Friday 27 April 2018

Broadhaven injects €35m into hotel group

(Stock photo)
(Stock photo)

Gretchen Friemann

Broadhaven Credit Partners - the alternative lender backed by US private equity giant Bain, and financier Dermot Desmond - has injected €35m into the McGettigan family-run group that owns Dublin's Regency hotel.

Its support allowed the hoteliers to recently emerge from examinership.

The McGettigan Group refinancing, which ousted the struggling hotelier's previous lender, Oaktree Capital, caps a swift period of growth for Broadhaven. Over the past five months the firm has deployed a fifth of the money from a new €500m debt fund assembled at the end of 2016.

The fresh capital was sourced entirely from Bain's balance sheet and it is understood Desmond is unlikely to funnel cash into any future funds. Instead the entrepreneur, who helped seed Broadhaven's maiden €200m vehicle, will retain an equity stake in the platform.

The Sunday Independent understands the niche debt player aims to more than double its business in Ireland within four years - a move that would take Broadhaven's grip on the market to more than €1bn. But some are sceptical about whether non-bank players will evolve into sizeable challengers to the main banks, arguing that the non-bank market could contract quickly once the cycle turns and credit constraints ease.

Broadhaven is banking on its greater level of flexibility, according to sources familiar with the firm's strategy. The niche player offers margins as low as 4.5pc and hunts across all sectors. It targets loans of €7m plus, but has no ceiling as the firm can call upon Bain's $26bn credit unit.

While it is understood Broadhaven, led by David Cullen, prefers to target the SME and mid-sized corporate sector, sources said deals in this segment have become thin on the ground as anxieties over Brexit and possible tax changes in the US begin to bite. As a result, Broadhaven has trained its sights on the property market - where burgeoning valuations are fuelling a refinancing boom.

Sunday Indo Business

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