TETRARCH Capital, one of the first investment groups to buy Irish commercial property after the bust, is raising a €200m fund to acquire more assets and flip some existing hotel and office properties onto high net worth investors.
The group, previously known as Brehon Capital, is raising €100m of equity through Merrion Capital, according to sources, and plans to match that figure with €100m in debt. A presentation was made to more than 70 financial advisers last week at the luxury hotel and golf resort Mount Juliet in Co Kilkenny, which is owned by Tetrarch.
Despite rising property prices and competition for assets, the company told potential investors that there was still an opportunity to make strong returns, according to one source.
It focused on its track record of turning around difficult assets, such as buying and completing the Marker hotel and apartments in Dublin, and acquiring the former Ritz-Carlton hotel in Co Wicklow from insolvency.
Those high-profile assets are not likely to be sold into the new fund, though it is expected to buy hotels and office properties from Tetrarch. New assets will be acquired and some of the funds used for capital investment.
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Tetrarch has been backed by a small group of overseas investors, including Midwest Holding, owned by the Swiss-based Spitzer family. Sources said Tetrarch was targeting more long-term funding from high net worth investors, family offices and Irish institutions and pension funds.
It has told prospective investors that it is aiming for an initial closing of the fund by November and will do its first deals in December.
The fund should be fully invested by next summer. The principals of Tetrarch — Michael McElligott, Jim Byrne, Damien Gaffney and Ciara McElligott — will invest in the new fund. It will be structured as a qualifying investor alternative investment fund, which has tax advantages for investors.
Tetrarch co-owns and manages assets worth about €450m, including the Citywest hotel in Dublin, some regional hotels and several office blocks.