Senator's family takes 25% stake in private equity firm

THE FAMILY of Senator Feargal Quinn has taken a 25 per cent stake in private equity firm Claret Capital, an investment that sees Claret founder Domhnal Slattery cede control over a majority of shares in the business.

The terms of the transaction were not disclosed, although Mr Slattery said Quinn Family Investments, as like-minded investors, were providing a “meaningful” sum of money which is going into the Claret as new shares.

This will enhance Claret’s capacity to engage in transactions in a market in which the supply of credit and equity investment are severely constrained.

Claret has two “refinancing events” this year and it is talking with its lenders and confident of a successful conclusion. The company declined to quantify the scale of these refinancing requirements.

The move to strengthen the balance sheet in the management firm that oversees Claret’s investment projects follows 12 redundancies in its Dublin headquarters at the end of 2008, a move that left 17 staff in the office. A further four staff left the firm’s operation in New York.

Mr Slattery said the “rightsizing” of Claret flowed from its recognition of the fact that the “rules of the game changed” in the investment business as a result of the turmoil in international markets. Still, Claret believes there is “profound value” to be achieved in many asset classes as a result of pressures on global markets.

The Quinn family, who realised a total of €450 million from the sale of the Superquinn supermarket chain four years ago to a consortium of Irish property developers, have invested in a number of Claret projects since Mr Slattery established the firm in 2005.

These include start-up plane-hire business JetBird, whose service will be introduced from a base in Cologne next autumn, roughly six months behind its original schedule. The Quinn family has also invested in marine mobile business Blue Ocean Wireless.

Eamonn Quinn, son of Feargal Quinn, will join Claret’s board. Having been passive investors in Claret, Eamonn Quinn said the family decided to become active investors in the business, its deal-flow and its management team.

He said the family believed there was an attractive opportunity to invest in Irish-based companies with potential to develop operations in international markets, similar to JetBird and Blue Ocean Wireless.

Mr Slattery, whose controlling stake in Claret has been diluted to about 45½ per cent as a result of the Quinn investment, made light of the loss of his majority position. “It’s a natural evolution of the growth of a successful business to deepen and widen the shareholder base,” he said.

In addition, Mr Slattery pointed out that he and his partners – Tom McAleese, Bryan Maloney, Max Doyle, Ronnie Carroll and Paul Geaney – still control 75 per cent of the business. The fact that a minority position in the company was acceptable to the Quinn family signified confidence in the business, he said.