) -- Miami Dolphins owner and New York real estate mogul Stephen Ross is running out of time in his bid to invest in struggling banks and may soon have to return $1.1 billion he raised for the purpose via an investment vehicle called

SJB Escrow Corp


Ross and other top executives at

Related Cos.

, which owns New York's Time Warner Center, attracted the money from big name hedge fund investors like David Einhorn's

Greenlight Capital


Maverick Capital


Elliott Management

in February 2010 to invest in struggling banks, and must return the money in August if it doesn't make an investment, according to a person close to Related Cos.

Dolphins Owner Ross may drop his bid for banks.

"They've been a very disciplined non-buyer and haven't been able to deploy their money," says John Douglas, partner in the Financial Institutions Group at Davis Polk.

An SJB spokeswoman and a spokesman for Greenlight declined to comment. Spokespeople for Maverick Capital and Elliott Management did not respond to requests for comment.

While there are lots of tiny banks that need capital, SJB CEO Jeff Blau indicated in a

Bloomberg Television

interview in January the firm wants to make a multibillion dollar investment. Troubled bank deals of that size are scarce, dealmakers say.

What's more, traditional banks have repaired their balance sheets and are able to take advantage of scale to justify offering a higher price than a vehicle like SJB would be willing to pay, according to one investment banker.

Among the banks eyeing potential acquisitions are

M&T Bank

(MTB) - Get Report


U.S. Bancorp

(USB) - Get Report



(BBT) - Get Report


"Many of the larger companies that have been subject to some distress have been addressed and recapitalized already or acquired and so we think there are a lot of banks that need capital and will need capital in the coming years, but many of them are smaller--below $5 billion

in assets," says Brian Sterling, co-head of investment banking at Sandler O'Neill.

Indeed, the number of banks on the "problem list" of the Federal Deposit Insurance Corp. grew to 884 in the fourth quarter of 2010, but the total assets of that group adds up to just $390 billion.

SJB was one of the bidders for ING's online banking business, but has backed away from that deal, according to a


report earlier this month, which stated that

General Electric

(GE) - Get Report

's GE Capital unit and

Capital One Financial

(COF) - Get Report

are the most recent bidders.

Ally Financial


CIT Group

(CIT) - Get Report

have also eyed the ING business, but, like SJB, "have either ended talks or put them on hold," Bloomberg reported. Other companies auctioning off large pools of assets in the U.S. include

Royal Bank of Canada

(RY) - Get Report




, dealmakers say.


Written by Dan Freed in New York


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