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The mayor moves his money

By A. James Memmott

February 22, 2010 at 8:32am

New Yorkers got a reminder last week that their mayor doesn’t have to live from paycheck to paycheck with the news that he is moving $5 billion of his personal wealth to a new investment firm.

Michael R. Bloomberg is taking the money away from Quadrangle Group LLC, the private-equity and investment firm co-founded by his friend Steven L. Rattner.

Bloomberg had invested with Quadrangle in 2008.

Several employees of Quadrangle, including Alice A. Ruth, who led the team that managed the mayor’s money, will leave Quadrangle and be part of a firm that will focus solely on Bloomberg’s assets.

Michael R. Bloomberg
Michael R. Bloomberg

“The fact that the mayor will be hiring the same team Quadrangle put together to manage these funds shows how pleased he is with their performance, which has been excellent,” a spokesman for Bloomberg told the media. “He has nothing but good things to say about the job Quadrangle has done.”

Rattner, a former New York Times reporter who left the newspaper to go into banking, resigned from Quadrangle last year to serve as President Barack Obama’s automobile czar.

He left that position after seven months, but he did not return to the firm, which was the target of investigations by the New York state attorney and the Securities and Exchange Commission.

The investigations, which continue, focus on Quadrangle’s dealings with the scandal-rocked New York state pension fund. No charges have been filed against Rattner or Quadrangle.

Rattner and his wife, Maureen White, are prolific fundraisers for Democratic candidates. Recently, they have been linked with Harold E. Ford Jr. and his possible run for U.S. Senate seat now held by Kirsten E. Gillibrand.

The Times estimates Bloomberg’s total wealth, including the $5 billion he had with Quadrangle, to be $15 billion. The New York Daily News estimates Bloomberg to be worth $17.5 billion.

The mayor, who made a fortune with his financial information company, Bloomberg L.P., spent more than $100 million of his own money on his re-election campaign last year.

Bloomberg has given away millions of dollars through the Bloomberg Family Foundation. The foundation had much of its money invested with Quadrangle.

According to the Daily News, the foundation lost $279 million in 2008, a bad year for investors everywhere.

The loss of Bloomberg’s investment will reduce Quadrangle’s holdings by “more than half,” the Times reported. However, the firm’s private equity funds are doing well, according to other reports.

Rattner and Bloomberg remain friends, the Times reports.

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