Sherry Fitz guaranteed directors' private deal
DAN WHITE SHERRY FitzGerald provided a ?6.5m guarantee to a Scottish property deal in which three of its directors were investors. The deal was put together by its 50 per cent associate company Signature Capital.
The most recent Sherry FitzGerald accounts for the year to the end of December 2005 show that the auctioneering firm provided Anglo Irish Bank with a ?6.5m guarantee in favour of the East Kilbride Partnership. The money was used to fund the purchase of a property in Scotland on behalf of a group of investors by Signature Capital.
Signature Capital was established in 2005 when Sherry FitzGerald sold its property finance company, Sherry FitzGerald Capital, to Ciaran McNamara and Enda Woods. Cuisine de France co-founder Ronan McNamee is non-executive chairman of Signature, in which Sherry FitzGerald retains a 50 per cent stake.
Three of the investors in Signature's Scottish property deal were Sherry FitzGerald chief executive Mark FitzGerald and two of his fellow-directors, Walter Coakley and Peter Lynch, while Signature earned ?355,000 in fees from the transaction.
So why did Sherry FitzGerald give the guarantee, which had expired before the end of 2005?
"The only reason we provided the guarantee is because Signature was a new company and it had no strength in its balance sheet at that time. Sherry FitzGerald underwrote the deal and the three directors invested in a private capacity," according to Sherry FitzGerald finance director Fergal Walshe.
And the word from sources at Sherry FitzGerald is that Mark FitzGerald, Walter Coakley and Peter Lynch invested in the deal, which was syndicated by Signature, on the same terms as all of the other investors.
"It was a good idea and a good product so they chose to invest," said one source close to the deal.