The News: Another Path Back Into Banking
If your bank was acquired and you'd like another go at running one, here's a new avenue: raise money through a blind pool to acquire failed institutions seized by the government.
Says The Wall Street Journal: "Firms such as Goldman Sachs Group Inc. and Deutsche Bank AG are racing to form investment pools that plan to fund acquisitions by the bankers, who hope to leap into the auction process for failing banks led by the Federal Deposit Insurance Corp."
While private equity funds have a natural interest in scooping up troubled bank assets, the new pools enjoy a leg up for at least two reasons. The involvement of former top banking executives gives regulators a degree of comfort, and FDIC rules issued in August require banks acquired by PE firms to hold more capital than other banks and ban "flipping." Surviving traditional banks also are prospective buyers, but few are strong enough or interested, the Journal says.
One pool is comprised of three ex-chief executives: William Harrison of JP Morgan Chase, Robert Steele of Wachovia and Herb Boydstun of Louisiana's Hibernia (now part of Capital One). Another pool, NBH Holdings, led by former executives of RBS's Rhode Island subsidiary, raised $1.15 billion from 70 investors in a private placement last month, the Journal says.
The story also names Charles Rinehart and Kevin Twomey (formerly CEO and CFO, respectively, of H.F. Ahmanson, a big California thrift now part of JPMorgan Chase), Daniel Healy, former CFO of North Fork Bancorp (now part of Capital One), and Joe Evans, former chief of Atlanta's Flag Financial Corp. (now part of Royal Bank of Canada).
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