Quadrangle Group Heads Into A Save Situation
The Quadrangle Group has spent an uncomfortable week in the spotlight, following allegations that firm co-founder Steve Rattner may have used improper means to secure a fund commitment from New York's state pension system. Things have gone a bit better behind the scenes, however, where Quadrangle has been working hard to preserve its own existence. When Rattner left Quadrangle in February to oversee the nation's auto industry, it left his remaining partners prone to investment impotence. Specifically, limited partners in the firm's $2 billion second fund were automatically given the right to prevent Quadrangle from making any new investments -- save for follow-ons with existing portfolio companies -- because Rattner was termed a "key-man" in fund documents. Not only would this erase most of the $500 million left in Quadrangle's second fund (plus associated fees), but it also would quash the firm's hopes of ever raising a third fund. In other words, it probably would be the end of Quadrangle.
