A recent report has suggested that Sankaty, a well-known leading global credit specialist is now looking towards lending in Ireland. It was reported that Sankaty has been planning to raise up to $1 billion for a lending fund intending to target businesses that have found it difficult to gain funding in the wake of the recession – in particular, those in the construction sector.
Sankaty have teamed up with Irish financier Dermot Desmond to back a new venture called Broadhaven Credit Investments, which was officially set up on June 24th 2014. The venture is being fronted by Stewart Doyle and David Cullen and is backed by Sankaty London team.
Broadhaven has earmarked €200million to support house construction in Ireland, one of the sectors of Irish business which has been hit hardest by the financial crisis. The hope is that this extra funding may reduce the risk of another housing bubble, and by extension the consumer may see a reduction in the skyrocketing house prices. Broadhaven is prepared to support credible house builders in Ireland. Despite having its primary focus be on the construction sector, Broadhaven also intends to widen its gaze to the wider lending world by extending its funds to some Irish SMEs.
It is believed that while the initial seed capital for Broadhaven is estimated at €200million, there will be additional opportunities for this seed capital to grow exponentially over time. Sankaty has told potential investors in its new fund that the middle market presents an opportunity to earn “attractive risk-adjusted returns with significant premiums to the liquid credit markets. Structural changes in the global banking sector continue to constrain traditional lenders, leaving a supply and demand imbalance for middle-market financing.”
Since the company’s inception, Sankaty has invested over $7.5 billion in middle market investments and brings a debt-oriented approach to funding, and the move to the construction sector is an interesting one for such a huge company. Similarly, the move into this sector for such a well-known financier as Dermot Desmond may suggest that the long-suffering housing market in Ireland may indeed be about to pick up.
The funds being raised for this venture will have a six-year lifespan and offer funds over a three-year period. These funds may be an attractive prospect for you and your business. Should you require any assistance on how to manage your funds or repayments we here at DCA Accountants are here to offer you advice and assistance.