JC Flowers & Co LLC

  • Overview
THE SCOOP

Billion dollar baby

JC Flowers & Co. is the brainchild of former Goldman Sachs executive J. Christopher Flowers, a man who counts himself among the privileged few human beings who can call themselves billionaires.  Flowers started JC Flowers in 2001, with 25 years of experience in the financial services sector, including a position as head of Global Financial Institutions at Goldman Sachs, followed by a quick climb up the ladder of fortune from there.  The startup private equity company's first fund closed in 2002 with capital of $900 million and subsequently made 11 investments.  Its next fund grew by more than sevenfold, closing with $7 billion in commitments in 2006.

Specializing in buyouts, the firm invests in companies in the financial sector with a focus on banks, insurance and reinsurance companies, and asset management and brokerage houses, among others.  Current portfolio companies include HSH Nordbank, Shinsei Bank and Fox-Pitt Kelton Cochran Caronia Waller (FPK).  JC Flowers is headquartered in New York City with satellite offices in London, Hamburg and Beijing.

Taking over the board

JC Flowers & Co. has always taken an active role in the management of its portfolio companies.  In August 2008, J. Christopher Flowers took the ultimate initiative with Hypo Real Estate, a firm his company purchased a 25 percent stake in: He joined the supervisory board along with two of his advisors.  Flowers and his gang replaced three retiring members of Germany-based Hypo Real Estate.  Hypo Real Estate needed the help; the German company had suffered huge losses from the subprime mortgage fallout, making it a bargain to buy but a huge challenge to manage for JC Flowers.

Lucky break?

Things got dicey at the tail end of 2007 for JC Flowers when it tried to pull out of a deal to acquire the beleaguered loan company Sallie Mae.  In spring 2007, JC Flowers offered a deal of $60 per share to buy Sallie Mae, a deal which seemed to please both parties at the time.  However, the lender had yet to reach its bottom as a result of the subprime debacle.  In September 2007, JC Flowers offered Sallie Mae a deal: it would follow through with its takeover but only if the price was reduced to $50 per share.  Sallie Mae Chairman Albert L. Lord fought back in court, demanding that the buying consortium consisting of JC Flowers, Bank of America and JP Morgan pay a $900-million breakup fee.

Sallie Mae soon lost its liberty to pursue aggressive lawsuits when, in December 2007, the company was staring down $1 billion in losses from its stock decline.  Albert Lord was publicly embarrassed when he participated in an expletive-ridden, angry conference call with analysts later that month.  Finally, in January 2008, Lord and Sallie Mae dropped the lawsuit against JC Flowers altogether, ending the pitched battle with a whimper rather than a roar.

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JC Flowers & Co LLC


717 Fifth Avenue
26th Floor
New York, NY 10022
Phone: (212) 404-6800
Fax: (212) 404-6899
www.jcfco.com

STATS


  • Employer Type: Private
  • Founder: J. Christopher Flowers

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