Decisions on Bank Applications
Wilmington Trust Company
FEDERAL DEPOSIT INSURANCE CORPORATION
In Re: Wilmington Trust Company Wilmington, Delaware
Application Pursuant to Section 24 of the Federal Deposit Insurance Act for Consent to Indirectly Engage as Principal Through a Wholly-Owned Subsidiary in Investment Activities That May Not Be Permissible for a Subsidiary of a National Bank
ORDER
The Federal Deposit Insurance Corporation ("FDIC") has fully considered all available facts and information relevant to the application by the Wilmington Trust Company, Wilmington, Delaware ("Bank"), pursuant to Section 24 of the Federal Deposit Insurance Act, 12 U.S.C. § 1831 a, and Part 362 of the FDIC's Rules and Regulations, for consent to indirectly acquire through Newco, ("the Subsidiary"), up to a 37 `/2 percent interest in Camden Partners Equity Managers I, LLC, ("MM"), a newly formed Delaware-chartered limited liability company that will provide investment management services to unaffiliated, private equity funds
Accordingly, it is hereby ORDERED, for the reasons set forth in the attached Statement, that the application submitted by the Bank, is hereby approved, subject to the following conditions:
1. That the Bank maintains a "well capitalized" status pursuant to Part 325 of the FDIC's Rules and Regulations after deducting from its Tier I capital the appropriate capital charge for equity investments in nonfinancial companies, as reflected in the table shown in Section II. B. of Appendix A to Part 325, for its investment in the Subsidiary.
2. That the investment in MM be held indirectly through the Subsidiary, a single wholly owned subsidiary of the Bank organized for the purpose of holding such investment.
3. The Subsidiary and MM will:
i. Meet applicable statutory or regulatory capital requirements and have sufficient operating capital appropriate for businesses of their size and character within the industry;
ii. Maintain separate accounting and other business records;
iii. Observe separate business entity formalities, such as separate board of directors' meetings;
iv. Conduct business pursuant to independent policies and procedures designed to inform third parties that the Subsidiary and MM are separate organizations from the Bank, and that the Bank is not responsible for, and does not guarantee, the obligations of either the Subsidiary or MM;
v. Have qualified management and employees for the types of activities contemplated, including all required licenses and memberships, and comply with industry standards.
4. The Bank shall review and approve the operating plans of both the Subsidiary and MM, their scope of activities and how profitability is to be attained.
5. The Bank shall not invest through the Subsidiary more than $500,000 in the aggregate in the activities of MM and indirectly in the Camden Funds for which MM will serve as managing member without the prior written approval of the Regional Director of the New York Regional Office.
6. The Bank, the Subsidiary and MM must comply with the requirements of Section 362.4(d) of the FDIC's Rules and Regulations.
7. In the event the facts and circumstances presented or otherwise known to the FDIC in connection with this request change significantly, the FDIC shall have the right to alter, suspend, or withdraw its approval.
Dated at Washington, D.C., this day of October 2003.
FEDERAL DEPOSIT INSURANCE CORPORATION
Lisa K. Roy
Associate Director
Division of Supervision and Consumer Protection
FEDERAL DEPOSIT INSURANCE CORPORATION
In Re: Wilmington Trust Company Wilmington, Delaware
Application Pursuant to Section 24 of the Federal Deposit Insurance Act for Consent to Indirectly Engage as Principal Through a Wholly-Owned Subsidiary in Investment Activities That May Not Be Permissible for a Subsidiary of a National Bank
STATEMENT
Pursuant to the provisions of Section 24 of the Federal Deposit Insurance Act, Wilmington Trust Company, Wilmington, Delaware ("Bank"), has filed an application with the Federal Deposit Insurance Corporation ("FDIC"), requesting the FDIC's consent to indirectly acquire through Newco, a newly formed, wholly-owned, subsidiary, up to 37 'I V2 percent interest in Camden Partners Equity Managers I, LLC ("MM"), a limited liability company that will provide investment management services to unaffiliated, private equity funds. The funds will operate primarily as "funds of funds," investing in other mutual funds that invest in equity and debt securities, and, to a limited extent, in real estate investment trusts and companies holding real estate properties. These are activities that may not be permissible for a subsidiary of a national bank.
The Bank proposes to contribute to Newco capital up to $500,000, which is less than 0.1 % of the Bank's Tier 1 capital and less than .01 % of its assets. Since the Bank's investment in Newco meets the definition of a nonfinancial equity investment, the Bank will be required to deduct its investment from its Tier 1 capital in accordance with Appendix A to Part 325 of the FDIC's Rules and Regulations.
As of June 30, 2003, the Bank had total assets of $8,246,627,000. Its financial condition, future earnings prospects, and management are regarded as satisfactory. The Bank meets the definition of "well-capitalized" within the meaning of Part 325 of the FDIC's Rules and Regulations.
Neither insured state banks nor their subsidiaries may engage as principal in an activity prohibited for national banks unless consent has been obtained from the FDIC. Consent may not be granted unless the bank is in compliance with applicable capital standards and the FDIC determines that the activity poses no significant risk to the deposit insurance funds. Based on a careful review of all available facts and information, the FDIC has concluded that the proposed activity does not pose a significant risk to the Bank Insurance Fund and therefore, approval of the application subject to the conditions in the Order is warranted.
ASSOCIATE DIRECTOR
DIVISION OF SUPERVISION AND CONSUMER PROTECTION