While shareholders of Bradford & Bingley are rightly outraged at the highly dilutive restructured rights issue, there is one party that is licking its lips in delight.

TPG, formerly known as Texas Pacific, is the epitome of the turn-it-round-quick private equity investor. The group, founded by the somewhat eccentric but ultra-bright David Bonderman in 1992, relishes the misfortunes of downtrodden corporations. When most investors run to the hills, TPG is the private equity firm running in the opposite direction.

A TPG source at this year's World Economic Forum in Davos (when strutting his stuff on the dance floor) gleefully revealed with a glint in his eye that the group was actively eyeing financial institutions. This was at a time when the word “bank” was enough to send any normal investor into a cold sweat. Yet for TPG, the banks' pain was soon to be its gain.

Two months later the American turnaround giant made headlines with its $5 billion (£2.5 billion) bailout of Washington Mutual. There followed speculation of a potential tie-up with Merrill Lynch, which the American investment bank later denied. It may have denied it, but clearly the interest from TPG was there.

That should come as no surprise: the American group has a history of courting troubled banks at their most vulnerable. Since 2005, it has sunk about $4 billion into financial institutions, including Shenzen Development, a Chinese bank. It took a stake in Korea First in 1998 at the height of the Asian financial crisis and it invested in Ariel Re, the US insurer, in 2005, at the peak of the most disastrous hurricane season in the country's recent history.

For those in any doubt, this is a private equity firm with a voracious appetite for risk. Remember the investment that helped TPG, in part, to make its name in the first place: the acquisition of Continental Airlines out of bankruptcy in 1993. It sold the airline in 1998, making ten times its money.

Investments in banks make particular sense now. Financial institutions are already highly leveraged, so there is no need for financing, which private equity would normally require as part of full-scale buyout.

Yet with buyouts off the table thanks to the credit crunch, stake- buying is all the rage and what better sector to focus on than the troubled banks themselves? The deal with B&B is a classic example. By agreeing to buy the shares at a knockdown price of 55p, TPG is effectively getting a 23 per cent stake in Britain's biggest buy-to-let specialist at a 50 per cent discount to its book value. TPG plans to hold the stake for the customary three to five years, by which time the market will have improved and B&B's fortunes along with it.

That was the sacrifice that B&B was prepared to make to get the American specialist on board. It is clearly hoping that the move will encourage its investors to follow suit. The thinking goes that if TPG, one of the world's most successful investors, is prepared to sink £179 million into the company, then surely all is not lost? Whether or not shareholders think the same way is another matter. B&B may believe that it has got itself out of one hole, but it may have dug itself into another.

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