Quadrangle’s Media Offensive: UPDATED

Quadrangle Group went on the offensive today, sending a letter (see link below) to LPs detailing fund performance progress, portfolio company activity and personnel developments at the firm while reaching out to the media. The idea was to cut through recent headlines that suggest a firm falling apart since the departure of founder Steven Rattner to one that is transitioning to more of a portfolio manager. I’ll have a more in-depth story in the upcoming issue of Buyouts.

Quadrangle execs Michael Huber and Joshua Steiner (who will be transitioning out of day-to-operations at the firm) 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. Managing Principals Huber and Peter Ezersky also plan to invest millions into the firm and devote a cut of their carry to continuing staff and new staff to keep them motivated.

Is Quadrangle Near Shutting Down?

The Quadrangle Group just can’t seem to get a break. The media investment firm, which is being sued by one of its co-founders, is near shutting down in its current incarnation, according to the New York Post.

New York-based Quadrangle, started by Steven Rattner a decade ago, “will cease to exist in its current form as it tries to reinvent itself under a new name in the coming weeks,” the NY Post says.

Joshua Steiner, Quadrangle’s co-founder, will take on a lesser role at the firm, while Andrew Frey, a managing principal, is set to leave by the end of the year, the story says.

Cuomo Issues New Subpoena To Quadrangle While Rattner Negotiations Continue

We finally have some news on Steve Rattner’s long awaited settlement with New York Attorney General Andrew Cuomo.

Cuomo, who recently won his bid for governor, has issued a new subpoena to the Quadrangle Group for information about Rattner’s compensation and the financial terms of his departure, according to the New York Times.

The subpoena comes after Rattner rejected a settlement last month with Cuomo where he would have had to pay a $20 million penalty, the NY Times says. Rattner and his lawyers have claimed that the $20 million is “disproportionate” to the money he earned at Quadrangle and to the penalty other executives caught up in the pay-to-play scandal have had to pay. Rattner’s negotiations with Cuomo continue, the NY Times says.

Morris Reaches Deal To Plead Guilty In NY Pension Probe

There’s some news today on the “pay to play” scandal.

Henry “Hank” Morris, former adviser to ex-New York Comptroller Alan Hevesi, has agreed to plead guilty to a single felony in the state’s long running corruption investigation, according to press reports. Morris had been charged last year in a 123-count indictment.

Last month, Hevesi pleaded guilty to a single charge of felony corruption.

Andrew Cuomo, the New York attorney general who this week won his bid for governor, has been investigating the “pay to play” practices at the New York Common Retirement Fund for the past three years. Hevesi was sole trustee of the fund, which is valued at $124.8 billion. Cuomo has charged that the fund became “a piggy bank” for Morris, who reaped millions of dollars in fees from individuals and firms seeking to invest the state’s money, Reuters has said.

Quadrangle Unlikely To Be Sold

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, Quadrangle Group LLC, are zeroing in on three options for their future. These include staying independent; selling to a private firm or partnering with one; or establishing a captive fund with a major corporation or wealthy family.

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.

Rattner resisting proposed SEC penalty – report

Steve Rattner, who founded private equity firm Quadrangle Group and later headed up Barack Obama’s auto task force, is resisting the proposed penalty from the SEC for his role in a pay-to-play scheme involving the $132 million state pension fund, according to the Wall Street Journal. A proposed settlement case between Rattner and the SEC was dropped from the calendar last week, unexpectedly.

Hevesi Pleads Guilty To Felony Corruption, Cooperating with NYAG Cuomo

Alan Hevesi, former New York State Comptroller, pleaded guilty today to a single charge of felony corruption in the latest development in the state pension fund scandal.

Hevesi turned himself in today at State Supreme Court in Manhattan. He acknowledged receiving nearly $1 million in gifts in exchange for improperly favoring and approving a $250 million investment by the New York State Common Retirement Fund into Markstone Capital Partners, a statement said. Hevesi also admitted that he knew Henry “Hank” Morris, his top political aide, used the pension fund to personally receive fees for deals and steered investments to friends and political associates, a statement from Cuomo’s office said.

(When) Will Rattner Be Indicted?

On the same day that Roger Clemens was indicted for perjury, some PE execs were wondering about a big name in the buyout world that has remained unscathed.

“When will Steve Rattner be indicted?” one source wondered. “We are all amazed at how long he has managed to avoid it. It pays to be a fundraiser for the party in power.”

The person is, of course, referring to the pension fund kickback scandal that has engulfed Rattner for over a year.

Rattner, who co-founded the Quadrangle Group in 2000, was once a powerful buyout executive and former investment banker. In early 2009, he was appointed to head President Obama’s auto task force and aspired

Quadrangle Group Considers Its Options

NEW YORK (Reuters) – Private equity firm Quadrangle Group LLC, which is gearing up to raise a new fund, is exploring options which could include selling a minority stake in itself and gaining an anchor tenant for its fund, two sources familiar with the matter said on Wednesday. Quadrangle, a media-focused firm, is in discussions […]

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