Tuesday 21 November 2017

Investor Watsa banks on new projects in Ireland

Laura Noonan

Laura Noonan

CANADIAN billionaire Prem Watsa, the man currently reaping rewards from his massive 2011 investment in Bank of Ireland, says he is now considering other Irish investment opportunities.

Indian-born Mr Watsa, who pumped €300m into Bank of Ireland in the summer of 2011 as part of a deal that allowed the lender to avoid nationalisation, said he "continues to look at the possibilities" in Ireland.

"We met many business people in Ireland, we have huge admiration for the business community in Ireland," he added.

Though he voiced concern about the US equities market, describing it as overstretched, Mr Watsa said he was considerably less worried about Ireland.

"The Irish have taken the tough medicine without any riots, without any noise, and have really done it very well," he said.

The country was in the first year of its sovereign bailout when Watsa and Bill McMorrow, head of US-headquartered real estate investor Kennedy Wilson, brought together five investors who pumped €1.1bn into the bank's 2011 bailout.

At the time the yield on Ireland's benchmark 10-year bond topped 13pc and Bank of Ireland's main rival AIB had to accept a bailout that left it 99.8pc state-owned as the country plumbed the depths of its financial crisis. Less than three years later, Mr Watsa's investment in Bank of Ireland has almost trebled in value to €845m.

The 63-year-old, often compared to US investor Warren Buffet, another self-made man, prides himself on a strategy of investing in stocks and markets others avoid.

In 1990, he was on the right side of the Tokyo market crash, and 17 years later, his bet against the US housing market bubble left him with billions of dollars in profits while less prescient peers took a battering.

Investments in Greece and a $4.7bn bid for BlackBerry, which has faded almost to irrelevance in a competitive smartphone market, fit the pattern of contrarian investments, but it's too early to say if they will succeed.

Mr Watsa stepped down from Bank of Ireland's board in July, passing the baton to a Fairfax colleague Bradley Martin. "I rarely get on boards and I don't stay on them for long – I have enough things to do in Fairfax," he said.

Irish Independent

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