A Congressional oversight committee on Friday issued a report that was harshly critical of how Hank Paulson & Co. spent the initial monies, arguing that they only got around 60 cents worth of value for every dollar spent. Most of the media reports quote Elizabeth Warren, a Harvard professor who chaired the study. What they fail to note, however, is that a private equity pro was an integral part of actually valuing the purchased assets.
That pro was Adam Blumenthal, a co-founding managing partner of Blue Wolf Capital Management and former first deputy comptroller of the City of New York.
Blumenthal was recruited late last year by David Silvers, associate general council of the AFL-CIO (Blue Wolf has tight union relationships). He says that the original task seemed daunting, but that it got easier once he and his two team members got to work:
“I think there’s a lot of noise around understanding these investments, but when we looked at it carefully we quickly learned that it could be done. There’s a lot of zeros on these numbers, but they’re investments in companies in exchange for preferred securities. From a private equity perspective, that’s the kind of work we do every day.”
You can download the full report here.