Eight potential bidders prevented from entering race for €1.6bn portfolio
Several investment firms that expressed an interest in the controversial Project Eagle deal were excluded from bidding.
Nine major investment firms were contacted by agents for Nama when it decided to sell more than 850 loans linked to properties owned by developers in the North.
But an examination of the sale by the Comptroller & Auditor General (C&AG) found eight other companies that expressed interest were excluded from getting involved.
A number of these parties expressed frustration and unhappiness at being left out, according to emails detailed in the C&AG's damning report on the sale.
C&AG Seamus McCarthy said that generally Nama's aim when carrying out a loan sale was to attract as large a pool of suitable potential bidders as possible. But he found the marketing approach used for Project Eagle was different, and restricted competition.
Nama defended its approach, saying there was a limited number of potential bidders with the financial capacity to buy a portfolio with an asking price in the region of Stg£1.3bn.
Lazard, the financial advisory firm that conducted the sale for Nama, said it excluded the eight companies for a variety of reasons.
These included ensuring the confidentiality of the sale process, the need to adhere to a timetable, and maintaining the motivation of bidders already in the process.
However, an email to Nama from a Lazard executive in February 2014 detailed how one interested firm was "frustrated" and demanded an explanation "given that Nama typically runs open processes".
The Lazard executive said: "I explained that this transaction was unusual in that respect, but that I was not in a position to elaborate."
A second email from a Lazard executive to Nama in the same month said a representative of another company "was very frustrated that his firm had not been included in the first place, given their track record in Ireland and their relationship with both Nama and Lazard".
Of the nine firms that were contacted by Lazard, only two, Cerberus and Fortress, would end up submitting bids, with Cerberus winning with a bid of Stg£1.241bn (€1.6bn at the time) in April 2014.
Investment giants Pimco, Oaktree, Goldman Sachs and Lone Star withdrew from the competition.
Blackstone, Starwood and Apollo all declined to participate.
Lazard said companies that declined to enter cited exposure to Northern Ireland, limited due-diligence information available and a lack of confidence in being able to compete with initial frontrunners Pimco.
The C&AG found restrictions imposed by Nama meant potential bidders were prevented from contacting debtors, or availing of the services of valuers in Northern Ireland. This led some firms to pull out, citing the difficulty they would have in carrying out due diligence without such third-party assistance.
A virtual 'data room' made available to bidders to do due diligence contained about 2,800 documents relating to roughly 850 properties.
The C&AG noted that in contrast, Nama's subsequent Project Arrow sale involved a data room with 22,000 documents for around 1,900 property assets.