Ross Raises $4B To Take Advantage Of Distress

WL Ross & Co., the firm run by legendary distressed-company investor Wilbur Ross, closed its fourth fund recently, joining a host of other firms that have raised or are in the process of raising funds to invest in financially troubled companies and distressed debt.

The unit of money-management company Invesco Ltd. closed WLR Recovery Fund IV LP at $4 billion. “We launched this fund … in anticipation of the turmoil that is now providing us with a wide range of distressed investment opportunities,” Ross, the chairman of the firm, said in a statement. Ross did not return a call seeking comment.

W.L. Ross is the latest in a long list of firms poised to take advantage of a sinking economy after remaining relatively quiet during the easy-credit buyout boom. At least 25 firms have hit the market or are expected back in the next 12 months to raise distressed debt funds, and 12 firms are raising or are expected to raise funds geared toward restructuring troubled companies, according to placement agent Probitas Partners.

Some recent firms poised to pounce include KPS Capital Partners, which closed its $1.2 billion KPS Special Situations Fund III LP last year after only two months on the market; the New York-based shop specializes in turning around distressed middle-market companies, restructurings, bankruptcies, employee buyouts and corporate divestitutres. Littlejohn & Co., the Greenwich, Conn.-based firm that invests in distressed middle-market companies across a wide variety of sectors, in March increased a $650 million fund it closed in 2005 to $850 million. Avenue Capital Group, a New York-based hedge fund sponsor raising a $4 billion fund, invests in public and private distressed and under-valued credit-related securities. MatlinPatterson, a New York-based firm with a $5 billion fund, invests in a variety of distressed securities. And Monomoy Capital Partners, a New York firm that closed a $280 million fund spring 2007, specializes in turning around struggling lower middle-market family owned businesses.—B.V.