Custom House investors boosted by bank support
Clients' funds ringfenced as High Court probe under way
Published 11/10/2011 | 05:00
Up to 2,000 investors, with their pension funds tied up in Custom House Capital, are to receive encouraging news that the banks behind the company's huge property investments are prepared to remain supportive.
Up to €1.2bn of client funds are held at Custom House Capital, which is currently being investigated by High Court inspectors, with a report expected to issue later this month. But many of the investors have become alarmed at potential losses on their investments.
However, Horwath Bastow Charleton, which is administering the affairs of Custom House, has ringfenced the assets and is just finishing talks with 22 banks who funded the property investments of Custom House.
So far 20 of them have held meetings with the team from Horwath, it is understood, and all have so far expressed support, with none planning to foreclose on any assets.
In response to queries from the Irish Independent, Horwath managing partner Brian Conroy said the "preservation of a trusting relationship with such bankers'' was particularly important while the High Court investigation continued.
So far the Irish Central Bank has halted any withdrawals of funds from Custom House, in order to let the High Court continue its investigation and Horwatch are expected to remain in place for the forseeable future.
The eventual return to pension investors from the property assets is not known, but it is understood investors will be able to realise funds in "due course'', but certainly not before the High Court inspectors report is issued.
There are 250 properties behind the pension investments, with most in France or Germany and a small number in the UK. Most of the assets are fully let out and are offices or retail space.
Because most of the portfolio is outside Ireland, the write-down in values has not been as deep as might have been the case.
The inspectors' report is expected to concentrate on how clients' funds were handled at the firm. Leading figures at Custom House have been given a chance to respond to queries and any allegations likely to be included in the report.
While property makes up most of the assets involved, there is also cash and other investments.
Irish banks are not believed to be heavily involved as lenders to Custom House, with Anglo Irish Bank not involved for instance.