firms have gone down similar routes. Silver Lake, for example, in 2008 sold a minority stake to state pension fund California Public Employees’ Retirement System—also an investor in Silver Lake’s funds.
“As we have said previously, Quadrangle is focused on the process of preparing for our next fund-raising,” a spokesman for Quadrangle said in a statement given over the phone. “We will be exploring a broad range of options during this process including the use of advisers and the possibility of securing a significant anchor investor in the new fund.”
Quadrangle declined to comment further. Evercore also declined to comment.
Quadrangle in April settled a long-running pay-to-play probe that had been hanging over it, paving the way for it to start raising a new fund.
The firm has largely invested its $2 billion second fund, which it finished raising in 2005, and had put plans for a fresh fund on hold during the turmoil.
That probe still dogs its departed co-founder Steve Rattner, who left Quadrangle in 2009 to run U.S. President Barack Obama’s auto bailout task force, a post he left a few months later to return to private life.
Investors had the right after Rattner quit to halt new investments by its existing fund. New York City and state pension funds indeed voted to block new investments, but despite that, Quadrangle won the overall vote of confidence from investors, a source said at the time.
Quadrangle has investments in companies such as teleconferencing firm West Corp., Spanish cable operator Ono, Canadian wireless firm Mobilicity and it has a small investment in motion picture company Metro-Goldwyn-Mayer.
One of its investments, electronic security company Protection One, recently agreed to be bought by private equity firm GTCR for $392 million. Quadrangle has a large shareholding in Protection One.
The Financial Times, citing people familiar with the matter, reported recently that Quadrangle was exploring its options. —Megan Davies, Reuters