Co-president Michael Huber and Peter Ezersky will continue as managing principals while co-president Joshua Steiner will transition out of day-to-operations to a senior advisor role. Managing principals Andrew Frey and Edward Sippel, who had focused on finding new deals, will also transition out of the firm in 2011, according to a Dec. 6 letter to limited partners.
The firm, which is in the process of selling Bresnan Communications LLC, a Purchase, N.Y.-based telecommunications services company, also hired new executives to help manage its existing portfolio. Quadrangle
Founded in 2000, Quadrangle manages $3 billion in assets, including a portfolio of 14 companies in the business services, cable, internet, telecommunications and film industries. The personnel moves are part of a transition at the firm from one that’s looking for new deals to one that, for the time being at least, will focus on managing its existing portfolio.
A few other highlights from the letter and a Buyouts interview with Huber and Steiner:
• Quadrangle’s two funds have increased in value by 45 percent and 37 percent, respectively, since Dec. 31, 2008. Through September, Fund I has generated a gross internal rate of return of 11 percent and an investment multiple of 1.3x, while Fund II has generated an 18 percent return and 1.8x multiple.
• The firm hired Steven Felsher, the former CFO of global advertising and marketing services firm Grey Global Worldwide Group Inc., as a senior advisor; and Thomas Kohut, a former senior exec in financial and operating capacities at Ernst & Young, as principal.
• The firm may continue to explore partnerships and other strategic alternatives.
The firm’s future has been in question since last year, when Rattner left to lead President Barack Obama’s auto task force and it was named in investigations by the New York State Attorney General’s office and the U.S. Securities and Exchange Commission into an alleged kickback scheme involving the
Quadrangle has since settled with prosecutors and the SEC. Rattner, for his part, has settled with the SEC but was recently sued by the New York Attorney General’s office.
Huber and Steiner stressed in an interview that the firm has been concentrating on aligning Quadrangle’s interests with its investors. To that end, the firm has reduced management fees, and Huber, Ezersky, Steiner Frey and Sippel plan to invest millions into the firm and devote a cut of their carry to continuing and new staff to keep them motivated.
Steiner said he would most likely not return to private equity and may pursue a position in public service. He served as an economic policy adviser to President Barack Obama during his transition into the Oval Office and was also Chief of Staff of the U.S. Treasury Department under President Bill Clinton. “Given stability in the portfolio, it’s an appropriate time to think about doing something different,” Steiner said.