Desmond backs €200m venture for new houses in Ireland

Billionaire financier Dermot Desmond has set up a new business with up to €200 million to spend on building residential houses in Ireland.

The business, called Broadhaven Credit Partners is backed by Mr Desmond and Sankaty Advisors, a US credit specialist with $24 billion in assets under management.

Broadhaven is understood to be prepared to support credible housebuilders in Ireland, either by providing them with equity or debt, depending on individual deal requirements.

It is also prepared to consider investing in other sectors, but it is understood to be focused on funding the construction of hundreds of houses, primarily in the greater Dublin area, if it can identify deals that make economic sense.

The decision of Mr Desmond, an astute financier famed for his timing, to consider investing in housebuilding will be watched closely, as it indicates he believes there is value again in the market.

Questioned prices

In September 2006 Mr Desmond was one of very few Irish investors to question Ireland’s surging property prices. He told

Bloomberg

he believed property prices were “a bit frothy” and he feared a “little bubble” had emerged.

He did not predict the Irish property crash, but noted: “Residential property is as expensive here as in London or New York. While I’m very proud of Dublin as a city, I still don’t think, in the global map, it’s as important as London or New York as far as buying residential property.’’

Three months before that interview, Mr Desmond had cut his exposure to Irish property by selling his 22 per cent shareholding in Greencore at a profit to Liam Carroll.

Greencore stake

At the time the property developer wanted to build a stake in Greencore – originally a major sugar business but by then a sandwichmaker – in order to get access to its land bank, which was valued during the boom at hundreds of millions of euro. This value later collapsed and Mr Carroll, one of the State’s biggest boomtime builders, was forced by his banks to sell his shares in Greencore. He later lost his entire empire because of excessive borrowing to buy property.

Broadhaven has only become active in recent months but it may have been in the pipeline for longer. It is believed to be in talks already with a number of experienced residential housebuilders.

Stewart Doyle, who previously worked for Mr Desmond in his investment company QED Equity for seven years, became a principal of the new business this month.

Mr Doyle was reported in the Sunday Independent in May to have played a part in working with QED and private equity group KKR on refinancing on better terms debts associated with the Aviva Stadium, which were owed by the FAI.

David Cullen, a corporate banker and chartered accountant, is also a principal of Broadhaven, having taken up his position at the start of the month. He previously worked as managing director of British venture capitalist Jon Moulton's Better Capital (Dublin) Ltd.

He was involved in the global restructuring group at Ulster Bank, so he has experience in dealing with complex property transactions that require different financial solutions to resolve.

Sankaty is an affiliate of Bain Capital, a giant asset management firm co-founded by former US presidential candidate Mitt Romney.

Broadhaven could not be contacted for comment yesterday.