Nama blocked Project Eagle valuations - property sources

C&AG report found lack of information deterred potential investors

Nama blocked potential bidders for its Northern Ireland loans from hiring local agencies to value the properties against which the debts were secured ahead of their controversial sale to US company Cerberus.

It has emerged that potential buyers were told they could not hire local property professionals to value either the assets against which the Project Eagle loans were secured, or the debts themselves, in the run-up to the sale in April 2014.

Sources in the Northern Ireland property industry say the mainly US-based investment funds interested in buying the loans initially approached local valuers to assess the portfolio for them, but then told them that the vendor, Nama, did not want anyone from Northern Ireland doing this work.

A recent report by the State’s financial watchdog, Comptroller and Auditor General (C&AG) Séamus McCarthy, says that a lack of information deterred a number of investors from bidding for the loans, known as Project Eagle, and questions the approach taken by Nama to the €1.6 billion sale.


The property sources said that after it became known that Nama was selling the loans, three potential bidders contacted the Belfast office of one estate agency in one day to ask if it would value the assets for them.

However, within 24 hours of the initial contact, two of them called back to say they had been told that Nama did not want them to use local agencies to do this work.

British-based company

When the Belfast agency suggested using its London office, the bidders said they were only allowed to use a British-based company, Lambert Smith Hampton, to value the Project Eagle assets.

That company did not have a presence in Northern Ireland at the time, though it subsequently bought Belfast estate agent BTW Shiells in June 2014, two months after the Project Eagle sale.

Nama has allowed potential bidders interested in its other auctions to hire local valuers to assess the assets that the State agency was putting up for sale. This is normal practice in such auctions. Project Eagle was the only one in which potential buyers could not do this.

Northern Ireland sources say that, had Nama allowed interested investors to hire their own valuers, it is likely that Project Eagle would have attracted more bidders than the three who formally entered the race – Pimco, Cerberus and Fortress.

Others, including Apollo, Blackstone, Goldman Sachs, Lone Star, and Oaktree, expressed initial interest to Nama's agent, UK firm Lazards, but decided against bidding.

Mr McCarthy’s report states that the limited information available on the assets and the “absence of access to valuers” deterred some potential bidders, although the C&AG does not say which ones.

Apparent advantage

Some potential bidders also highlighted the fact that Pimco, which had told Nama in late 2013 that it was interested in buying the loans, appeared to have an advantage over other bidders and these groups did not feel that they could compete with that firm.

People familiar with the Northern Ireland property market say that Pimco’s interest was well known before Nama decided to go ahead with an open market sale of the assets and that many assumed that the US company was the front runner.

However, Pimco dropped out of the auction in March 2014 after it emerged that it had agreed to pay a £15 million success fee to former Nama adviser Frank Cushnahan, Belfast solicitors Tughans, and US lawyers Brown Rudnick. Cerberus acquired the portfolio after a £1.241 billion bid.

Nama has said that pressure from both the Government and the Northern Ireland Executive not be seen to be auctioning off Northern Ireland led it to take a different approach to Project Eagle.

Sales process

Its chairman,

Frank Daly

, recently told the Dáil’s Committee on Public Accounts that the agency “accepted that certain features of the normal sales process would not actually apply, including the commissioning of property valuations”.

The agency has also challenged reports that its own values dated back to 2009, five years before the sale. Instead it said that the older values only applied to the 800 smaller assets in Project Eagle, while those applied to top 55 properties, which accounted for £900 million of the portfolio value, were up to date.

Project Eagle is the name given to about 500 loans secured on properties in Northern Ireland, the Republic and Britain, which Nama sold 2014. Mr McCarthy’s report says that the deal resulted in a probable €220 million loss the taxpayer.

Barry O'Halloran

Barry O'Halloran

Barry O’Halloran covers energy, construction, insolvency, and gaming and betting, among other areas