How tough are times in Europe? American Wilbur Ross, a distressed-investment specialist, regards the Continent as a wellspring of potential deals. Fresh from performing one of the neater financial tricks in recent memory -- rolling three near-dead U.S. steel companies into an entity called International Steel Group and then taking it public for $462 million -- Ross’s firm, WL Ross & Co., is teaming up with Paris-based Investors in Private Equity to form IPE Ross. The joint venture is seeking $250 million in Europe and the U.S. to invest in middle-market European buyouts.
For Ross, 66, the European venture is a first; his New York based private equity firm has thus far invested primarily in the U.S., Japan and South Korea. He sees good prospects not only in troubled European companies but also in state-run enterprises that governments must unload to trim their budget deficits in line with strict European Union rules. “Europe is in for a little bit of a rough time, with the strong euro and the very slow economic growth there,” Ross contends.
He insisted on having a local partner, as he has with his other overseas ventures. Although Ross will chair IPE Ross’s investment committee, the joint venture will be based in Paris and run by Philippe Nguyen, who co-founded IPE two years ago after eight years spent running private equity operations at Caisse des Dépôts et Consignations and Crédit Lyonnais.
“In Europe, particularly in France, the real issue is getting deal flow,” says Ross. “Here in the States, if you’re known as a source of capital, all the investment bankers send you all their books. In Europe it’s more relationship-oriented. You generally have to get invited into things.”
