Sunday 25 August 2019

Goggin hooks up with giant €42bn Apollo

Ex-BoI chief sets up IFSC firm for investments

Nick Webb

AS Bank of Ireland struggles to escape state ownership, Brian Goggin -- the former chief executive who racked up billions of euros of bum property loans -- has joined up with €42bn private equity giant Apollo Management to target distressed financial assets and other investments.

Apollo, which was set up by former Drexel Burnham Lamber banker Leon Black -- one of the richest men on Wall Street -- has been active in buying distressed financial companies across Europe in recent months.

Before Christmas the private equity firm joined forces with CVC Private equity to buy Brit Insurance for €1.04bn.

Mr Black is thought to be worth close to €3.5bn and owns a massive estate outside New York complete with orchards, reflecting pools and a sculpture garden. He has also been named as one of the top 10 biggest art buyers in the world with a collection including works by Degas, Picasso and Raphael. Apollo is widely expected to float on the New York Stock Exchange in coming months.

It has emerged that Mr Goggin has become a director of IFSC-based Financial Credit Investments with Gernot Lohr, a high-flying partner in Apollo's London office. Mr Lohr has just joined the board of Apollo's new acquisition Brit Insurance. Financial Credit Investments is understood to have secured financing for its activities recently. Sources close to Apollo told the Sunday Independent that the private equity giant was "the master of time and space when it comes to distressed debt". They declined to discuss the operations of the Irish company Financial credit investments. Mr Goggin also declined to comment.

Mr Goggin retired from Bank of Ireland in January 2009, soon after giving the infamous interview to RTE when he revealed that his salary would be "less than €2m" for the year despite a paycut. The banker is thought to have suffered health problems and spent a lot of time in Portugal since his departure from the bank. Mr Goggin has a pension of about €650,000 per year.

Bank of Ireland is thought to be working on a deal to prevent it being completely taken over by the state. Under the scheme, the State may buy €1.4bn worth of non-voting shares in the bank, which will be bought back by Bank of Ireland following a rights issue later this year. The bank was unable to get a rights issue away before the deadline for regulatory requirements for boosting its balance sheet. It may now return to the markets later in the year. Last May, Bank of Ireland raised €2.9bn in a rights issue but shares have tanked since then. The bank, which is already 36 per cent owned by the taxpayer, has received a €3.5bn bailout from the state.

Mr Goggin isn't the first former banker from a bailout bank to hook up with Apollo. Last year it emerged that Adam Applegarth, the chief executive at the controls when Northern Rock had to be rescued by the British government, had become an adviser to the massive private equity firm.

Linking up with Apollo can be an extremely lucrative experience. Brit Insurance management invested €1.5m into a new "ownership structure" after the takeover.

As part of the deal they are now entitled to a generous profit share equivalent to 9.5 per cent of all profits if the company grows by more than 12 per cent a year.

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