Private Equity Funds and Banks: Guidance on Equity Investments in Financial Institutions
April 30, 2008
The National City capital raise with Corsair Capital is but the latest of the private equity forays into the banking business. Earlier this month we saw the TPG Capital’s investment in Washington Mutual. Citadel Investment Group’s investment of $1.6 billion in E*Trade announced last November was perhaps the first of these during the current capital crisis, and, given the state of the banking industry at the moment, there will surely be many more.
The purpose of this advisory is to highlight some of the major issues associated with these investments and to provide some degree of guidance as to the how’s and why’s of these transactions.
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