Walter Butler knows better than most the depths of emotion private equity can stir. The mild-mannered boss of Butler Capital Partners (BCP) lived and worked under police protection for several months after receiving death threats from Corsican nationalists.

The threats arose during the controversial 2006 privatisation of SNCM, a perennially loss-making French state ferry company serving Corsica and North Africa. Opposition to the buyout was so virulent that seamen pirated a ferry, which was dramatically recaptured by elite police lowered from helicopters. Ultimately, 72% of the workforce approved the buyout in a ballot, and the annual labour strikes ceased. Butler predicts SNCM will even make a profit next year.

Although not every BCP deal is quite so challenging, Butler has made a career – and, probably, a fortune exceeding €100m – by taking on and turning round ultra-lame ducks. He is, for instance, probably the first shareholder in a decade to make money out of French Premier League football club Paris Saint Germain. And he’s set just himself the target of turning around France’s Virgin Group, a €400m-a-year cultural goods retailer that even French publisher Lagardère failed to revive after buying it from Sir Richard Branson in 2001.

On Boxing Day last year, (26 December) while less driven bosses were relaxing and digesting the turkey, Butler agreed to buy 80% of Virgin France for €100m, confident he could double profits at the French megastores and build on the success of its music and film download site. “It’s a sector I know well,” he says with quiet confidence.

Having privatised half the French TV industry, Butler knows the entertainment and information business, and he has hard-earned experience in consumer companies.

He’ll need every insight he can muster. Retailers of recorded music are suffering Europe-wide from static music demand, cut-price competition from supermarkets and internet retailers, and online downloads. Many, like Tower Records, have closed, and last year Branson sold his original Virgin megastores in the UK to their management after the stores racked up pre-tax losses of €107m in the year to end-March 2007.

Yet Butler knows how to rescue even the most hopeless lost causes. When he bought 56% of Paris-quoted party costume maker César in 2002 it was losing €10m a year. In 2007, it declared a €1.5m net profit. Under his tutelage, themed restaurant operator Groupe Flo, a €200m-a-year business, went from net losses of €10.3m to annual profits of €19m.

“Virgin is one of the 10 most popular brands in France,” Butler says. “We don’t expect CD sales to stop falling. But the management knows how to develop in other areas.” He believes that notoriety and trust in the name can be used to build sales of digital devices, games, and books at the 47 prime city-centre stores he’s acquiring. “Virgin’s book sales were up 7% last year,” he says.

Meanwhile, half of sales arise from franchisees in the Middle East, which are growing well, and he sees a bright future for the music and film download site as more consumers get higher-speed broadband. His core strategy for Virgin is growth into related products, not cost-cutting.