Private investment group sold for ?5 million

Former Ireland rugby international Mr Brendan Mullin is to sell his private clients' investment business to a company controlled by Four Seasons Hotel shareholder Mr Derek Quinlan for close to €5 million.

The Irish Times learned last night that Mr Mullin has agreed to sell Powerscourt Capital Partners to Quinlan Private. It is understood that Powerscourt will change hands for €4-€5 million.

The deal is subject to approval by the Irish Financial Services Regulatory Authority (IFSRA).

Mr Mullin, his colleague Mr Nick Gallagher and Trintech chief executive Mr Cyril McGuire are shareholders in Powerscourt. Mr Gallagher and Mr McGuire are also non-executive directors of the business.

Since it was founded in 1999, it has built up investments in the Irish and UK private equity markets, worth more than €30 million. It is a shareholder in telecoms company Openet and in internet security specialist Vordel, among others. It also has "significant" public funds under management.

Its most recent returns to the Companies Registration Office (CRO) show that it had net assets of €933,000 at the end of 2002, down from €1.3 million a year previously. Its profit and loss account was in the red to the tune of €800,000, up from a loss of €400,000 a year earlier.

Mr Mullin was a member of the last Irish team to lift the Triple Crown in 1985. During his career, he worked with Davy Stockbrokers but left to form Powerscourt.

Mr Mullin will be joining Quinlan Private. The firm's chairman, Mr Derek Quinlan, said the decision to buy Powerscourt was strategic. His business had been looking for fund management and private equity opportunities. The firm is already active in property investment.

Mr Quinlan led the group of investors behind the Four Seasons Hotel in Ballsbridge, Dublin. Other investors included European judge Ms Fidelma Macken, former attorney general Mr Peter Gleeson and property developer Mr Mark Kavanagh. The banks involved in backing that project appointed a receiver during construction in late 2000, when the developers, Simmonscourt Holdings and Harvard Developments, began to run out of cash.

Under the original deal, Mr Quinlan and his partners, the Nollaig Partnership, had agreed to buy the hotel from Simmonscourt and Harvard for €76.2 million once it was built. The original estimated cost of construction was €63.5 million, but there was an overrun of €12.7 million when the receiver stepped in.

The banks had loaned money to Simmonscourt and Harvard. The crisis ultimately lead to Bank of Scotland, Anglo Irish Bank and Scotia Bank issuing proceedings against the lead bank, ACC Bank. As part of the final settlement, Harvard sold part of its interest to Mr Quinlan at a loss.

Quinlan Private has an interest in Four Seasons hotels in Milan and Prague.

He and another developer, Mr David Arnold, paid €40 million for a 12-acre site at Galloping Green on Dublin's southside.