In a recent press release that a consortium of private equity buyout
firms would take control of BankUnited FSB, the Federal Deposit Insurance
Corporation (FDIC) said it would soon provide guidelines for future
private equity investments in bank holding companies.
On May 22, 2009, the FDIC announced that BankUnited, a newly chartered
federal savings bank, acquired the government-seized BankUnited Financial, the
largest independent bank in Florida, in a transaction facilitated by the FDIC,
and recapitalized it with $900 million in capital. The acquisition was led by
John Kanas, the former CEO of North Fork Bancorp, and, unlike most deals for
failed banks, a new bank holding company was formed and capitalized with backing
from a consortium of private equity investors, including: W.L. Ross & Co. LLC;
Carlyle Investment Management L.L.C.; Blackstone Capital Partners V L.P.;
Centerbridge Capital Partners, L.P.; LeFrak Organization, Inc.; The Wellcome
Trust of London; Greenaap Investments Ltd.; and East Rock Endowment Fund.
In connection with the transaction, the FDIC noted in its press release that
due to the interest of private equity firms in the purchase of depository
institutions in receivership, the FDIC has been evaluating the appropriate terms
for such investments. In the near future, the FDIC will provide generally
applicable policy guidance on eligibility and other terms and conditions for
such investments to guide potential private equity investors.
Equity group at McGuireWoods LLP is dedicated to keeping our clients advised
of new legislative and business developments as they occur. If you have any
questions regarding these issues, please feel free to contact your primary
attorney at McGuireWoods LLP or the authors.