Described as "a vulture, albeit a well-dressed one," Wilbur
Ross is also "one of the best bottom feeders in the business,"
according to no less an authority than a fellow billionaire,real
estate magnate Leonard Stern.
These comparisons may seem unflattering, but they're actually
high praise. Ross, 75, is chairman of WL Ross & Co., among
the largest and most active firms specializing in restructuring
financially distressed companies. He has built his career
oninvesting in companies that are trading belowbook value ,
something any investor can look for.
"You get paid for taking risk that people think is risky," Ross
has said. "You don't particularly get paid for taking actual
Wilbur Ross' Biography
The son of a judge, Ross grew up in New Jersey and attended a
Jesuit military academy in Manhattan. While there, he was captain
of the rifle squad, which permanently damaged his hearing.
Colleagues say he speaks very little and in a near whisper when
He attended Yale University with the intention of becoming a
writer but found his true passion during a summer job at amoney
management firm in New York. Describing himself as "a bit of a
bookworm," Ross said enjoyed spending hours at the library
researching companies. After earning an MBA from Harvard Business
School in 1961, Ross got a job atWall Street money manager Wood
Struthers & Winthrop.
He spent the next 15 years working on the company's
troubledventure capital investments . Although some failed, he
got a thorough lesson in dealing with banks, creditors and
courts. By 1976 he had parlayed this expertise to aspot leading
the worldwidebankruptcy advisory practice at Rothschild, where
his team assisted in the restructuring of more than $200 billion
in liabilities around the world.
By 2000, Ross had established his own company with $440 million.
Now owned by Invesco, WL Ross & Co. has more than $7 billion
||Ross built his career on investing in companies that
are trading below book value, something any investor can
Wilbur Ross' Investing Strategy And Big Wins
After forming his own company, Ross picked up numerous steel and
mining ventures that had gone bankrupt. He sold his steel
holdings for $4.5 billion in 2005 to ArcelorMittal, making $2.5
billion for WL Ross and $300 million for himself.
Ross began investing in the banking sector after the financial
crisis, and his firm was part of a group that bought
from the FederalDeposit Insurance Corp. He also spent money on
troubled banks that neededcash but weren't bankrupt, such as New
Sun Bancorp (Nasdaq: SNBC)
. At the time, he said he chose them because they were trading at
big discounts to their book values. His firm still holds large
positions in those companies.
Ross attributes his success to keeping things simple and doing
them well. "I think good ideas really are simple ideas," he has
said. "I'd rather back a mediocre idea that was brilliantly
executed than a brilliant idea that was poorly executed." Ross
has also said that one must manage not only risk, but one's own
emotions: "To be successful, you have to be able to keep your
emotions separate from the decision-making process."
Wilbur Ross' Portfolio: What's He Holding Now?
His current portfolio is still heavilyweighted to financial
services (73.7%), followed by energy (21.6%), technology (3.6%),
) (0.9%) and health care (0.2%). However, his recent moves seem
to imply a shift away from finance and technology and into health
care. He has reduced his holdings in
Assured Guaranty (
and BankUnited and sold out of
Facebook (Nasdaq: FB)
Zynga (Nasdaq: ZNGA)
Groupon (Nasdaq: GRPN)
. His most recent buys include
LipoScience (Nasdaq: LPDX)
Select Medical Holdings (
Wilbur Ross' Top 10 Holdings
(Sources: GuruFocus, Google Finance)
Action to Take -->
Alot of Ross' fundamental strategies make for timeless investing
advice: keeping things simple, risks in perspective and emotions
in check. However, you can't invest in distressed companies and
not expect some stress along the way. While it doesn't appear on
the list of top public holdings, WL Ross has made largeprivate
equity commitments to the international shipping sector. He made
a very persuasive argument that while the sector is temporarily
distressed, it has long-term potential. An investor wanting to
follow Ross' lead in marine transport might consider the
Guggenheim ShippingETF (
; a single-stock buy might include the highly rated
Kirby Corp. (
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