NEW YORK (Reuters) – Private equity firm Quadrangle Group will no longer be managing the assets of New York City Mayor Michael Bloomberg, who is extracting his funds from the firm, two sources said on Friday.
The news was earlier reported by the Wall Street Journal and New York Times, which said that Bloomberg is pulling roughly $5 billion of his personal assets from Quadrangle.
The founder of Bloomberg LP, a news and financial information company that competes with Thomson Reuters (TRI.N)(TRI.TO), had a total net worth of $17.5 billion in March 2009, according to Forbes’ website.
The arrangement for Quadrangle to manage Bloomberg’s money was an unusual one for a private equity firm. They typically focus on investing funds in buying and selling companies.
Quadrangle gained the account because its co-founder, Steven Rattner, is a close friend of Bloomberg, one of the sources said. However, Rattner left Quadrangle in 2009.
The team that currently manages Bloomberg’s assets will continue to do so, and the decision to transfer the team to a separate, stand-alone entity was not because of any issue with performance, the second source, who is familiar with Quadrangle, said.
Discussions over the move have been ongoing for some time, that source said, and the transfer was “amicable.”
Bloomberg’s spokesman Jason Post said “The fact that the Mayor will be hiring the same team Quadrangle put together to manage these funds shows how pleased he is with their performance, which has been excellent. He has nothing but good things to say about the job Quadrangle has done.”
According to the second source, the move will also allow Quadrangle to focus on its private equity business, which includes stakes in businesses such as movie studio Metro-Goldwyn-Mayer, the source said.
Quadrangle and Rattner were last year linked to the New York Attorney General’s probe into a state pension pay-to-play scheme although neither was accused of wrongdoing.