Everyone and their brother has been talking about the declining stock prices of the major financial firms following the credit 'crisis' and continuing write-downs. One has to ask themselves, then, as an investor, when do you bet on the up-tick in the sector? TPG (The Financial Group) Financial Partners is apparently indicating that that time is now with, what it hopes will be, a $7 billion bet.
With $100 million already raised, TPG says that it will seek both minority and controlling stakes in financial firms that have been hurt by the latest woes in the financials sector. With many still expecting things to get a lot worse, their timing may be flawed, but the strategy does make sense on the whole.
Another interesting tidbit in this story is where the money is coming from. One of its investors is the Government of Singapore Investment Corp.'s private equity arm - it's a little concerning to see foreign dollars flowing into such deals; is foreign ownership of America's banks a good long term prospect for Americans. Unfortunately, with Americans' debt levels at all-time peaks and savings rates and all-time lows, it doesn't seem as though the money is going to come from home. America's appetite for consumption may result in a very expensive bill at the end of the day with the rest of the world cashing-in.
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