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Rubin to Stop Advising Taconic, Farallon Hedge Funds, Joins Centerview

Robert Rubin, the former U.S. Treasury secretary who advised Citigroup Inc. as it lost $20 billion in the subprime mortgage crisis, is halting work for two hedge funds as he joins Wall Street advisory firm Centerview Partners as a part-time counselor.

Rubin, 71, will stop advising New York-based Taconic Capital Advisors LP and San Francisco-based Farallon Capital Management LLC, said his spokesman, Adam Miller, who confirmed the move to Centerview. Miller and representatives of the three firms declined to say why he is departing. Taconic had $9.1 billion under management as of June 30, and Farallon had $20.6 billion as of Jan. 1.

Centerview, a merger-advisory boutique founded in 2006, has worked on some of this year’s biggest transactions, counseling vitamin maker NBTY Inc. on a planned $3.8 billion buyout by Carlyle Group, and helping Avon Products Inc. strike a $650 million deal for jewelry company Silpada Designs Inc. Rubin will continue advising venture capital firms General Atlantic LLC and Insight Venture Partners, Miller confirmed.

“He has an incredibly unique background that speaks for itself,” Miller said. “He’ll work with clients on whatever their issues are.”

Rubin is returning to Wall Street after leaving Citigroup’s board in the wake of the global credit crisis last year, after collecting more than $150 million in pay in a decade. The New York-based bank got a $45 billion bailout in 2008 from U.S. taxpayers, who hold 18 percent of the bank.

Spotted ‘Excesses’

At an April hearing before the Financial Crisis Inquiry Commission, Rubin defended his role at Citigroup, where he met with clients and advised on topics including strategy and management. He said he spotted “market excesses” prior to the crisis and predicted they would lead to a “cyclical downturn” at “some unpredictable point.” He didn’t remember learning about the firm’s collateralized debt obligations until 2007. Losses on the mortgage-linked instruments later crippled the bank.

Farallon and Taconic were founded by former Goldman Sachs Group Inc. partners Thomas Steyer and Frank Brosens, respectively. The pair worked with Rubin in the bank’s risk arbitrage department. Rubin stepped down as Goldman Sachs’s co- chairman in 1993 and was sworn in as Treasury secretary in 1995.

The New York Times previously reported Rubin’s work for Centerview.

To contact the reporter on this story: Donal Griffin in New York at Dgriffin10@bloomberg.net.

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