Report: IndyMac sought PE help before failure

The California bank, which was taken over by the government earlier this month, approached several private equity firms in search of rescue capital but found no takers.

IndyMac Bank, the failed Pasadena, California-based bank that was taken over by a US government agency earlier this month, had sought rescue capital from a number of private equity firms.

According to a report in the Los Angeles Times, IndyMac’s investment bank, JPMorgan drew up a list of potential private equity investors that included Thomas H. Lee Partners, Ares Management, Golden Gate Capital, Taconic Capital Advisors, Stone Point Capital and Oaktree Capital Management. The article noted that the list included “more than a dozen” private equity firms and other potential investors, but did not name all of them.

The government’s IndyMac bailout is likely to cost the Federal Deposit Insurance Corporation (FDIC), which insures consumer deposits, as much as $8 billion, according to the report.

Several private equity industry advocates have complained that the regulations governing private investment in US banks deters private equity involvement. The Federal Reserve recently said it was reviewing these regulations.

Several private equity firms, including Texas Pacific Group, Warburg Pincus and Corsair Capital, are currently wrangling with investments in publicly traded financial institutions that saw their shares drop sharply following the equity infusions.