US bank Washington Mutual (WaMu) has become the latest financial institution to turn to the private equity industry for investment in the wake of the credit crunch.
Private equity house TPG is leading the investment vehicle that has raised funds totalling $7bn (£3.56bn) to be invested in the bank.
Simpson Thacher & Bartlett, led by partner Lee Meyerson, advised WaMu on the investment. Cleary Gottlieb Steen & Hamilton partners Benet O’Reilly, Michael Ryan and Paul Shim led the firm advising longstanding client TPG, which will be contributing $2bn (£1.02bn) of the $7bn total.
Skadden Arps Slate Meagher & Flom New York partners Gregory Fernicola and William Rubenstein are advising the arrangers Goldman Sachs and Lehman Brothers.
The move comes after WaMu shares fell by 80 per cent in the year to last Friday, significantly affected by the collapse of the sub-prime mortgage crisis.
WaMu is the latest bank to receive outside investment since the credit crunch gripped the markets last summer.
Earlier this year (1 February) The Lawyer reported that Cleary and Sullivan & Cromwell client Citigroup made a $19bn (£9.65bn) equity offering. The deal saw sovereign wealth funds Government of Singapore Investment Corporation, the Kuwait Investment Authority and Prince Alwaleed bin Talal bin Abdulaziz Alsaud invest in a $12.5bn (£6.35bn) placement of the total offering.