Billionaire Wilbur Ross, the manager of Invesco Private Capital, is a well-known investor in distressed assets and notorious for restructuring companies and investing in leveraged buyouts and distressed businesses. His fund, Invesco Private Capital has an equity portfolio worth almost $1.47 billion, invested primarily in the Financial and Basic Materials stocks. Mr. Ross is also investing in European markets, and that’s why in a recent intervention on CNBC he was asked to comment on the yesterday’s decision of the European Central Bank to move to a negative interest rate of -0.1%.
“I think it is a very interesting experiment and I think it will work, the idea of negative interest rates, and finally a central bank has done it. ” Mr. Ross said.
Mr. Ross also listed some of his bets in the European Markets, such as the Eurobank in Greece, Bank of Ireland (ADR) (NYSE:IRE), Virgin Money and others. In addition, he mentioned a rail cart leasing company, VTG AG, based in Germany, which they also hold.
However, as the host of the program pointed out, the negative interest rate imposed by the ECB might play a “push and pull” effect, because many regulators impose banks to hold money. Mr. Ross considers that the ECB move will work because it has already worked well in Japan.
“[...] by working well, to me, it means changing the expectations of the public about inflation. Japan had gone through these three decades of deflation, and suddenly Mr. Abe [Shinzō Abe, the prime minister of Japan] came along and partly through jaw boning, but also partly through very tangible actions changed the whole psychology. I think that’s what’s needed in Europe, and, frankly, here, is a change in psychology,” Mr. Ross said.
In addition, Mr. Ross said that they will probably invest more in Europe, because he considers that the environment there is getting safer to invest.
Watch the full video below:
In the equity portfolio of Invesco Private Capital, the largest holding in terms of value is represented by Navigator Holdings Ltd (NYSE:NVGS), of which the fund owns 23.27 million shares, worth $605.03 million, the stake amassing over 40% of the 13F portfolio of the fund. The stock of the company has been booming since the beginning of the year, and has surged by almost 190%. Mr. Ross is also bullish on EXCO Resources Inc (NYSE:XCO), in which Invesco has raised its exposure by around 60% during the first quarter to 51.10 million shares. The third-largest holding in terms of value is represented by Assured Guaranty Ltd. (NYSE:AGO), of which Invesco reported holding 10.85 million shares, down by 27% on the quarter.