Goldman Sachs generated €250m last year from Celtic Tiger property loan portfolios, but paid little tax

Three Goldman Sachs investment vehicles which bought up crisis-era Irish property loans took in more than €250 million in cash from the assets last year while paying a relatively low level of corporation tax.

The Goldman-owned entities Beltany Property Finance, Ennis Property Financer and Liffey Acquisitions, which owns Kenmare Property Finance, raised the cash sum in loan repayments and interest from borrowers, as well as selling tranches of the loans, accounts show.

However, Ennis and Liffey paid no corporation tax at all while Beltany paid €154,900, the accounts show, after the Goldman entities used historical accounting losses to wipe out almost all of their tax bills. The Goldman entities, which have no employees, accrued the losses that generated the tax assets by sending huge sums of cash to other Goldman-affiliated entities in loan repayments.

The accounts filed this week for Beltany, Ennis and Liffey illustrate the complex tax planning typically undertaken by such funds, which are often described by industry critics as so-called “vulture funds” although many finance professionals reject that tag.

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The Goldman vehicles, which were the linchpins of its post-Celtic Tiger investment strategy in the Republic, bought up portfolios of loans in 2014 and 2015 from Ulster Bank and Irish Bank Resolution Corporation, a successor of the bust Anglo-Irish Bank and also the Belgian bank KBC.

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Loans bought by Beltany were secured on myriad properties such as the Aut Even private hospital in Kilkenny, as well as commercial borrowers including retailers and also residential properties, such as the former Fairview, Dublin, home of 1916 revolutionary leader Thomas Clarke and his wife, Kathleen Clarke, a leader of Cumann na mBan. Liffey’s loans, when it bought them, were secured on properties such as the Aberdeen Lodge Hotel in Dublin 4. Ennis bought commercial loans and dealt with borrowers such as the late pub owner and impresario, John Reynolds.

The three Goldman entities collected €159.1 million in cash repayments last year, their respective accounts show, as well as generating a further €46.7 million in interest payments. In July last year, the entities also sold property-secured loans for €47.55 million.

The accounts show that last month, Beltany also agreed the sale of a further €20.9 million worth of loans while Ennis agreed to sell almost €2.7 million of assets.

Goldman originally issued several billion euros of loan notes in 2014 and 2015 to finance the purchase of Irish property loans, but much of this has been paid to investors by cash from Ennis, Liffey and Beltany. Their accounts show that they owed about €470 million to the Goldman-linked entities that issued the notes at the end of 2021.