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 (along with Steiner and outgoing Managing Principals Andrew Frey and Edward Sippel) 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.
A few other highlights from the letter and interview:
• The firm’s two funds have increased in value by 45 percent and 37 percent, respectively, since Dec. 31, 2008.
• Steiner will transition to a senior advisor role.
• The firm hired Steven Felsher, the former CFO of global advertising and marketing services firm Grey Global Worldwide Group Inc., as a senior advisor; and Thomas Kohut, a former senior exec in financial and operating capacities at Ernst & Young, among other companies, as principal.
• The firm may continue to explore partnerships and other strategic alternatives.
• Managing principals Andrew Frey and Edward Sippel, who had focused on finding new deals, will transition out of the firm in 2011.
One interesting side note from a brief call with Huber and Steiner is that the latter said he would most likely not return to private equity. And the first option he mentioned he might pursue, among others, was going into public service. Steiner, 45, served as an economic policy adviser to President Barack Obama during his transition into the Oval Office and he was also chief of staff of the U.S. Treasury Department under President Bill Clinton. “Given stability in the portfolio, it’s an appropriate time to think about doing something different,” Steiner said. (Upon further reflection, public service is not a likely option for his next career move, Steiner said through a representative after the interview.)
Read the letter in its entirety here.