The federal government isn’t the only potential buyer eying U.S. banks drowning in debt.
Just as he did in the S&L crisis, billionaire Gerald J. Ford is poised to reap another fortune.
Ford, a bundler for John McCain’s presidential campaign, made a bundle during the 1980s S&L crisis by buying beleaguered thrifts, correcting their cash flow and selling them for large profits.
Now he is heading a private equity firm called Flexpoint Ford LLC, which has raised more than $1 billion to buy banks crippled by the credit crunch.
“I have been in the business for a long period of time, and I would say it is more troublesome than I have ever seen it,” he told American Banker. “But that begets some opportunities.”
A major difference between today’s crisis and the earlier wave of thrift failures is that today there are fewer healthy banks able to acquire the sick institutions, he said.
Ford, who is unrelated to the president or automotive dynasty, bought his first bank in 1975. He bought 29 more in the ensuing two decades, consolidated them as First United Bank Group and sold the company to Norwest Corporation of Minneapolis for $495 million.
Another investment, First Gibraltar Bank, was acquired by BankAmerica of San Francisco for $110 million. Ford’s partner in the venture was Revlon Chairman Ronald Perelman. Ford and Perelman also were fellow investors in Golden State Bancorp, bought by Citigroup in 2002.
More recently, he was one of the investors approached to bail out Washington Mutual, which was acquired last month by JPMorgan Chase.
Forbes lists him as No. 355 on its list of 400 richest Americans, with an estimated net worth of $1.4 billion.
Ford is a trustee of Southern Methodist University, where the football stadium is named for him. He co-chairs the college’s campaign to raise $750 million.
Although he is a big contributor and fundraiser for the McCain campaign, Ford hasn’t limited his donations to Republicans. One of the Democrats who received support from him over the years was former U.S. Sen. Bob Kerrey, now a fellow director at Scientific Games Corporation. Perelman is also on the Scientific Games board.
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