According to Reuters, assets of the failed mortgage lender IndyMac Bank (IDMCQ.PK) may be bought by a consortium of private equity and hedge fund firms.
The prospective buyers include:
- New York-based private equity group J.C. Flowers & Co., run by billionaire and former Goldman Sachs (GS) partner, Christopher Flowers.
- Dune Capital Management, a firm launched in 2004 as a spin-off of Soros Capital Management, when it restructured, and led by former Goldman Sachs executives Steven Mnuchin and Daniel Niedich.
- New York-based hedge fund company Paulson & Co., Inc. run by John Paulson.
If the deal gets finalized it will put the Pasadena-based lender back in the hands of private owners only five months after the government seized control of its operations. The consortium would buy the bank’s $6 billion in assets, its 33 branches, IndyMac’s reverse-mortgage unit and a $176 billion loan-servicing portfolio, the paper said.
The presence of private equity and hedge fund firms comes after the FDIC announced last month it was expanding the pool of qualified bidders to include those institutions that do not currently have a bank charter. Final bids for the mortgage lender were due to FDIC by Dec. 15.
Since the federal government seized control of IndyMac on July 11 of this year, because of bank’s bleeding from growing defaults on its so-called Alt-A adjustable rate home loans, the preference by the FDIC has been that of selling the bank in one piece to a private equity group. It feels that it could mean less pain for the bank’s nearly 2,000 employees, most of whom are located in Southern California.
The FDIC has estimated that IndyMac’s failure will cost the deposit insurance fund $8.9 billion. The final loss figure however, depends on how much the agency gets for the bank.
Barclays Capital and Deutsche Bank (DB) are advising the FDIC on the sale.