Old-school finance still appeals to former Citigroup Inc. CEO Vikram Pandit.
Mr. Pandit, 59, has started a new company with an investment firm backed by Comcast Corp. that will seek big stakes in more mature financial services companies, according to people familiar with the matter.
The venture may reflect a recent shift in deal making: Venture-capital investors lately have been backing off of funding finance and banking startups, some of which Mr. Pandit has invested in recently. Meanwhile, deals for older companies that serve banks and other financial-services firms more broadly have been rising in value, with intense bidding driving up price tags of firms such as Interactive Data Holdings Corp. and SNL Financial.
In a new company jointly backed by the Comcast-backed investment firm, Atairos Group, Mr. Pandit will seek to take long-term controlling or significant stakes in established financial-services companies, the people said. Atairos, which is run by former Comcast Chief Financial Officer Michael Angelakis, has about $4 billion of Comcast’s funds under management and collects annual fees of about 1%, or $40 million, half of the typical rate for a private investment fund. It is unclear how much of Atairos’s fund Mr. Pandit will invest.
Atairos, which means “partnership” in Greek, launched earlier this year. Other partners include David Caplan, a former Davis Polk & Wardwell LLP lawyer, and Alexander Evans, former head of strategy at Comcast.
The group’s mission to take sizable and long-term stakes for typically 10 years or more in a wide range of companies, not just those with strategic links to Comcast, akin to a holding company such as Berkshire Hathaway Inc. Atairos took a $250 million stake and a board seat in Groupon Inc. in April.
Mr. Pandit’s new company, called Orogen Group, won’t aim to take stakes in startups, but in profitable growing or mature financial-services companies—such as insurers, lenders, asset managers, or financial technology firms—that could be expanded or modernized, people familiar with its plans said.
Orogen will seek to buy either majority interests, or minority investments with active management roles or board seats, the people said. It is currently looking for new office space in Midtown Manhattan.
Also joining Mr. Pandit at Orogen will be former Citigroup head of strategy Ruchi Madan and Shannon Bell, former head of corporate communications, the people said.
Mr. Pandit has history in financial-services dealings, selling his alternative-investment group Old Lane Partners to Citigroup for $800 million in 2006, a year before he was named Citigroup’s top executive. Mr. Pandit received $165 million in the sale. The fund closed in 2008. Mr. Pandit left Citigroup in 2012 over disagreements with the bank’s board.
His latest move follows three quiet years in which Mr. Pandit made a series of small investments in startups and deals in India. Now, he is among the most active of a group of former top bank executives who have invested or advised fintech startups since the financial crisis, including Morgan Stanley’s John Mack and Deutsche Bank AG ’s Anshu Jain.
Mr. Pandit is an early venture backer of several U.S. fintech startups, including CommonBond Inc., an online student lender; Orchard Platform, which connects investors to online lending platforms; global money transfer service TransferWise; and digital lending services firm MMKT Exchange LLC.
In 2013, Mr. Pandit took stake in JM Financial, a nonbank financial group in India. A plan for JM to become a bank didn’t pan out, but Mr. Pandit and JM more recently jointly created a real-estate investment fund. He also served as chairman of TGG Group, a consulting firm founded by University of Chicago academics including “Freakonomics” co-author Steven Levitt.
Courtesy : wsj.com