Saturday Oct 2 2010

Asked how he had lost all his money back in the 1920s, the novelist F Scott Fitzgerald gave a pithy response: "In two ways: slowly, then very, very quickly."

Pat Kenny probably understands the great American writer's plight. This week the Frontline presenter talked about how how his pension has been devastated in the recession.

He lost a lot of money very, very quickly.

He may be Ireland's best-paid broadcaster on a salary of more than €600,000 a year, but that has not stopped him being clobbered by the crash.

The presenter, who does not have an RTE pension because he is an independent contractor, lost much of his savings on shares in AIB and Bank of Ireland. And a string of property deals, including purchases of stakes in luxury hotels, is also under a cloud.

Reflecting on his predicament, the Frontline presenter told me: "I have no optimism at all that my investments will regain their value, but time will tell.''

He is just one in a long line of famous people who have shown a remarkable capacity to lose money. Only this week it was reported that ACC Bank has begun legal action against musician Jim Corr and an associate for an alleged debt of €1.3m.

In an almost uncanny way, Pat Kenny's misfortune follows that of his predecessor in The Late Late Show chair, Gay Byrne.

Both men suffered a massive financial hit as a result of the crash in bank shares in 2008, and both invested a chunk of their wealth with the financial guru, Derek Quinlan.

Quinlan, a former tax inspector, was once considered the man with a Midas touch on the Dublin scene. With the two broadcasting kings on board, and a string of business titans also backing him, he was impeccably well-connected.

In 2004, he was so renowned that he was voted Property Personality of the Year at the Irish Property Awards. A report of the convivial occasion described him as flushed with victory, with "cheeks smudged with congratulatory lipstick stains''.

Now the financial advisor to the glitterati is said to have accumulated debts of €600m and some of the movers and shakers of Dublin have been left licking their wounds.

He left Dublin last year and now hangs out in a rented mansion in Switzerland. Much of his fallen empire, including some of Pat Kenny's investments, will go into NAMA -- and this week his five-bedroom home on Shrewsbury Road (with swimming pool) was advertised for sale at €7.5m. He has two further houses on the street.

Quinlan's tentacles spread into the heart of the business and showbiz establishments. Among the well-known figures who have invested in his projects over the years are the Riverdance founders John McColgan and Moya Doherty, and the former Arnotts boss Richard Nesbitt.

The star-adviser has enjoyed a close relationship with members of U2, even entering into partnership with Bono and The Edge in 2005 by investing in the loss-making Clarence Hotel on Dublin's Wellington Quay (see panel). Bono thanked the tycoon on the sleeve notes of last year's album, No Line on the Horizon.

Pat Kenny and Gay Byrne are both part of a Quinlan-led syndicate that invested in a hotel in Budapest that is due to come under the control of NAMA later this year. Kenny invested a year's wages, €600,000, in the Four Seasons Hotel, which overlooks the Danube in Budapest, while Byrne is reported to have been in for €1m.

Kenny is also involved in syndicates that bought property in London and Prague.

Like many others in Dublin, the broadcaster put a large part of his financial future in the hands of Derek Quinlan, but he has not talked to him for almost two years.

"Last time I spoke to him was when I bumped into him when he was buying toys for his children in December 2008,'' said the broadcaster.

"Otherwise I have not spoken to him at all.

"During the boom, Derek was considered a brave entrepreneur who had a go. He was seen as canny and shrewd, and when he bought the Savoy Hotel in London (in 2004) it was considered a master stroke. But then he got caught up in the bubble.''

Kenny is also a shareholder in the Ritz-Carlton Hotel in Co Wicklow, which was developed by the NAMA-bound company Treasury Holdings, part-owned by Johnny Ronan. He is reported to have bought a suite in the hotel.

Kenny's holdings in bank shares were all but wiped out in the crash, but he does not feel that his investments were imprudent.

"The old rules of investment have been torn up in the recession,'' said the broadcaster. "Bank shares were supposed to be blue-chip investments, but in this recession there is no such thing as a safe investment.''

When I contacted him this week, Gay Byrne was reluctant to talk about his recent financial misfortunes.

"I don't want to be depicted as poor old Gay who has lost everything,'' said the presenter, who was once the highest-paid broadcaster in the country.

"I was prudent. I am no different to hundreds of thousands of people all over the country who lost money. Basically my pension has all gone.''

Unlike Kenny, Byrne said he had spoken regularly to Derek Quinlan, but he said he wished to keep the content of the conversations private.

This is not the first time that Gay Byrne has suffered heavy financial losses. Back in the 1980s, he had entrusted his life savings to his accountant Russell Murphy. It was only after Murphy's death in 1986 that Byrne discovered that his financial adviser had cheated him out of more than €200,000.

Fellow broadcaster Mike Murphy and playwright Hugh Leonard were among the others who lost money as a result of Russell Murphy's embezzlement. Byrne is always reluctant to talk about that episode, but his daughter Crona once said it had a devastating effect on him at the time.

Kenny, Byrne and the tens of thousands of others who have lost their shirts in the recession may believe that they had been cautious, but that view would not necessarily be shared by financial analysts.

Karl Deeter, an investment expert at Irish Mortgage Brokers, believes that many wealthy Irish people are often not very sophisticated when it comes to dealing with retirement savings.

"People put their pension money into all sorts of risky investments, such as property and shares. Near retirement they should have money in bonds and deposits.''

Irish people have long had a love affair with property, but many people did not understand the level of risk in the boom, according to Fiona Daly of Rubicon Investment Consulting.

"It is human nature for people who are well-connected to think that they are getting inside information about a deal,'' says Ms Daly.

"But it is like a tip for Cheltenham. You should not be putting your life savings on it. There is no investment that is a sure-fire thing.''

It is a lesson that many wealthy people, including some well-known figures, now probably wish that they had followed.

Irish Independent

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