Bloomberg Pulls Money From Quadrangle

Feb 23 2010 | 9:04am ET

New York City Mayor Michael Bloomberg is yanking $5 billion from Quadrangle Group, the private equity firm caught up in the pay-to-play scandal at a New York State public pension fund.

The New York-based firm, founded by longtime Bloomberg friend and former Obama administration auto czar Steven Rattner, has managed about one-third of Bloomberg’s estimated $15 billion fortune. Since 2008, Quadrangle has managed Bloomberg’s money through a separate investment team, whose approximately dozen members will join a new investment firm that will manage only the mayor’s money and that of his charitable foundation.

“Having successfully built out the investment team and operating functions necessary to provide these services, Mayor Bloomberg believes creating this independent entity will allow his investment team to operate with the flexibility and privacy that he seeks,” Quadrangle wrote to investors. “We thank Mayor Bloomberg for his support and confidence, and we wish our colleagues well in the transition to their new home.”

Bloomberg’s decision cuts Quadrangle’s assets under management by more than half. It also leaves the firm with only its private equity business; Bloomberg was the only client of its asset management unit.

Quadrangle, which Rattner left when he joined the Treasury Dept., has not been accused of any wrongdoing in the pay-to-play scandal at the New York State Common Retirement Fund. But the Securities and Exchange Commission said the firm won a $100 million allocation from the pension after a DVD distribution company owned by Quadrangle agreed to distribute a movie produced by the brother of one of the alleged architects of the kickback scheme.


In Depth

Don’t Overlook These 6 Hybrid Cloud Concerns

Sep 14 2017 | 6:27pm ET

Cloud-based technology solutions have made tremendous inroads into the alternative...

Lifestyle

CFA Institute To Add Computer Science To Exam Curriculum

May 24 2017 | 9:25pm ET

Starting in 2019, financial industry executives sitting for the coveted Chartered...

Guest Contributor

Cash: An Asset In Adolescence

Aug 31 2017 | 3:34pm ET

If the investment industry has a rebellious teenager in the house today, that teenager...

 

From the current issue of