The announcement of Cerberus as the preferred bidder for NAMA’s ‘Project Arrow’ portfolio highlights NAMA’s flawed disposal strategy which is placing massive influence over the future of the Irish economy in the hands of a tiny number of global investment giants, according to Fianna Fáil Finance Spokesperson Michael McGrath.
Deputy McGrath commented, “This transaction again highlights the flawed disposal strategy of NAMA. By bundling together loans with a book value of €6.25bn across over 300 borrowers, NAMA has dramatically narrowed the pool of potential purchasers. Little consideration has been given to the longer term consequences for our country of giving such a vast level of influence over our economic future to a tiny number of global investment giants. Over 90% of NAMA loan sales have been to US private equity or investment firms. It is clear that NAMA has been placed under political pressure by the government to accelerate its disposals and this is shaping the agency’s approach.
“The evidence I have witnessed on the ground is that these US equity and investment firms are taking a very aggressive approach with the debtors whose loans they have bought from NAMA. These firms do not have any long term interest in the Irish economy and instead will look to flip these loans in a short few years. In the meantime, they will cherry pick the best assets underpinning these loans and repossess them in short order. The damage this will cause to going concern businesses and the employment those businesses provide seems to be of little concern to government.
“Given the level of scrutiny that has been placed on Project Eagle, which was also bought by Cerberus, I find it more than a little coincidental that NAMA makes this announcement on the Friday afternoon of a Bank Holiday weekend. The announcement also comes less than 48 hours after the conclusion of a two-night Dail debate on a Fianna Fáil private members’ motion on the sale of the Northern Ireland portfolio, Project Eagle”.