Private Equity Circles Euro-Bank Market

NEW YORK (TheStreet) -- U.S.-based private equity firms JC Flowers & Co. , WL Ross & Co. and KKR (KKR) are eying European bank deals.

"A lot of the private equity groups are really international now. Some have been looking at Spain. We really haven't been, but some have," said James Lockhart, vice chairman of WL Ross & Co. "The small banks all over Europe need capital and I would think there will be more deal activity next year."

WL Ross & Co. has been gradually acquiring stakes in distressed banks.

In the U.S., it has acquired stakes in BankUnited, Cascade Bancorp (CACB) , Sun BanCorp (SNBC) and First Michigan Bankcorp.

WL Ross is also bidding in Europe, including Irish bank EBS Building Society and plans to pursue acquisitions of banks in Northern Europe, according to a video Lockhart did with TheStreet.

"In the U.S. our strategy is to create super community banks, if you will," said Lockhart in a phone interview. "In the UK, our strategy is to partner up with a brand name credit company and we are looking at acquiring branches and assets from banks that are being forced to divest them by the government."

KKR co-founder Henry Kravis also said the form is in discussions with several European banks. During Goldman Sachs (GS) US Financial Services Conference 2010 Kravis said that there were many opportunities to invest in both US and European financial institutions, particularly in Germany.

"There are opportunities today and we are having conversations today with several financial institutions that need capital," Kravis said.

--Written by Maria Woehr in New York.



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