Buyers of Ross’s BofI shares the real story

Understandably enough, most of the attention around Wilbur Ross's departure from Bank of Ireland has focused on his reasons for exiting. New rules about how many bank boards any one person can sit on seem to represent a flimsy enough explanation and only serve to encourage speculation he has gone cold on the Irish recovery story.

It is encouraging then to hear Ross (inset) may be about to stick some money back into the market via a real estate joint venture with Cardinal Asset Management. Although given Ross's penchant for seeing value where others don't, it seems out of character for him to be a latecomer to the Irish commercial property party.

Rather than obsess about why Ross sold, it might actually be more productive to focus on who bought his shares. The breakdown of the purchasers by geography and investment strategy would speak volumes about wider perceptions of Ireland's fortunes. Ross, after all, is only one man, albeit with a better view of the Irish landscape than most via his seat on the board of Bank of Ireland.

The deal is not yet cold and the detail of who bought Ross’s shares will emerge slowly. If his place has been taken by long-term institutional investors it will be a vote of confidence in the Irish recovery that should in theory eclipse the departure of a self-confessed short-term investor in distressed assets. It would also be a vindication of the Government decision to sell a stake in the bank to Ross in 2011 when others feared to tread in the Irish market. His replacement with long-term investors prepared to accept more modest returns would be desirable.

But, by the same token, if the incoming investors are shown to be of the “bigger fool” variety, then the market will have told us something we probably don’t want to know about the strength of the recovery and how it is perceived.