Sunday 8 December 2019

Ireland's second richest man targets Anglo's €10bn loans

Grayken's €24bn Lone Star plans to hoover up US portfolio

Nick Webb

Ireland's second-richest man -- low-profile, Texas-based billionaire John Grayken -- is believed to be trying to buy a large chunk of Anglo Irish Bank's €10bn US loan book.

Grayken, who is an Irish citizen, heads up the US private-equity giant Lone Star, which has €24bn in funds under management. The Sunday Independent Rich List 2011 calculated Grayken's net worth at €4.6bn -- up €600m on 2010.

The Harvard-educated economics graduate set up Lone Star in 1995, having worked at Morgan Stanley for almost a decade. Little is known about the financier, who became an Irish citizen in the 1990s.He has spent big money renovating a period mansion in Surrey, which was formerly occupied by Sarah Ferguson. He is also thought to own a lavish townhouse off Bond Street in London's West End.

Grayken's partner at Lone Star was Ellis Short, who received Irish citizenship in February 2009. Short is now the owner of Premiership football team Sunderland.

Sources close to the Anglo sale have indicated that Lone Star is actively engaged in the bidding process, which is being handled by New York real-estate broker Eastdil Secured, as well as the consultancy wing of FTI.

It is understood that the loans have been packaged into various tranches categorised by loan-to-value ratios. The Anglo portfolio is also split into performing and non-performing loans, with Eastdil also prepared to look at hiving off the hotel, retail and office loans in separate blocks.

Finance Minister Michael Noonan flew to the US early this month to help launch the sales process as part of the develeraging of the bailed-out Anglo Irish Bank. The bank's US loan book includes 14,000 hotel rooms, as well as prime properties and property loans.

Major US investment banks, ranging from Credit Suisse to JP Morgan, as well as private-equity groups, including Starwood Capital, KKR and Blackstone, are all thought to be eyeing parts of the portfolio.

Last week a data room was opened to potential buyers who had inked confidentiality agreements. Sources close to the deal told the Sunday Independent that final bids are to be submitted by the third week of August, with preferred bidders chosen the following week. But some observers feel that the State may only get €4bn for the assets because of problems over the quality of the loans.

Last Friday, the High Court approved Anglo Irish Bank's merger with the equally toxic Irish Nationwide, with the combined operations to be gradually run down over the next decade.

The Anglo Irish Bank name and brand are to be torched and replaced by the less-offensive Irish Bank Resolution Corporation (IBRC).

Grayken and Lone Star are making a massive bet on the recovery of global property markets through the pursuit of distressed property loans and assets. Last month, the group, wheadquartered in Dallas, raised €3.8bn for a real-estate investment fund. This was the largest private fund raising to date this year.

The New Jersey state pension fund is one of the few Lone Star backers to have been named, having committed €275m at the end of May.

Last week, Lone Star came off second-best to rival private-equity group Blackstone in a bid to buy €1.7bn worth of property-related loans being sold by Royal Bank of Scotland, which owns Ulster Bank in Ireland.

Sunday Indo Business

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