The newly merged Flagship Credit Acceptance and CarFinance Capital will be led by Flagship CEO Michael Ritter, private-equity firm Perella Weinberg Partners, which oversees both companies, said last week in announcing the deal.
But Ritter’s appointment raises a question about what’s next for CarFinance Capital CEO Jim Landy.
The combined company will take the Flagship name, although both the Flagship and CarFinance brands will be offered in the market. Flagship Credit Acceptance is based in Chadds Ford, Pa.; CarFinance Capital is in Irvine, Calif.
Perella Weinberg, based in New York, wouldn’t say whether Landy will stay on. In a written statement last week, David Schiff, a partner at Perella Weinberg, acknowledged Landy’s accomplishments.
“I would like to thank Jim Landy for his valuable contributions in establishing CarFinance as a leading indirect and direct lender to the auto finance industry,” Schiff said.
Landy, through a spokesperson, declined to comment.
Landy, 53, has been through many transitions.
He launched CarFinance Capital, with backing from Perella Weinberg, in May 2011. Prior to that, he was CEO of Fireside Bank in Pleasanton, Calif.
While CEO of subprime auto lender Triad Financial Corp., a post he held from 1989 to 2005, Landy started the direct-to-consumer lending channel RoadLoans. During Landy’s tenure at Triad, the company was bought by Ford Motor Credit Co., in 1999, and by an investor group, in 2005, at which time Landy left. Santander Consumer USA bought Triad’s successor company in 2009 and offers direct loans through RoadLoans.com.
$2 billion in assets
According to Perella Weinberg Partners, the merged Flagship and CarFinance will have assets of more than $2 billion. The two companies combined originate about $1.2 billion annually in auto loans via 7,700 mostly new-car dealerships nationwide, Perella Weinberg said.
Perella Weinberg bought control of Flagship in 2010. Flagship and CarFinance both offer auto loans to customers with an average credit score of about 600, industry sources said. Many lenders define subprime customers as those with credit scores of 620 and below.
At the end of October, CarFinance had a managed portfolio of outstanding loans of about $897 million; Flagship, about $908 million.
Flagship’s Ritter has a long history with the brand, albeit with a succession of owners.
He was Flagship’s CEO from 1997 to 2001, but left after Itochu International, the U.S. subsidiary of a large Japanese trading company, sold the company to Wells Fargo Financial Services. Wells Fargo retired the Flagship brand name.
Wells Fargo sold the business to a private-equity firm in 2006. Ritter rejoined the company at that time and re-launched the Flagship name.