Tag Archives: Vulture funds

‘sup?

A report from accountants PwC has revealed Dublin is now the third-most attractive city in Europe for investors in property, up from seventh a year earlier.

The growth of big tech companies such as Facebook and Google is adding to the demand for housing.

The report said this was behind the growth of so-called “build-to-rent” housing, in which developers build whole apartment blocks to be sold off to big landlords.

Joanne Kelly, real estate leader at PwC Ireland, said big investors had shifted towards residential property in recent years.

Foreign investors rush to cash in on our housing crisis (Independent.ie)

David Chabily writes:

Why is nothing being discussed about, at the least temporarily, banning foreign investors from sucking up Irish property?

New Zealand have already done this, and likely Berlin will too.

Anyone?

Pic: Shutterstock

Independent TD Mick Wallace in the Dáil last week on vulture funds and real estate investment trusts (REITs)

Mick tweetz:

Vulture Funds have caused untold damage in Ireland, but they couldn’t have done so without the 100% support of the Fine Gael/Labour & FG/Ind Alliance Governments, not to mention their beautiful relationship with our friends in NAMA…

Thanks Gemma

Cockney.

isn’t he.

Permanent TSB’s (PTSB) planned sale of €900 million of “split mortgages” will expose borrowers to the whims of overseas investment funds, as contracts underpinning such arrangements entitle the lender to terminate the accord at will, the Oireachtas finance committee heard on Thursday.

As of the end of December, PTSB has restructured some 6,157 troubled owner-occupier loans as split mortgages, where repayments of interest and principal on part of the loan are put off to a future date, subject to a review every three years.

PTSB split-mortgage sale exposes customers to ‘will of vultures’ (Irish Times)

Earlier today.

During Leaders’ Questions, taken by Minister for Health Simon Harris.

Sinn Fein TD Pearse Doherty raised the Permanent TSB sale of €3.7 billion worth of residential mortgage loans.

Mr Doherty said the bank has been invited to attend the Oireachtas finance committee next Tuesday.

Mr Harris said the bank should go before the committee and said it would be good to see some “humility” from the bank.

Meanwhile…

Anyone?

Previously: ‘It’s Essential For The Long-Term Health Of Irish Banking’

Via Gavan Reilly

St Helen’s Court, Dun Laoghaire, County Dublin

Residents of 17 apartments in Dún Laoghaire in Dublin have been told by their landlords – two global investment funds – that they have to vacate the property within weeks.

The tenants of Saint Helen’s Court received letters from a receiver acting on the owners’ behalf, telling them to move out on various dates to allow for major refurbishments.

…It says residents will have the chance to re-rent the apartment once work is completed under certain conditions.

However, residents are sceptical. They say last year attempts were made to substantially increase the rent, just two days before the enactment of legislation only allowing rent rises of 4% a year in designated rent pressure zones.

Call for Govt to intervene as residents told to vacate 17 Dún Laoghaire apartments (RTÉ)

Pic; RTÉ

motif01hammersonoaktree

Deutsche Asset & Wealth Management Logo (PRNewsFoto/Invesco)

cerebrus

Vulture funds from top: Blacktree; Hammerson, Oaktree, Deutsche and Cerebrus

The big five.

They own you.

Play nice.

Via Tom Lyons in yesterday’s The Sunday Business Post:

Just five so-called vulture funds have acquired tens of thousands of loans from Irish borrowers with a par debt of €24.95 billion.

United States fund Cerberus, which is embroiled in the Project Eagle controversy, is by far the largest acquirer of debt from Nama. It has taken control of loans with a par value of €14.4 billion.

Oaktree comes in second having acquired loans with par debt of €3.9 billion followed by Deutsche Bank at €2.45 billion.

Dundrum Shopping Centre Hammerson Allianz is in fourth position, having bought loans primarily associated with the developer Joe O’Reilly with a par value of €2.4 billion.

Blackstone, which bought debts associated with the developer Michael O’Flynn is in fifth position, having taken control of loans with a par value of €1.8 billion.

Cerberus acquired its €14.4 billion of debt at an undisclosed total discount from Nama in just four deals.

Cerberus paid €1.6 billion for Project Eagle, a transaction which is now being investigated by various parties including the National Crime Agency in Britain.

Good times:

Five vulture funds own Irish debts of €25 billion (Tom Lyons, Sunday Business Post – subscription needed)

People Before Profit/Anti-Austerity Alliance TD Richard Boyd Barrett picks apart the government’s vulture fund housing policy to the visible chagrin of Housing Minister Simon Coveney during today’s leaders’ questions.

Earlier: Anything Good In The Dublin Economic Monitor?

Pat Comer, President, Irish Creamery Milk Suppliers' Association (ICMSA).  - Photo: Kieran Clancy   © 19/1/12  **NO FEE ** With Compliments ICMSA

John Comer, president of the Irish Creamery Milk Suppliers Association (ICMSA)

This morning.

On Today with Sean O’Rourke 

The show looked at farmers’  distressed loans being sold to vulture funds. Contributors to the discussion included solicitor John Murphy, of John A Sinnott &Co Solicitors in Enniscorthy, Co Wexford, and president of the Irish Creamery Milk Suppliers’ Association (ICMSA) John Comer.

From their discussion:

John Murphy: “I saw somebody, as recently as yesterday, getting a letter from a mainstream bank saying his loan had been sold to a vulture fund. If you read the bottom of the page, it says ‘and will be managed by’ a different firm involved. So, you know, you’ve gone from a bank to a vulture fund but you can’t contact the bank, you can’t contact the vulture fund. There is a management organisation in charge of it who are based in a warehouse, where you just can’t really call in.

“And the difficulty, I think, about a lot of places, is trying to get a name, try to get a face that you can talk to. Try and do a deal. Let me give you a quick example.

“A vulture fund buys a mainstream debt, approximately six months ago. Within, there was information freely available that the debt was bought for 25% of its value. Within three months, the farmer concerned offered that vulture fund, its managing receiver, offered him 100% profit on the debt. Now, 100% profit in three months, by my reckoning is 400% per annum. And it was refused.”

Sean O’Rourke: “On what grounds?”

Murphy: Because the receiver took the view that the asset was worth more than the offer because his client had bought the loan, and the loan was in arrears, he was entitled to the whole asset. And I had a conversation, we had a polite conversation, and I asked how the receiver proposed to realise this farm which is in rural Ireland obviously. And, you know, who was going to buy it?”

“And really, I got absolutely nowhere. The attitude was, ‘ah, I heard all these arrangements about rural Ireland before, we’ll see where we go’. Now that’s the best part of a year ago. And nothing really has happened since.”

O’Rourke: “And what’s been happening on the farm, John?”

Murphy: “Oh the farmers are farming away.”

O’Rourke: “Are they repaying any money to anybody?”

Murphy: “They’re doing their best to make some repayments, yes. But, you have to wonder why was that offer refused? Were the, there must be investors behind every vulture fund. And you wonder, were they told that they were in line for a 100% profit within three months. Because anybody I know, in business, over the years, if they were getting 100% profit at three months, there’s only one thing they’d do, they’d take it and run, and get out.”

O’Rourke: “On the other hand, the vulture fund, or the person you were dealing with, may believe that there’s a better offer if they just sit tight for a little longer.”

Murphy: “Well you’d wonder about that because the offer was very well presented. There was an accountant, a very experienced accountant involved, it wasn’t just a kind of stab in the dark, you know, ‘we’ll get a quick deal from the vulture fund’. It wasn’t that kind of situation at all, Sean. This was carefully put together and a realistic, maximum, serviceable borrowing for this particular farmer was put forward and it was demonstrated, you know, on past figures, how he could. And he’d sourced another mainstream bank, by the way, to come up with the money. It wasn’t accepted. Now you have to wonder, did it have anything to do with the continuation of the case? Which obviously would bring the receiver in much better fees than if he cleaned it out fairly quickly.”

Later

John Comer: “There is a lot of stress and anxiety out there in terms of, by the fact that we’re dealing with an unknown entity. There has been a lot of representations made to our office in Limerick, looking for advice on how to proceed. Obviously, the individuals involved were in a distressed situation anyway. But this has, as they say, added insult to injury. People, you know who had two or three generations of farming dealing with a bank, now find themselves in a situation where they don’t know actually who they owe the money to. They have no point of contact and they fail to understand why a bank would sell off these loans at 30, 40, we’re hearing different percentages of the value when, perhaps there was other options that could have been explored.

“We feel that I don’t think there was enough done overall to get loans that were, probably under performing, restructured and given to business people an opportunity to restructure their loans and essentially pay back the debt.”

“…we have met with all the pillar banks, you know, with an overall policy that we do not want to see a repeat of ugly scenes of farms and family farms, I stress, being sold in this manner. Because we believe, in most cases, there can be a resolution found if there was more engagement and if there was more recognition of the reality of the situation. Because, I can assure you, if vulture funds start selling off family farms in rural Ireland over the course of the next year or two, there certainly will be, you know, ugly scenes manifesting themselves because it’s ingrained in all of Irish citizens, I think, the repulsion of people being thrown out of their business and their home and there actual farm because of  a history and I think people would be making a mistake if they felt there was going to be no resistance in that area.”

Listen back in full here