Quadrangle Group Suspends Fund-Raising

The Quadrangle Group has temporarily suspended efforts to raise its third private equity fund, according to comments made by firm co-president Josh Steiner during the Reuters Private Equity & Hedge Fund Summit in New York on March 24.

Quadrangle had been seeking $2 billion, but got de-railed by both the difficult fundraising environment and the departure of firm co-founder/frontman Steve Rattner, who left the firm to serve as a counselor to Treasury Secretary Tim Geithner.

“We’re not raising the fund at this moment, but we will at some point,” said Steiner, adding that all of Quadrangle’s investors had been apprised of the situation. “Steve’s great, any firm in the investment banking business would rather have him part of the firm than not have him… most financial institutions go through a transition and we were determined when we founded this not to make any individual indisepnsible.”

Quadrangle has called approximately 75 percent of its $2 billion second fund, which closed in 2005. Steiner said that most of that money will be used to support existing portfolio companies, but that Quadrangle remains open to new investments (particularly PIPEs or debt purchases).

The only hiccup would be if limited partners deny Quadrangle the ability to amend its keyman provisions — a request necessitated by Rattner’s departure — but such a move is highly unlikely. If LPs were to do so, it would need to be by the end of April.