Dunport ramps up €300m fundraising as BlueBay exits
Dunport Capital looks set to become the latest alternative lender to enter the SME sector as the retreat of the banks continues to offer opportunities there for niche players.
The new firm is closing in on a €300m fund raise and is set to open its doors for business early next year.
Dunport's arrival was born out of BlueBay Asset Management's decision not to raise a second debt fund, a decision that paves the way for its eventual exit.
Former Anglo-Irish Bank executive, Pat Walsh and Ross Morrow established the asset manager in April after learning that BlueBay was shifting its focus to a €5.5bn pan-European fund.
It is understood all borrowers in the €450m BlueBay Ireland Corporate Credit I vehicle, aimed at the SME sector and launched in mid 2013 - when the credit crunch in that segment of the economy was acute - have been informed of the decision.
The BlueBay fund, backed by Irish Strategic Investment Fund (Isif) to the tune of €200m, will close to new lending in January.
Borrowers won't be affected and the fund reaches the end of its life cycle in 2021.
BlueBay's scale-back provides a fresh opportunity to Dunport, which stands to secure refinancing deals from the global firm.
Dunport, while an independent entity, is also providing investment advisory and administrative services to the BlueBay vehicle.
If Dunport succeeds in deploying its new fund within three years, Mr Walsh and Mr Morrow hope to raise a second, larger fund. Loans from the initial vehicle however, will range in size from €3m to €35m with the target loan size set at €10m-€12m.
Dunport is expected to source funds from the backers of the BlueBay vehicle. Aside from Isif, three Irish and four international institutional funds poured cash into the much-vaunted enterprise, which has deployed over €400m across 33 transactions to 22 different borrowers. Repayments from six of those loans helped finance new deals - leaving €180m of undrawn capital in the BlueBay fund.
Alternative lender Castlehaven Finance is forging deeper into the residential property sector after assembling a €350m debt fund that will extend the firm's operations beyond Dublin and into Cork, Galway and Limerick.
Backed by the private equity firm Pollen Street Capital, which launched a bid, alongside BC Partners to buy out UK challenger bank Shawbrook earlier this year, the fresh funds are aimed at fuelling the construction of both private and social housing.
Castlehaven is on course to complete €150m of loans in 2017 and the additional capital should provide financing for up to 2,500 new homes. The firm's expansion comes as Ireland's residential property market continues to suffer from a chronic dearth of supply amid tougher regulation of the banks and a creaking planning system.
Will Aylmer, partner at Castlehaven, said the firm's ability to provide loans of 90pc LTV enables "developers to spread their equity across multiple sites".