Capitalising on the Euro Zone Crisis: Wilbur Smith Hits The High Note
Capitalising on the Euro Zone Crisis: Wilbur Smith Hits The High Note
US billionaire Wilbur Ross has sold his entire shareholding in Bank of Ireland for nearly half a billion euros, trebling the value of the investment made during the peak of the Euro zone crisis. Ross had indicated that he will now sell the 5.5 percent stake 3 years following his pioneering investment sustained the Bank of Ireland. The stake was sold at just below 0.33 euros per share.
76 year old Ross has always been in the news for making something out of nothing. He purchases out of favor assets from banks to textile firms and joins many big investors to juice significant profits at the right time. Bailing out European banks has become the mantra for gaining riches when opportunity strikes. Ross was reported by prominent news agencies as responding that the sale was made because he had become too concentrated in banking. He reiterated that he remains confident in the bank and Ireland's future.
One thing is for sure. Geniuses like Ross who have converted crisis into opportunity will always succeed. Take the case of Charles Maurice de Talleyrand-Périgord,the French diplomat who worked through the regimes of Louis XVI, several governments for the duration of the French Revolution and then Napoleon, as well as Charles X and Louis-Philippe.
Talleyrand converted misfortunes of the regime he served to opportunities for himself. While some see him as versatile and talented, others chastize his betrayal of the various regimes he served and the masters he obeyed. Either which ways, Talleyrand even gained in monetary terms during the French Revolution. Taking advantage of historical events to mint fortunes is not new. But it is also not very easy.
Ross's fund specialises in distressed assets. This fund was a group of North American investors who had purchased a 35% stake afer Ireland signed the EU/IMF bailout. The debt ravaged country received crucial resources from Ross's fund. Ross is now on the lookout for similar distressed assets in other nations such as Greece, Spain, Italy and Portugal.
Bank of Ireland of course has taken the sale of the stake a little hard. Bank of Ireland's shares were down 3.2% following the stake. Ross's 1.8 billion shares have been purchased by existing shareholders and other investors with Deutsche Bank acting as the sole book-runner.
Ross had a stake of 9% before cashing out as each share was sold for triple the value it was purchased for. Betting on recovery is not an easy game. Sometimes you are right. At other times, you are wrong. The stakes were high when Ross also got into British banks. Investors from Abu Dhabi and Qatar have also made more than 1 billion pounds while betting on Barclays when the bank was in need of cash in 2008.
With new angles and changing equations, taking advantage of distressed economic situations to make a quick buck is a task best left to geniuses like Ross.
