Manhattan real estate mogul Stephen M. Ross has quietly raised more than $1 billion so he can branch into banking.
Ross, whose Related Cos. built the ritzy Time Warner Center in Midtown, is hoping to leverage his expertise in commercial properties to buy banks saddled with construction loans and other debt.
Sources told The Post that Ross drummed up roughly $1.1 billion for a so-called blind pool investment vehicle called SJB Escrow Corp.
One major investor is Greenlight Capital, the hedge fund run by David Einhorn, who gained fame in 2008 for betting — correctly — that investment bank Lehman Brothers was in worse financial shape than it was acknowledging.
Other investors include Paul Singer’s hedge fund Elliott Management Corp. and Lee Ainslie’s Maverick Capital.
Representatives for the funds either declined to comment or did not return calls.
SJB, named after Ross and his Related Cos.’ partners Jeff Blau and Bruce Beal Jr., is said to be aiming to buy one or several banks worth as much as $12 billion.
Deutsche Bank handled the private sale of SJB shares earlier in the week, sources said.
Ross, who also owns the National Football League’s Miami Dolphins, is betting that his expertise in real estate, including distressed mortgages and construction loans, will allow him to be a competitive player in the growing market to buy banks.
A spokeswoman for Ross declined to comment.
Ross’ bank investment entity has received bank charter approval from the Office of the Comptroller of the Currency and the Federal Deposit Insurance Corp.
Ideally, regulators would put failed banks in the hands of healthier banks. But with the economy still swooning, regulators such as the FDIC and OCC have been keen to try to offset the costs of what is expected to be a ballooning number of bank failures by inviting alternative investors to bid on bank deposits and assets.
Nearly 100 banks failed last year and hundreds more are expected to go under over the next several years. Regulators are trying to strike a balance between guaranteeing they have enough capital to tackle bank losses and making sure that private equity and hedge funds aren’t purchasing assets for the wrong reasons.
Ross’ outfit is expected to be viewed as a serious buyer because SJB will be able to buy deposits as well as souring mortgages and distressed properties.
Under rules of the “blind” investment pool, Ross has about 18 months to identify his first investment, but unlike other blind pools, his investment group does not have to vote to approve purchases, sources note.
SJB is among a number of blind pools being set up to purchase banks in recent months.
