Ever wonder what happened to Michael E. Martin, former head of the financial institutions group at UBS Investment Bank? Well, the 53-year-old banker has turned up at private equity shop Warburg Pincus as co-head of the financial services group, alongside David Coulter, 61.

Martin made the move March 30 with no public announcement from Warburg Pincus. Perhaps with good reason: Martin's hire looks like it was made to bolster a financial institutions group that has not had much luck of late. Aside from Warburg's much publicized stumbles with monoline insurer MBIA Inc., the firm will only break even on its $250 million investment in auto finance company Sixth Gear Solutions Corp. last year.

Martin joined Warburg from Brooklyn NY Holdings LLC, the private investment fund he set up to advise the Lerner family in February 2006. Before that, he led UBS' financial institutions team, and was a high-profile defector from Credit Suisse Group in 2002, soon after its merger with Donaldson Lufkin & Jenrette.

Over the years, Martin, who started his career as a lawyer at Wachtell, Lipton, Rosen & Katz, made a name for himself by advising such clients as Wachovia Corp., National Commerce Financial Corp. and MBNA Corp. Given that background, it may be that Warburg Pincus could be readying itself to invest in banking, an area that several private equity firms, including Blackstone Group LP and Carlyle Group, see as fertile ground.

Warburg has a history in the sector, having bought a 20% stake in Mellon Bank Corp. in 1988 and a 12.5% stake in Dime Bancorp in 2000. The PE firm had a 30% compounded annual return on the Mellon investment and turned its $238 million investment in Dime into $750 million less than two years later.

But the firm is offering little insight into why it hired Martin. "Financial services is clearly an important part of our highly diversified portfolio, and that makes Michael's expertise very valuable to us," says a Warburg representative.