NEW YORK | While European companies and banks try to forget this annus horribilis, some US financial firms are rubbing their hands: under pressure from regulators, Europeans will have to shed up to $3 trillion in assets over the next 18 months, according to Morgan Stanley. Market dislocation on this side of the Atlantic means also a great occasion for American companies to go shopping.
This month the German Commerzbank sold $300 million in real estate loans that are backed by properties to the Blackstone Group. Buyout group Kohlberg Kravis Roberts are looking for deals in Greece, Spain and Portugal. This firm is expanding his London team from two to eight people. Wells Fargo has recently acquired $3.3 billion in real estate loans from a bank in Ireland, which is trying to raise 10 billion euros after a bailout by the EU and the IMF.
“There is clearly a restructuring and shrinking of European financial institutions,” said Timothy J. Sloan, chief financial officer of Wells Fargo, quoted by The New York Times. “Many of the assets they’re shedding are in the United States. We’re keeping our eyes and ears open for the right situations.”
Experts constantly remind that investing in Europe is not without risk.
“A big bet on European sovereign debt helped bring down MF Global, which went bankrupt on Oct. 31”,
states The New York Times. According to Reuters, Standard & Poor’s is expected to release its eagerly awaited verdict on debt ratings for 15 euro zone countries in January. As Barry Ritholz puts it,
“Santa, our largest trading partners in Europe are a mess. Their banks are filled with a different sort of subprime junk —the sovereign debt of overleveraged nations. Anything you can do to help them out of their jam would be appreciated. All we [investors] want for Christmas is to get back to break-even.”
But above all, American firms must deal with their own problems (layoffs, management reorganization and consumers’ uproar against raising bank fees). Bank of America, just sold stakes in banks in Brazil and China; airlines and automakers had an extremely turbulent year. CNN Money has produced its own chart. From a bankrupt airline to an aging camera maker, here you can find which Fortune 500 companies suffered the biggest losses.