Thursday 23 November 2017

Developer Greg Kavanagh seals €150m deal to exit his business

The New Generation Homes chief made the move after what a source described as ‘a period of intense negotiations’
The New Generation Homes chief made the move after what a source described as ‘a period of intense negotiations’
Ronald Quinlan

Ronald Quinlan

New Generation Homes chief Greg Kavanagh has secured a massive payment in a deal understood to be valued in excess of €150m from his company's financial backers, London-based M&G Investments.

The deal will see him leave the business.

The Irish Independent understands Mr Kavanagh reached the agreement with M&G and New Generation's current ceo Pat Crean on Wednesday afternoon following what a source described as a "a period of intense negotiations".

Under the terms of the transaction, Mr Kavanagh has agreed to sell his stake in the residential and commercial property assets held by the business.

The management of the property assets backed by international asset manager M&G Investments will now transfer to a new company, of which M&G Investments will be the sole financial backer.

While Mr Kavanagh will retain the New Generation Homes brand, Pat Crean is to head up the new company with the backing of M&G Investments.

It is understood that Mr Kavanagh is already considering fresh opportunities in the property sector in London and possibly in New York.

The 31-year-old Wicklow native is also said to be keen to progress plans for a number of development sites in Dublin that he acquired in a personal capacity, which have not been captured as part of M&G's buyout of the New Generation portfolio.

In a statement released to the Irish Independent, a spokesman acting on behalf of New Geneeration's two founding principals, Greg Kavanagh and Pat Crean, said: "Having established and developed the exceptional business that is New Generation Homes, its two principals, Pat Crean and Greg Kavanagh, are each embarking on separate business ventures".

The spokesman said both men were "excited about their new ventures and wish each other well".

Greg Kavanagh for his part, said: "We have built a property business of extraordinary scale in the past few years and I believe now is the time for me to move onto my next opportunity."

Commenting on his intentions for the massive land portfolio assembled by New Generation during the recession, Pat Crean said: "I am looking forward to developing this high quality portfolio of property investment through the new company, and in the process helping alleviate the shortage of both quality housing and commercial property." A relative unknown in the property scene up until 2012, Greg Kavanagh entered the sector at speed as the country began to inch its way out of what had become known as the 'great recession'. He started making money, while still in school, as a day trader.

Armed with around €2m in cash by his mid-20s he rolled the dice on Irish property at a time while the market was still on its knees and the country's financial management was being directed by the EU/IMF/ECB troika.

Mr Kavanagh's company, New Generation Homes, spent about €300m snapping up land in Dublin and its commuter hinterland, securing finance entirely from private equity rather than loans. In the course of his brief career in property, Mr Kavanagh's backers have included e-learning tycoon Pat McDonagh, Starwood Capital, British investor John Beckwith and most recently M&G, the investment fund owned by insurance giant Prudential.

While the company recently moved to take advantage of the shortage of Dublin development sites through the disposal of a range of New Generation's sites, the process - dubbed 'Project Firefly' - failed to secure a buyer willing to stump up the €250m being sought.

The portfolio is understood to have included sites in Foxrock, Cabinteely, Blackrock, Dundrum, Killiney, Rathmichael, Harold's Cross, Cabra, Saggart, Howth, Baldoyle, Coolock and Finglas.

Included in those believed to have considered the Project Firefly portfolio are Richard Barrett's Bartra Capital, Lone Star, and the developer, Michael O'Flynn.

Irish Independent

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