Angelo Gordon hires Goldman veteran to co-head private equity

The hybrid investment firm, which employs private equity and hedge fund strategies, closed its fourth private equity and special situations fund on $650m late last year.

Angelo Gordon has hired Goldman Sachs veteran Arthur Peponis as co-head of its special situations and private equity group, which closed its fourth fund on $650 million at the end of 2008.

“We do see this as an excellent time to be making investments in the private equity space,” said David Roberts, senior managing director of Angelo Gordon’s private equity team. “That’s one of the reasons we added someone of [Peponis’] seniority and stature.”

Peponis joins Angelo Gordon from Goldman Sachs, where he was chief financial officer of the financial sponsors group and managed the investment banking activities of a number of private equity firms. Peponis originated and completed more than 150 M&A/advisory transactions and helped to source more than $3 billion of investments for Goldman’s Principal Investment Area.

“There will be some similarity to what I’ve been doing, it will be a shift from the agency to the principal side,” Peponis said. “I’ve been covering private equity firms for 15 years and I’ve worked on 150 deals.”

The private equity world is full of special situation opportunities and most transactions out there involve companies that are over-leveraged, Roberts said.

“Those are the types of situations we think we’ll be dealing with in the foreseeable future,” Roberts said. “We don’t think there will be the traditional leveraged buyout coming back for quite a while.”

The firm’s fourth private equity fund, Angelo Gordon IV, was in fundraising for about a year, Roberts said, and includes many returning investors. The firm, which uses a variety of strategies, including private equity and hedge funds, did not use a placement agent for the fund. 

Angelo Gordon closed its third private equity fund on $350 million in 2005. In 2000, it launched its private equity special situations business, which manages more than $1 billion in existing investments and committed capital. The firm also engages in distressed debt investing and leveraged loans and real estate.

Peponis is one of several Goldman executives who have left after the firm converted to a bank holding company last year, subject to federal regulation and possible limitations on executive remuneration.

Last week, sources told PEO that Byron Trott, an investment banker with Goldman for 27 years, was leaving to launch his own merchant banking firm to be called BDT Capital Partners. Trott is trying to raise $2 billion to invest in and advise family-controlled businesses. Warren Buffett will reportedly back the firm.