Buyout firms thwarted by regulators from taking over failed banks have found a solution: Acquire lenders that are still in business.The Carlyle Group has two operating lenders, BankUnited and Hampton Roads Bankshares. The FDIC provided $4.9 billion in subsidies for BankUnited. The Hampton Roads deal requires that Treasury write down its TARP investment.
Private equity underwriters (PEU's) have a new strategy to garner 30% ROI in banking.
Regulators are less likely to oppose investor windfalls as long as government asset guarantees aren’t involved.If windfalls don't come on the taxpayer's back, a greater burden falls on the customer. Elected leaders see PEU's as America's savior for public infrastructure, banking, health care and education.
For insight into what PEU can do for you, consider a case of Booz.