As Steve Rattner reportedly continues to negotiate with authorities over his alleged role in a pay-to-play scandal, executives at the firm he helped establish,
The firm is most likely to remain independent and continue to manage its investments, according to a source with direct knowledge of the options the firm is debating. Quadrangle would not likely make new investments or raise a new fund any time soon, although it could eventually, depending on how its most recent fund performs.
Under this scenario, Quadrangle may hire one or two senior professionals to help monitor Quadrangle’s portfolio. The firm is “very far along” in conversations with a few potential candidates, our source said. The firm would expect some of its investment professionals, including one or more managing principals, to look for work elsewhere.
Quadrangle is also weighing two other options. One is selling itself to, or partnering with, a larger private equity firm that might value Quadrangle’s experience in sectors such as media and telecommunications, or its office in Hong Kong. Quadrangle has held talks with several firms about this type of arrangement, our source said.
The third and least likely option would be partnering with a major corporation or wealthy family, which would provide money for a captive fund managed by Quadrangle.
Quadrangle executives hope to make a decision by the end of year, our source said. Evercore Partners, the boutique investment bank, is advising the firm in its decision.
Founded in 2000, Quadrangle manages $3 billion in assets, including a portfolio of 13 companies in the business services, cable, internet, telecommunications and film industries. The shop has invested most of its second and most recent fund, a $2 billion pool of capital it closed in 2005. Quadrangle has five managing principals, one principal and nine junior investment professionals.
Fund II has so far generated a positive IRR and is expected to produce positive returns for its investors and carry for Quadrangle. The fund has produced at least two solid realizations, including Dice Holdings Inc., a New York-based company that helps technology and finance companies recruit employees. Quadrangle bought the company in 2005 with
Meanwhile, the SEC reportedly delayed a vote last week on a settlement with Rattner as New York State Attorney General Andrew Cuomo’s office negotiated its own settlement with him over his alleged role in a pay-to-play scheme with the