member investor group including billionaire George Soros and Dell Inc. founder Michael Dell have agreed to purchase failed lender IndyMac Bank, one of the largest casualties of the housing bust, for $13.9 billion. IndyMac, which specialized in loans made with little down payment or proof of assets, was seized by the government in July after a run on the bank as the US housing market collapsed. The Federal Deposit Insurance Corp. said Friday that a holding company led by Steven Mnuchin, co-chief executive of private equity firm Dune Capital Management, agreed to buy IndyMac in a deal reached Wednesday. The investors have formed a partnership, called IMB Management Holdings LP, that includes Dell's investment firm, MSD Capital. Once the deal closes, the investment group will pour $1.3 billion in new capital into IndyMac and continue to operate the Pasadena, California-based bank, the FDIC said. “We have assembled a group of experienced private investors in financial services to acquire the former IndyMac and operate it under new management with extensive banking experience,” Mnuchin said in a statement. “We will inject significant private capital into IndyMac so that it can once again effectively serve its customers and communities.” Investors in the partnership include five private equity firms or hedge funds: J.C. Flowers and amp; Co.; Stone Point Capital; Paulson and amp; Co.; a fund controlled by billionaire George Soros' Fund Management; and a fund controlled by Silar Advisors LP. Dune Capital was founded in 2004 by former Goldman Sachs Group Inc. partners Mnuchin and Daniel Niedich. J. Christopher Flowers, who launched, then dropped, a bid to buy student lender Sallie Mae last year, also is a former Goldman Sachs partner. Paulson and amp; Co. made billions in profits in recent years by betting on the failure of risky home loans. IndyMac has 33 bank branches in Southern California with about $6.5 billion in deposits, about half the company's total at the time of its failure. Other IndyMac assets include a $157.7 billion loan servicing business, which collects mortgages and distributes them to investors, and a reverse-mortgage company, known as Financial Freedom. The failure of IndyMac, which had $32 billion in assets, was the second-largest last year, trailing only the September failure of Washington Mutual Inc. Under terms of the sale, the new investors will shoulder the first 20 percent of the bank's loan losses, with the FDIC agreeing to take on the majority of any losses thereafter. The FDIC said Friday its bank insurance fund stands to lose $8.5 billion to $9.4 billion on IndyMac. Relaxation of some rules by US regulators has made it easier for private equity firms to invest in banks, with Flowers being cleared in August by the Office of the Comptroller of the Currency to buy a small bank in Missouri.
