WL Ross & Co. prepares for Wilbur Ross’s potential departure for government

  • Ross named commerce secretary; now awaits confirmation
  • WL Ross & Co. already had succession plan in place
  • Fundraising could be challenging without Ross

WL Ross & Co., the eponymous firm formed by Wilbur Ross, is preparing for its founder’s potential departure for a role in the administration of President-elect Donald Trump.

Ross was asked to serve as commerce secretary, WL Ross & Co. said in a statement Wednesday. The appointment still must be approved by the United States Senate.

“Once the confirmation process is complete, it is typical that the named individual relinquishes their position so that he or she can focus on the new role,” according to the statement provided by Jeaneen Terrio, spokeswoman for Invesco, which owns WL Ross & Co. “We have been planning for this eventuality for some time and are working to ensure the smoothest possible transition for the business.”

In 2014, WL Ross & Co. named two executives — Stephen Toy and Greg Stoeckle — co-heads with day-to-day control.

Ross, who turned 79 this week, became chairman and chief strategy officer. Toy has worked at WL Ross since the firm’s inception and is chairman of the investment committee. Stoeckle joined the firm from Invesco, where he was president and managing director of Invesco Senior Secured Management Inc.’s leveraged-finance business.

Some limited partners see Wilbur Ross as the driving force behind WL Ross, which could make future fundraising challenging, sources told Buyouts. “[We] would look at it as a weakness versus [the] last fund,” one LP said about Ross’s departure.

The firm had been talking to LPs about raising its sixth flagship fund, which was expected to target $2 billion to $3 billion, Bloomberg reported in 2014. Whether Fund VI is officially in the market is unclear.

WL Ross & Co. had some trouble hitting target with Fund V, which eventually closed in 2012 on $2.2 billion. It included $640 million from external investors and the balance in separate accounts and committed co-investments. Fund V had been targeting $4 billion, according to an Oregon Investment Council report.

The firm in August also weathered regulatory pressure, settling 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 the SEC’s findings.

Ross’s net worth is estimated at $2.5 billion, according to Forbes.

Action Item: Check out OIC’s investment memo on WL Ross & Co. here: https://www.oregon.gov/treasury/Divisions/Investment/Documents/OIC/OIC%20Meeting%20Schedule,%20Agendas%20and%20Mintes/OIC.PUBLICBOOK-SECURE.102710.pdf

Billionaire investor Wilbur Ross, chairman of Invesco Ltd subsidiary WL Ross & Co, departs Trump Tower after meeting with U.S. President-elect Donald Trump in New York on Nov. 29, 2016. Photo courtesy Reuters/Lucas Jackson