Carlyle, N.Y. Hedge Fund Take Big Stake In Va. Bank

May 25 2010 | 11:45am ET

Alternative investment firms continue to pour money into the banking industry, with the latest investment coming from private equity giant the Carlyle Group.

The Washington, D.C.-based firm and New York-based hedge fund Anchorage Advisors will each buy about $73 million worth of shares in Hampton Roads Bankshares, giving the two firms a combined 46.2% voting stake in the bank. Each will also get one appointee on its board of directors, which has been reduced to nine. The investment is part of a $255 million capital-raising bid by Hampton Roads, alongside at $20 million rights offering.

Hampton Roads’ market capitalization is currently about $37 million.

Hampton Roads operates 60 branches in Virginia, North Carolina and Maryland.

The Hampton Roads deal is Carlyle’s second for a bank, following its investment in BankUnited last year. Other alts. firms active in buying up bank shares or acquiring failed banks include the Blackstone Group, Dune Capital Management, Elliott Management, Greenlight Capital, JC Flowers & Co., Paulson & Co., Soros Fund Management and W.L. Ross & Co.

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