Nonetheless, former Goldman Sachs banker Chris Flowers, today a private equity fund manager, and David Bonderman, the founder of venture capital firm Texas Pacific Group, have made a specialty of this economically and politically fraught skill. They now want to apply it to Germany.
The pair are bidding for nearly bankrupt Bankgesellschaft Berlin. BgB’s owner, the Socialist-run city of Berlin, has pledged up to E20 billion ($18.4 billion) to cover liabilities on real estate loans, many of them made to chums of now-ousted conservative politicians.
Flowers and Bonderman’s success at rescuing banks in Asia lends credibility to an associate’s remark that “they’ve got all the relevant experience when it comes to politically sensitive bids for banks that need a dose of Wall Street capitalism.” Flowers , along with Ripplewood Holdings, among others , took over Japan’s crippled Long-Term Credit Bank in 1999. The bank was renamed Shinsei, or rebirth, and put on a regimen rare among the country’s institutions: cutting off problem borrowers and extending new loans strictly on the basis of creditworthiness. Last year Shinsei earned $310 million. Bonderman oversaw a turnaround at Korea First Bank.
Berlin’s government would like to rid itself of BgB, provided the new owners don’t decimate staff. Shinsei has increased its employment rolls, the press notes favorably.
