Microsoft Co-founder, Paul Allen has just ventured into the banking industry. 

http://seattlepi.nwsource.com/business/308499_vulcan22.html

http://www.financialnewsus.com/index.cfmpage=ushome&contentid=2447428161&uid=9807-5803-412211-750853 

Allen’s company is teaming up with an Atlanta-based private-equity investment firm to form a joint venture called Vulcan Banker’s Group LLC. According to Vulcan Capital’s David Capobianco, the group will consider three types of investments; troubled banks, impaired real estate loans and unusually well-run banks in the
Southeast U.S. 

 Vulcan’s partners have had some significant experience in the business, with a collective 150 years in the banking industry, and have had some notable successes as well, including an impressive turnaround of one community bank, Flag Financial Corp., from $500 million to $1.8 billion.

It sounds like this banking venture could be very promising for Paul Allen, and it struck me how much Allen’s Vulcan has changed during the last few years.

  In 2003 after a series of losses, Paul Allen began to re-assess his business strategies, and publicly resolved to make some radical changes. http://www.businessweek.com/magazine/content/04_18/b3881106_mz020.htm?chan=search  

Allen started out by replacing one seriously overworked finance guy with a brain trust of experienced, Ivy League business wizards who oversee his multibillion dollar investment portfolio.

See…http://capital.vulcan.com/template.aspx?contentid=27   

Since then Allen’s Vulcan has renovated its holdings, sloughing off under performing businesses and replacing them with steady, solid, almost boring investments in oil pipelines, insurance, real estate (and now banking). 

 …Which brings me to this article I saw recently on Paul Allen’s Charter Cable Company.    Paul Allen’s Charter Communications, one of the top cable companies in the
U.S., has had its share of problems in years past, but it was reviewed and even recommended last month by Jim Cramer from Mad Money on CNBC due to its recent ability to restructure its debt load.  

 See…http://seekingalpha.com/article/27900  

http://media.seekingalpha.com/article/28120  

http://www.thestreet.com/_googlen/funds/stoptrading/10341294.html?cm_ven=GOOGLEN&cm_cat=FREE&cm_ite=NA

 The biggest asset Charter has, though, is its Chairman, Paul Allen:  

From Stltoday.com : “In an unusual step, Allen commented on Charter’s results in a news release on quarterly results issued Wednesday. Allen said he is “bullish on the prospects of cable in general,” and said Charter has made “significant progress in improving its operations.” ” *  

Deep-pocketed Allen is devoted to Charter, and has a vested interest in its success. Charter has long been the cornerstone of his “Wired World” dream, something he’s envisioned since the 70’s.

 See…http://www.amazon.com/gp/reader/0446527394/ref=sib_dp_pt/002-9973172-0753609#reader-link(“Inside Out: Microsoft—In our own words.” P.5) 

 When Charter was going through its most difficult challenges in 2003, Allen loaned the company $300 million dollars of his own money rather than see it fail.   http://www.cedmagazine.com/toc-bbdirect/2003/20030416.html  

And it looks like whatever happens, Allen will be there to see it through.

 I once convinced a guy to buy Charter—well, sort of.  

 A few years ago I was doing some research on Paul Allen and checked out a few magazine articles from our local librarian.   The guy had just read the biography of Allen that had come out in 2003, and because of it had a less than favorable view of the Microsoft Co-founder, an opinion which he subsequently expressed to me.  

If you’ve read this blog for any length of time, you know that I have a few ideas of my own on the subject, and so we had a lengthy, friendly but lively discussion. 

 A few years later I saw the same librarian and recognized him. I was about to say something like, “I know you don’t remember me, but…” …..when he blurted out—“I have Charter stock!”  

Now, Charter was having a few problems at the time, so I proceeded with caution. 

“Is that a …good….thing?” I asked. “Well,” he said, “I know that the company is not doing well right now, but you just have to have faith that Paul Allen is going to turn things around.” 

 I was floored. During our last discussion the guy was really negative about the Microsoft Co-founder, and here he was expressing undying loyalty to him!    What happened? 

 “Well,” he said, “After I talked to you, I started asking around about Paul Allen and did a little research of my own on the guy. What I discovered moved me to go out and buy Charter stock.” 

 Well, o.k., so maybe I can’t take all the credit here. The truth is, that we never even talked about Charter*1 during that first conversation. He made his decision based upon his own research, and if he had asked around about Paul Allen where he worked, he probably didn’t have to look far to find an Allen fan—the Allen family has always been very generous to the libraries.  

But at least maybe I got him to take a second look, you know? 🙂  

….Which is not such a bad idea—to take a second look, I mean—at Allen, at Vulcan….maybe even at Charter. You have to do your own research, of course, but you might want to try it and see what you come up with.  You never know what could happen…..   http://www.snopes.com/photos/people/microsoft.asp

____________________________________________

* Charter growth reflects bundling of services By Jerri Stroud
ST. LOUIS POST-DISPATCH
02/28/2007

 *1 http://finance.google.com/finance?q=CHTR  

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