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Christopher Flowers Finds the Bloom May Be Off

Flowers hopes, in other words, to make a lot of money at the expense of clumsy governments around the world. While this strategy has landed him on Forbes 400 list of richest Americans for three straight years, it is less clear how it has worked out for investors in his funds.

Throughout his decade-long career in private equity, Flowers' investments were up just 30% through Sept. 30, according to documents prepared for investors and recently reviewed by It is safe to assume that number is considerably lower today, given that the S&P 500 is down by more than 33% since that date.

Flowers' investments are highly concentrated. According to the investor documents (which precede the IndyMac transaction) just four banks account for roughly 80% of all the capital he has invested. In addition to Shinsei and Hypo, Flowers' other major investments are in HSH, another German bank, and NIBC, a Dutch bank. Because they are not publicly traded, they are more difficult to value. As of Sept. 30, Flowers valued NIBC at 80% of what he originally invested and HSH at 70%, according to the investor documents.

Nonetheless, Flowers has some prominent defenders, such as former Goldman Sachs Chairman John Whitehead.

" A lot of investors, in what they decide to do for the money under their direction, diversify so much that they really limit their chances of great success," Whitehead says. "Chris will place big bets on things that he believes in. I admire that quality."
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