Quadrangle Wins LP Vote, Can Continue Investing
The Quadrangle Group will be allowed to invest the final $500 million of its $2 billion second fund, after a "significant majority" of limited partners voted to continue the commitment period, peHUB has learned from LP sources. A firm spokesman declined comment. For the uninitiated, Quadrangle's investors had until this past Friday to vote in favor of ending the fund's investment period, based on the February departure of "key man" Steve Rattner (who left to become Obama's auto czar). Such a move would have precluded Quadrangle from adding new portfolio companies, although it would have been allowed to re-invest in existing ones (including add-on transactions). LPs rarely invoke such privileges, due to concerns that ending an investment period could cause an exodus of firm personnel -- thus leaving existing investments unattended. But Quadrangle was a special case. Not only was Rattner the firm's public face, but he also was the primary contact with many of its larger limited partners. Moreover, Rattner has been implicated as at least a tangential part of the pay-to-play scandal that has engulfed the New York State Common Retirement Fund -- although no formal charges have been brought against him.
