Distressed investor Wilbur Ross is interested in betting on the casino sector, according to comments made during today’s 2009 Reuters’ Restructuring Summit. The sector has experienced turmoil in the recession thanks to its high fixed costs of operation and heavy reliance on junk bonds, he said.
Ross is focused on possible investments in both U.S.-based and international casinos, and has purchased the debt of some struggling casino operators already. He hinted at a loan-to-own approach to the sector, saying his firm buys debt on the theory that a company will default.
Beyond that, Ross outlined interest in railcar leasing and Chinese energy infrastructure. “China is ahead of us in wind and solar,” he said. “They’re viewing those areas are future export industries.” WL Ross is raising a fund for such investments which is expected to have between $2 billion and $3 billion in commitments, with a 3:1 debt to equity ratio, he said.
He has also approached CIT with interest in certain assets of the troubled commercial lender “if they sell them,” he said.
Regarding investments in failed banks, he said the two sales since the implementation of the FDIC’s new rules have sold to strategic buyers. This week Ross bid for the assets of Corus Bank alongside Starwood Capital Group on Sunday September 27, he said.
Ross has been an active investor in the bank and auto supply sectors. He created IAC Group, a $5 billion revenue auto parts company, by combining Lear Corp. with Collins & Aikman. He has been very vocal about his interest in buying failed banks and purchased a stake in BankUnited FSB earlier this year alongside Centerbridge Capital and Blackstone Group.