Cardinal to raise €300m fund for Irish investment
Published 29/01/2012 | 05:00
Capital fund targets US and Europe to raise cash
Cardinal Capital Group, the investment company led by Nigel McDermott and Nick Corcoran, is raising a €300m fund to invest in Ireland.
The fundraising by Cardinal, which previously helped raise €1.1bn to invest in Bank of Ireland, is targeting investors in North America and Europe.
The fund, provisionally known as the Ireland Opportunity Fund, plans to close its first tranche of €150m by the end of March, with the remaining €150m raised by the end of the year.
The Cardinal fund's mandate, according to investment sources, is broad and will look at the wide range of restructuring opportunities thrown up by Ireland's economic crisis.
This could range from acting as a catalyst fund by taking a small stake in larger deals, such as the sale of state or semi-state assets, to providing equity to companies refinancing their debts as part of Irish banks' massive deleveraging process.
The fund may also look at more complex areas of finance such as buying mortgage- backed securities or other distressed financial assets.
Dublin-based Cardinal declined to comment when contacted last week.
Last July, Cardinal participated in an American/Canadian consortium's acquisition of a one-third stake in Bank of Ireland.
Cardinal, the smallest investor in the consortium, helped act as a catalyst to bring the investor group, made up of Wilbur Ross, Fairfax Financial, Fidelity Capital and Kennedy Wilson, together.
The move kept Bank of Ireland out of majority state control, with the taxpayer only having a 15.1 per cent stake in the bank.
McDermott, a former bond dealer with NCB, and Corcoran, who previously set up Zurich Capital Markets in Dublin, have historically invested in a wide range of sectors, from energy plants to financial services. Cardinal's current portfolio includes an investment in Morrigan Partners, a telecoms encryption company.
Cardinal came close to acquiring the EBS last year with the backing of a group of private equity investors before the Government decided to merge the building society with AIB. At the time the consortium was prepared to invest up to €600m in the society.
In November 2008 Cardinal emerged as the founders of Mallabraca, a consortium of private equity groups interested in investing up to €5bn in Irish banks. Backers at that time included JC Flowers, the New York private equity investor, Sandler O'Neill, the investment advisers and the Carlyle Group, the multibillion investors.
Mallabraca's attempts to take a stake in BoI or in other financial institutions, including Irish Life & Permanent, was turned down by the Government, which feared a fire-sale at the time, as it still did not understand the scale of the losses facing Irish banks.
Sunday Indo Business