Quadrangle hires Evercore executive as CFO

Puneet Gulati replaces former CFO Steven Davidson, who left the firm earlier this year.

The Quadrangle Group has hired Puneet Gulati, a former executive with Evercore Partners, as chief financial officer, replacing Steven Davidson who left earlier this year.

Gulati, who joined the firm in early April, spent five years working as CFO in Evercore’s investment management group. Prior to that, he worked as CFO at JP Morgan Partners, Latin American Fund, for six years and also held accounting roles at Warburg Dillon Read and Gruntal & Company.

Gulati replaces Steven Davidson, who Quadrangle hired as CFO in 2008. Davidson had formerly been CFO at Mourant.

In January, Quadrangle hired Bret Oettmeier as vice president on the investment team. Oettmeier had been working at UBS in the media and telecom investment banking division.

Puneet
Gulati

The hires come as Quadrangle works to manage out remaining investments in its two private equity funds. Its first fund, which collected about $1.1 billion in 2000, has three companies left to divest, while the second fund, which closed on $2 billion in 2005, has 10 investments remaining.

The firm implemented a number of management and structural changes in the past year after getting caught up in a pay-to-play scandal involving founder and former chief Steven Rattner. Rattner left the firm in 2009 to join the administration of US President Barack Obama, triggering a key-man clause in the second fund under which LPs could have voted to terminate the fund’s investment period. LPs chose to keep the fund investing, though the investment period at this point has expired and the firm is focused on managing existing investments.

Quadrangle settled with New York State to resolve its role in the pay-to-play investigation and went about implementing changes to align its interest more with LPs. Co-founder Joshua Steiner moved into a senior advisor role, shifting day-to-day responsibilities to president and managing principal Michael Huber and managing principal Peter Ezersky.

Quadrangle’s principals decided to kick in more of their own capital to pay for the firm’s operations, supplementing the management fee. The firm also chose to shift the second fund’s distribution structure to a European-style “waterfall”, meaning GPs would not take any carry until they had returned 100 percent of invested capital.

The firm is “absolutely” not in wind-down mode, the firm has said in the past, though any future fundraising would depend on the outcomes of funds I and II, according to a Quadrangle LP in a past interview. The performance of Fund I could not be determined as of press time. Fund II was generating a 7.9 percent internal rate of return and a 1.30x multiple as of 30 September, according to performance numbers from the California Public Employees’ Retirement System.