Does anyone have any additional insight/thoughts with respect to the departure of Flowers? Could his departure mean he has soured on esgr as an investment and is now seeking to dispose of his shares without the need for filing the form 4's?
Anyone who paid $100 million for an apartment in NYC is out of their mind with hubris.
Dumb money with high leverage can be lucky once or twice but at the 2007/2008 credit crisis shows, leverage works both ways.
At the end of the day, what did he do for ESGR?
Oh, he brought deals.
u & besterman below r spot on, imo. flowers was the reason i sold out of esgr a couple of yrs ago.
i'm just revisting now, saw this, & i'm eager to peek under the hood again.
as noted, flowers did have an enviable rolodex tho, which helped esgr in the early yrs when credit was cheap, plentiful, & had the wind at its back, a rising tide, & buoyant setiment to boot. those days are gone.
Let's not forget the many other bone headed deals he was sniffing around - Sallie Mae in the $50/share range? Hypo investment goes to zero, several of the Euro banks he invested in, including new investments in Shinsei were all victims of the financial crisis - some more than other banks, sniffing around danger and overpaying means often getting burned. There was also his firm's recommendation about Merril Lynch and the positive opinion he gave of that firm before it fell off a cliff.
So you replace the stewardship of the Flowers group with that of the institution of GS private equity. On the one hand, it's a statement that the business has now out grown the "family office" stage, on the other, you lose a talented guy like Flowers, and a known quantity in deal making and rolodex. We will only find out whether this is good or bad in time, and certainly in hindsight. In my mind, Flowers has done a lot of good (think all the deals he may or may not have brought, and certainly the bank lines in the middle of the worst liquidity crisis in our memory), and some harm (think the money lost in his PE funds) in his tenure with this shop.
I wish we could find out more about our new board member. I do know that GS has backed plenty of successful insurance operations at the onset of an insurance hardening market, and later took them public at multiples of where they got in, as well as having LBO'ed insurance brokers in the past. So in theory the relationship / deal sourcing network is there. But do know this, that you are involved here at a price much lower than where the GS funds got in at, and when / if they do exit at some point in the future, you wouldn't need to pay Goldman the carried interest, unlike the family office / pension funds invested with the GS PE funds.
We wait and see what the future brings.