Firms & Funds

Commerce Secretary Ross to sell LP stakes in secondary deal

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Wilbur Ross, WL Ross & Co., private equity, SEC, Donald Trump, U.S. presidency, cabinet, U.S. Commerce Department
Billionaire investor Wilbur Ross, chairman of Invesco Ltd subsidiary WL Ross & Co, departs Trump Tower after a meeting with U.S. President-elect Donald Trump in New York, U.S., November 29, 2016. Reuters/Lucas Jackson - RTSTWGL
  • Wilbur Ross confirmed as commerce secretary last year
  • Vowed to divest from 80 holdings
  • Has interests in numerous WL Ross funds

U.S. Commerce Secretary Wilbur Ross is selling a bundle of PE-fund stakes in a private deal valued at about $25 million, sources told Buyouts.

The buyer is Siguler Guff, sources said. That couldn’t be officially confirmed as spokeswomen for Siguler Guff and WL Ross declined comment.

Ross, confirmed as commerce secretary last year, said in 2017 he would divest his holdings in 80 entities to avoid conflicts with his role in the U.S. government.

His financial disclosure form filed last year showed LP interests in numerous WL Ross & Co pools, the eponymous firm he founded, led and left after joining the government. In July, Ross pledged to sell his interests in private equity funds after being reprimanded by the Office of Government Ethics for failure to divest assets in a timely manner, the Washington Post reported in July. 

Generally, senior partners at PE firms contribute a portion of their wealth to their funds, known as GP commitments, ranging from 1 percent to the market high of 10 percent.

A spokeswoman from the Commerce Department did not respond to requests for comment. 

Ross raised five funds with WL Ross & Co, including Fund V, which closed on $2.2 billion in 2012. That fund had trouble hitting its target, and the total included only $640 million from external investors with the balance in separate accounts and committed co-investments.

The firm in 2016 settled SEC charges of improper disclosure around fee-sharing agreements. WL Ross & Co agreed to pay a $2.3 million civil penalty, and it voluntarily reimbursed LPs $11.8 million in management fees and interest. The firm did not admit or deny wrongdoing.

The firm in 2014 named two co-heads, Stephen Toy and Greg Stoeckle, preparing for Ross’s eventual withdrawal from day-to-day control.

Siguler Guff, meanwhile, raised at least about $135.8 million for its Secondary Opportunities Fund as of January 2017, according to a Form D filing. The firm’s secondary strategy is led by Managing Director Anthony Cusano.

Action Item: Check out Wilbur Ross’s financial disclosure form: https://bit.ly/2GdumNZ