Friends First has €10m tied up in stalled project
THE Irish offshoot of Friends First has €10m of its own cash stuck in an alternative investment project that failed to launch when the financial collapse hit.
The life insurance company put the €10m into a Domhnal Slattery-led company called Shelbourne Opportunities in late 2007.
The accounts for Shelbourne Opportunities describe Friends First as the company's "bank", with a note showing the insurer bears all the investment risk of Shelbourne's portfolio.
"It was set up as an alternative investment fund, but with the way the market went we never launched it," said Friends First head of marketing Eamonn Twomey.
He added the €10m initially put up by Friends First was expected to be tied up for "six to 12 months" until the fund was launched with investor capital.
The money is now tied up in Shelbourne Opportunities until Friends First decides to sell the assets. The assets in question are understood include a variety of private-equity style projects.
"The bank (Friends First) will acquire the investments, together with any accumulated cash dividends or distributions, in return for cancelling the borrowings and related interested accrued," the note adds.
The shelving of the fund is far from Friends First's only casualty of the economic collapse, with the insurer's defunct lending arm writing off more than €100m last year.
There was brighter news in Friends First core life insurance business where market share grew from 5.7pc to 6.7pc in 2009. The insurer is due to announce half-year results next Wednesday.