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Opinion
Matt Levine

How Bad a Private Equity Investment Was Nuveen Investments?

I fell a bit down the rabbit hole of Nuveen Investments this morning, spurred by Felix Salmon's puzzling over the cash flows. 

I fell a bit down the rabbit hole of Nuveen Investments this morning, spurred by Felix Salmon's puzzling over the cash flows. The puzzle is this:

This particular puzzle seems to be solvable through a series of complicated and not entirely public moves, of which the most important is that Madison Dearborn gets "$600 million or so" of cash outside of the purchase price, including Nuveen's balance sheet cash and the purchase price for some other side items. So the private-equity investors are getting back around $2.4 billion of their $2.7 billion; combine that with an earnout, another side investment and the fact that Madison Dearborn itself bought out a co-investor's stake at a discount during the crisis, and Madison Dearborn seems to have done OK.