Tuesday 6 December 2016

Exclusive: Developer Greg Kavanagh hits the jackpot with €150m payday

Published 20/10/2016 | 12:46

Greg Kavanagh
Greg Kavanagh

New Generation Homes chief Greg Kavanagh has secured a massive payment in a deal understood to be valued in excess of €150m from his company’s financial backers, London-based M&G Investments, in a deal which will see him exit the business.

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The Irish Independent understands the agreement between the parties was reached yesterday afternoon following what a source familiar with the matter termed “a period of intense but amicable negotiations”.

While Kavanagh was unavailable for comment on the multimillion euro payment he is now in line for or on the precise terms of the deal which sources described as “amicable”, it is understood M&G Investments will acquire all of New Generation’s assets. Those assets - a portfolio of Dublin development sites – are to be transferred into the ownership of a new company to be formed and headed up by Kavanagh’s current co-director, the CEO of New Generation Homes, Pat Crean.

While it is understood Greg Kavanagh will retain and develop a number of development sites in Dublin, these are assets which he acquired in a personal capacity, and as such will not be captured as part of M&G’s buyout of the New Generation portfolio.

Kavanagh, for his part, is understood to be considering fresh opportunities in the property sector in London and possibly in New York.

Independent.ie is currently awaiting a statement from New Generation Homes on the deal. 

A relative unknown in the property scene up until 2012, the now 31-year-old Kavanagh entered the sector at dramatic speed as the country began to inch its way out of the recession. He started making money, while still in school, as a day trader. Armed with some €2m in cash by his mid-20s he rolled the dice on Irish property at a time while the market was still on its knees and the country’s financial management was being directed by the EU/IMF/ECB troika.

Kavanagh’s company, New Generation Homes, spent about €300m snapping up land in Dublin and its commuter hinterland as prices were only just beginning to recover, securing finance entirely from private equity rather than loans.

In the course of his brief career in the property industry, the Wicklow natives backers backers have included e-learning tycoon Pat McDonagh, US real estate giants Starwood Capital and the Pacific investment vehicle of British investor Sir John Beckwith.

Up until yesterday’s agreement, New Generation's sole backer had been M&G, the investment fund owned by insurance giant Prudential.

While the company recently moved to take advantage of the acute shortage of development sites in Dublin through the disposal of a range of New Generation’s sites, the process – dubbed ‘Project Firefly’ – failed to secure a buyer willing to stump up the €250m being sought.

The portfolio offered is understood to have contained sites in Foxrock, Cabinteely, Blackrock, Dundrum, Killiney, Rathmichael,  Harold's Cross, Cabra, Saggart, Howth, Baldoyle, Coolock and Finglas. The Historic La Touche Hotel in Greystones is also thought to have been offered as part of the proposed sale.

Included in those believed to have run the rule over the Project Firefly portfolio are former Treasury Holdings’ chief Richard Barrett’s Bartra Capital, Lone Star, and the Cork-based developer, Michael O’Flynn. 

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