Thursday 24 May 2018

Dublin firm raises €150m to lend to small developers

By year end, Lotus Investment Group said it will have invested a total of €250m into the Irish marketplace
By year end, Lotus Investment Group said it will have invested a total of €250m into the Irish marketplace
Sarah McCabe

Sarah McCabe

An Irish firm backed by US investors has made another €150m available to developers and other businesses seeking to finance small property projects or to buy property loans back from banks and funds.

Lotus Investment Group is a Dublin-based investment management firm that provides finance to developers and other property players for small and medium property assets.

It was founded in 2013 by US hedge fund boss David Grin and is led in Dublin by Ian Lawlor. The company is backed by a syndicate of New York-based wealthy private investors.

Having already sunk €100m into Irish property projects through 60 loans, it has just launched another €150m fund, which it intends to allocate over the next six months.

By year end, the company said it will have invested a total of €250m into the Irish marketplace.

The average loan size is between €1m and €3m, though its biggest is around the €10m mark. The loan term is usually 12 to 24 months, but longer-term finance is also available. To date, the majority of transactions have involved parties who are constructing new housing developments located along Ireland's commuter belt and around bigger towns and cities.

Projects it has financed include the acquisition of a site in Ashford, Co Wicklow, and the subsequent construction of 25 homes, and a refinancing deal on 34 student apartments in north Dublin city.

In the past six months, Lotus said, the company has seen a surge of interest from people seeking to buy their property loans out of funds or banks.

"We're seeing a lot of interest from people seeking to refinance loans so that they can get them out of banks, or funds who might have bought them from banks" said Lawlor.

In other property news, private equity firm Lone Star, one of the biggest buyers of distressed Irish assets in the wake of the recession, will bankroll up to 4,000 new homes planned for the Dublin region following its acquisition of a portfolio of loans from Ulster Bank.

John Grayken's firm is in talks to finance three developments being carried out by some of the country's largest building groups, whose loans it acquired with the purchase of part of Project Clear late last year, it is understood.

This includes housebuilding in Adamstown being carried out by Joe O'Reilly's Castlethorn Developments, in Skerries by Carroll Developments and in Portmarnock by Sean Mulryan's Ballymore. Up to 4,000 homes are planned across the three projects.

Financing residential construction is a new move in Ireland for the private equity group, funded in 1995 by Grayken, a Texas native who was granted Irish citizenship in the 1990s.

The company is a prolific buyer and seller of distressed assets around the world and has raised around $60bn for this over the last two decades.

In Ireland it bought a number of loan portfolios secured by commercial and residential property and land from sellers including AIB, IBRC and Nama as well as Ulster Bank. It also acquired an Irish banking license with the purchase of Start Mortgages from Investec in 2014.

Sunday Indo Business

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