Private equity firm J.C. Flowers may lose $47.8 million on its stake in MF Global’s, Bloomberg TV reporter Cristina Alesci is reporting.J.C. Flowers had around $87 million invested, she says. A portion was paid back to the company, but the worst case scenario for J.C. Flowers is losing the entire $47.8 million that hasn’t been paid back.
The PE firm has deep ties to MF Global – founder J. Christopher Flowers sat on the board of directors and helped install Jon Corzine into the top position at MF Global back in 2010. J.C. Flowers currently owns a 6% stake in the derivatives brokerage, and the firm had reportedly been in discussions with MF Global about a private equity buyout last week.
Corzine is an operating partner at the PE firm, and Flowers is also used to be an executive at Goldman Sachs (where Corzine was formerly CEO).
The biggest losers here will be J.C. Flowers’ investors – that includes pensions funds, mutual funds, individuals, etc. It will also have far-reaching effects – Bloomberg’s Alesci reports that some of the investors in the fund include a German company and a Japanese bank.
Also, check out Flowers’ role in the movie “Too Big To Fail,” based off Andrew Ross Sorkin’s book on the financial crisis.