Business

Quadrangle kaput

Quadrangle Group, the media-focused private equity outfit founded by former car czar Steve Rattner, is winding down, The Post has learned.

Sources familiar with the firm’s plans, which have been in the works since the end of the summer, said Quadrangle will cease to exist in its current form as it tries to reinvent itself under a new name in the coming weeks.

Two of the firm’s key executives are also scaling back their involvement or leaving. Co-founder Joshua Steiner is expected to take on a lesser role at the firm, while managing principal Andrew Frey is set to leave by year-end, sources said.

Sources said a second pair of principals, Michael Huber and Peter Ezersky, will stay on board to manage assets.

The new entity likely will be more focused on managing client assets in the near-term, one source said.

Another person familiar with the firm’s plans said it was going through a transition and that it “wants to change its skill-set.”

Quadrangle has struggled since Rattner left and both he and his former firm were caught up in a pay-to-play-scandal involving the state pension fund.

The firm once ran $5 billion of Mayor Bloomberg’s personal fortune before he pulled his money last year after state Attorney General Andrew Cuomo and the Securities and Exchange Commission opened probes into Quandrangle’s role in an influence-peddling scheme involving the New York State Common Retirement Fund.

The SEC and Cuomo also launched investigations against Rattner, who agreed to pay $6.2 million and accept a two-year ban from the securities industry to settle SEC charges over his role in the scandal. Cuomo is still pursuing its case against Rattner.

Quadrangle’s efforts to find a buyer for the New York City-based firm appear to have stalled with prospective investors, including Carlyle Group and Oaktree Capital Management, balking at an acquistion. Quadrangle still hopes to find a buyer, a source said.

Sources said Quadrangle, which once managed $6 billion, is down to about $2.5 billion, while its headcount is less than half of its 90-person peak.

Officials at Quadrangle declined to comment as did a spokesman for Rattner.

Rattner left Quadrangle in February 2009 to help President Obama oversee the bailout of the cratering car industry.

Meanwhile, Rattner’s relationship with Quadrangle has soured, especially after the firm agreed to pay $12 million to settle both probes without including him.

Last week, Rattner disclosed an arbitration claim against Quadrangle seeking damages “for their unlawful conduct and contractual breaches” and for trying “to seize” money owed to him by the firm.

mdecambre@nypost.com