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Quadrangle may sell stake to ‘anchor’ investor

The New York-based firm, which is preparing to raise its third fund, may seek out a large investor to buy a stake in its management company and anchor its fundraise.

Quadrangle Group is exploring its options for the future of the firm, and on the cusp of a fundraising effort, may consider selling a stake in the management company to an “anchor investor”.

The firm plans to start raising its third private equity fund and is exploring its options on how best to proceed, a source told PEO. One option would be to bring in a weighty investor to take a stake in the firm, similar to the investment the California Public Employees’ Retirement System made in Silver Lake Partners. CalPERS bought a 9.9 percent stake in the firm in 2008, reportedly for $275 million.

That investor could then make a “significant” commitment to Quadrangle’s third fund, the source said.

The Wall Street Journal reported Thursday Quadrangle hired Evercore Partners to help it explore its options.

Quadrangle raised $2 billion for its second fund, which is reportedly close to being fully invested. The firm in April agreed to pay $7 million to settle its case with New York Attorney General Andrew Cuomo, and $5 million to the US Securities and Exchange Commission to end its case with the federal agency.

The agreement with Cuomo did not cover the firm’s co-founder, Steve Rattner, who left Quadrangle last year to join the administration of President Barack Obama. Quadrangle, in announcing the settlement, blasted Rattner for behaving in an “inappropriate, wrong and unethical” manner for hiring political fixer Hank Morris to help solicit the New York State Common Retirement Fund for a commitment.

Rattner has not been charged with wrongdoing.