Correctly timing the bottom of a downturn can be extremely difficult, but the consortium of investors that helped to recapitalize Bank of Ireland (NYSE: IRE) in 2011 has about tripled their investment by doing just that.

But as Bank of Ireland has moved higher, one major investor has sold the remainder of his shares. I'll look at what reasons he had for doing so, which other investors are still long Bank of Ireland shares, and where the profits are being reinvested.

The recapitalization
In 2011, Bank of Ireland was the only major Irish bank that had a reasonable chance of staying out of majority state control. To accomplish this, the bank needed to raise a substantial portion of its capital gap from private investors.

In talks that ended just before the deadline where the government would have provided the funds and assumed majority control, a consortium of investors consisting of Wilbur Ross; Fairfax Financial (TSX:FFH) and its CEO, Prem Watsa; Capital Group; Kennedy Wilson; and Fidelity Investments took a 34.9% stake in the bank, keeping it in majority private hands.

Taking profits
The Bank of Ireland investment has been a highly profitable one for all those involved, and not surprisingly, some investors are taking profits by reducing their stakes. In March, Ross and Fairfax announced that they will sell a combined 6.4% stake in the bank.

Both investors continued to hold a sizable stake in Bank of Ireland with Watsa, saying in a Reuters interview: "Because of the significant appreciation, we are rebalancing our position. The position had become very significant (in terms of our overall portfolio)."

In June, Ross announced that he will close out his Bank of Ireland position and told Bloomberg that "we were getting too much concentration" in the banking industry. Reuters asked Ross what the sale meant for his outlook on the bank, and Ross said the sale is "definitely not a negative comment on BoI or Ireland," adding, "Both are clearly on the right track." Bloomberg also asked Watsa if Fairfax would maintain its Bank of Ireland stake, to which Watsa said Fairfax "will continue to hold our shares of the bank for the long term."

New opportunities
The consortium's bet on Bank of Ireland was definitely a contrarian move, and the same group of investors is looking to build on that success in Greece. In a similar story to Bank of Ireland's recapitalization, Eurobank (OTC:EGFEY) needed to raise an additional 2.9 billion euros from the private sector to avoid even greater state ownership.

Not only has the consortium taken a major stake in Eurobank and returned it to majority private control, but Fairfax has also taken a stake in Eurobank Properties and Mytilineos Holdings and was working on a deal with National Bank of Greece (OTC:NBG.DL) until Fairfax asked for terms beyond the bank's control.

However, the markets are more willing to invest in Greek banks now than they were to provide funds to Bank of Ireland in 2011. In the Bank of Ireland recapitalization, this consortium was the only viable way the bank could remain in private hands, but in the case of Greek banks, all four major banks were able to tap private markets to raise capital on reasonable terms. This suggests that the Greek investment is not quite as contrarian, but the economic situation in Greece still makes it an overall contrarian investment

Follow the big money?
While it's always a good idea for investors to do their own research, this consortium has shown impressive performance in its Bank of Ireland investment, and some parts of the consortium continue to hold shares. Since those selling are doing so to free up more capital or diversify holdings, I don't see the recent sales as reasons to be bearish on Bank of Ireland.

However, while Bank of Ireland is still being seen as a long-term investment, the consortium is shifting to Greece in hopes of seeing more large returns with the Eurobank recapitalization. With this in mind, risk-tolerant investors should consider shares of Eurobank or other Greek stocks if they're looking for undervalued contrarian investments.

Note that shares of Eurobank and Mytilineos Holdings do trade in the U.S., although liquidity is far greater on the Athens Stock Exchange. Investors interested in these two companies may want to consider an international stock trading account.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis -- even one of our own -- helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.