Avondale Investments LLC wins bailout work

Newsok.com
December 29, 2009
DON MECOY

An Oklahoma City investment firm is one of six nationwide selected by the U.S. Treasury Department to help manage assets as it winds down the Troubled Asset Relief Program (TARP).

"It was a Christmas gift of all Christmas gifts,” Avondale Investments LLC President Don Dillingham said Monday. "We feel very honored to have been selected.”

Under TARP, the Treasury pumped billions of dollars of capital into participating banks to stabilize the institutions and spur lending. In return, the agency gathered assets such as preferred shares, senior debt, equity warrants and other obligations. The Capital Purchase Program currently is open only to small banks and will effectively close at the end of the year.

Earlier this month, the U.S. government earned more than $1 billion in the auction of warrants to purchase common stock in J.P. Morgan Chase & Co. and Capital One Financial Corp. that the companies handed over to receive government funds.

Valuing investments one duty
The range of services Avondale Investments LLC will provide under its five-year contract will be determined in the coming months, Dillingham said.

"We’ll be acting as Treasury’s agent and making sure that the various financial institutions comply with the rules, regulations and covenants associated with that investment,” he said. "Also we’ll be valuing that investment for Treasury on a quarterly or maybe even a more frequent basis.”

The firm has expertise of financial institutions in the region, Dillingham said, and initial discussions with Treasury officials placed the firm’s responsibility on participating banks in Oklahoma and contiguous states.

"But talking to a guy from (Washington) D.C. about contiguous states from Oklahoma, that could be Utah as far as they’re concerned,” he said. "That doesn’t mean we’re going to get all of them in that geographic area.”

Avondale Investments LLC is an American Indian-owned asset management firm with experience working with small and community banks.

Dillingham, who founded Avondale in 2001, is an enrolled member of the Muscogee-Creek Nation. J.D. Colbert, who joined Avondale this year as a senior adviser, is a member of the Chickasaw Nation.

"This is an exciting opportunity for Oklahomans to play a major role to help stabilize our nation’s economy,” Colbert said. "Don and I are proud to be representing Native Americans as the only two who were selected. This is a huge honor for Oklahoma and Native Americans as a whole.”

Avondale likely will add staff to deal with the increased workload, Dillingham said.

The firm currently has six people that handle asset management.

"It’s well within reason to potentially double the staff,” he said.

Being among the six firms chosen from more than 200 submissions was gratifying and a bit overwhelming, Dillingham said.

"We kind of feel like we’ve got a tiger by the tail,” he said.