WL Ross raises $4bn for Fund IV

Drawing on the resources of its parent company Invesco, WL Ross & Co. has raised a distressed investment vehicle three times the size of its predecessor.

Distressed investment-focussed WL Ross & Co. has raised $4 billion (€2.7 billion) for its fourth fund, surpassing its $2.5 billion target. The fund is significantly larger than its predecessor, which closed on $1 billion in August 2005.

Wilbur Ross

“We launched this fund, our largest to date, some months ago in anticipation of the turmoil that is now providing us with a wide range of distressed investment opportunities,” chairman Wilbur Ross said in a statement.

The fund is the first the firm has raised since it was acquired by asset management firm Invesco, formerly AMVESCAP, in July 2006. Invesco paid $375 million for the private equity firm, which was then folded into its private capital arm. After the acquisition Wilbur Ross took charge of the entire division.

It used to be that a few billion dollars was a large private equity fund. Now it takes $10 billion to get to that level.

Wilbur Ross

Ross has said he wants to take advantage of Invesco’s wider investor base to raise significantly larger funds and move his firm into a new market segment.

“It used to be that a few billion dollars was a large private equity fund. Now it takes $10 billion or $20 billion to get to that level,” he reportedly said during a conference call shortly after WL Ross was absorbed by Invesco. “The marketing force [at Invesco] will help to provide us with the counterbalance to the megafunds that are starting to spring up all over the place in the private equity community.”

Ross also said at the time that he also hoped to leverage Invesco’s “global infrastructure support” to enter new markets, such as Asia. Last July, WL Ross paid $100 million for Vietnamese cotton textile and clothing manufacturer Phong Phu Corporation. In October 2006, the firm made its first investment in India with the $37 million acquisition of textile manufacturing business OCM.

In October 2007, the firm paid around $500 million for the loan servicing division of American Home Mortgage.

The new fund brings WL Ross’s assets under management to around $7.5 billion.