RoundShield Partners, a €1 billion property investment house, has signed a €50 million social housing deal with debt advisory firm New Beginnings.
Under the terms of the deal, which are revealed in a letter seen by The Irish Times, the Irish firm will purchase, refurbish and manage residential properties for RoundShield, which has "agreed to provide up to €50 million in financing for residential acquisition".
The properties purchased by RoundShield will be let to local authorities for use as social housing under leases of 25 years.
New Beginnings is led by barrister and debt advisor Ross Maguire.
It is understood that the first commitment of funds could be just the beginning for the RoundShield project in Ireland, with one source saying that there were "substantially" more resources potentially available for the project.
“The fund has discretionary capital significantly in excess of the requirements related to the possible acquisitions,” according to the letter. Sources with knowledge of the matter said the RoundShield fund had already begun purchasing units and was on the hunt for more deals, including potential off-market transactions.
In a statement, RoundShield chief financial officer Herbert Beckman confirmed that the firm, through its Irish social housing fund, was “acquiring residential properties to support Irish local authorities in the provision of social housing”.
He said the fund was “concentrating on properties that need substantial renovation, or those being sold with social tenants remaining in situ”. The fund is being administered by Davy Stockbrokers, through a Central Bank structure known as an Irish collective asset-management vehicle.
New Beginnings was founded in 2010 by Mr Maguire, a senior counsel, and David Hall, the debtors’ rights campaigner. However, the pair had a falling out and have now found themselves on opposite sides of the debate about mortgage debt and the role of private-equity funds in the Irish market.
Since then, the firm has expanded to include in its work a range of commercial funding products, including bridging and mezzanine loans for values above €1 million.
RoundShield Partners has raised more than €1.4 billion for a variety of investment platforms, but its focus is European asset-backed “special opportunities”. The fund was established in 2013 by three former executives from capital market company ESO Capital.
Sources said the deal showed that social housing was becoming an increasingly attractive asset class for overseas investors. While investing in housing for low-income people may not offer the rapid climbs in asset value provided by grade-A offices or high-end residential developments, it allows investors to tap into regular, reliable and government-backed income streams.