Sunday 25 September 2016

The Insider: Business confidential

Published 28/02/2016 | 02:30

Elle McPherson
Elle McPherson

Elle McPherson's money manager Elkstone backs developer Sean Reilly

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Elkstone Capital, the exclusive wealth manager of hyper rich investors like super model Elle McPherson, is backing one of developer Sean Reilly's comeback projects.

Reilly, best known as one of the Maple 10 investors, owns about 1m sq ft of office space via his company McGarrell Reilly. This includes the huge Watermarque building now occupied by Airbnb.

Some €373m worth of his Nama loans were bundled up and sold to Lone Star as part of Project Holly in 2014. The private equity group paid €220m for the loans. Lone Star should make handsome returns on that.

Reilly also has a stack of land dotted around Dublin and the commuter belt and he's getting back to building in a big way. Elkstone Capital International and Bank of Ireland have just committed to finance a residential scheme of pricey enough four and five bed homes at Steeplechase Hill in Ratoath, Co Meath.

Elkstone is also funding Michael O'Flynn's plans to build luxury homes in Cabinteely, south Dublin. Access to finance is one of the biggest issues facing the housebuilding industry or so every builder I meet tells me. Banks won't lend more than 70pc for most development, so the developers need to come up with the other 30pc from other sources.

This has led to a posse of new specialist lenders rolling into town, offering seriously expensive mezzanine finance, at rates of up to 16pc.

All of this adds to the cost of the build - calculated to be €256,466 for a three bed semi by SCSI - making it increasingly less economic to crack open the bricks and start construction. When specialist financial players are needed to bankroll deals like this, only an eejit would think that the market is functioning correctly.

Icon's biggest deal hangs in the balance as Pfizer research partnership talks begin

You wouldn't recognise him if you saw his photo on the back of your Cheerios box but Ciaran Murray is one of the highest paid executives in Ireland, netting $12.35m in 2014 alone.

He took over the wheel at the $4bn valued clinical research group Icon when founders Ronan Lambe and John Climax took a step back in 2011. Since then shares of the Nasdaq and ISEQ listed firm have more than quadrupled. My spies tell me that Icon is facing into one of its most important pow wows of recent years.

Murray has just kicked off negotiations with pharma giant Pfizer about signing a new research partnership deal.

It's not any old contract. The Pfizer deal accounts for about 31pc of Icon's revenues or close to €500m. That's about as much as Icon has grown its sales since Murray took charge. Losing it would be catastrophic.

Icon and Pfizer first got into bed in 2011, teaming up in a five-year deal which sees Icon's pointy heads at its central laboratories crunch numbers and test potions for the Viagra maker. Pfizer also outsourced some of its clinical research to Paraxel.

But last year Pfizer decided to spread the love a bit wider and brought in yet another clinical research company PPD to help with the increasing workload, so more rivals want to eat Icon's lunch.

The Sandyford headquartered firm has 125 separate projects, which will keep it in Pfizer cheques for quite some time. However the Pfizer work is "maturing" and "not growing to the same extent" that it was in previous years, Murray has said.

But given the reliance on one single client for almost one third of revenues, Icon has been slowly ratchetting up its non-big pharma client base, which now accounts for 40pc of all revenues. Murray and his team would be wise to get knocking on more doors.

It's all in the name - railway quangos get confusing in Transport Minister's move

When Bill Clinton's presidency ended, White house staffers removed the letter 'W' from a number of office keyboards to punk new President George W Bush's new administration.

Could it be that Transport Minister Paschal Donohoe is doing the same thing?

In possibly his final act as minister, Donohoe approved the renaming of the €2.39m per year Railway Safety Commission to the Commission for Railway Regulation. That will fool the new government when it comes looking for such a strategically necessary body.

Saracens tycoon Silvester gets the green light to remodel his Dublin bolt hole

Dominic Silvester has made a pot full of cash out of insurance and reinsurance in Bermuda. He's chief executive of the €2bn valued Enstar, which last week cut a $2.2bn run-off deal with Allianz to re-insure a blob of the German insurers obligations on policies from workers' compensation, construction defects, and asbestos.

He has a 7.8pc stake, worth around €165m. He's spent it on some cool stuff too.

Silvester and his wife Julie are among the biggest shareholders in English premiership rugby club Saracens, which looks nailed on to win this year's Heineken cup. There's also a planning application for a house on Dublin's Wellington Road, which got the green light last Tuesday.

The application had been made on behalf of "Dominic and Julie Silvester" in late December. It sought to knock down a horrible 1980s conservatory and ground floor extension and build a stonking great three storey extension out the back. It also involved the movement of kitchens and assorted bedrooms and changing rooms.

The house was the most expensive property sold in 2007, selling for €10.5m at a Lisney auction. It had been guiding at €6.5m before the auction.

More a labour of love than a canny punt perhaps?

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