Bank-backed Pearl fund pledges to inject €50m into urban housing


A new €50m institutional fund backed by the State, AIB and Bank of Ireland is pledging to help build 2,000 new homes nationwide by 2022.

The Pearl Residential Equity Fund, founded by Ken McCullagh and Martin Scully, says it will provide up to €5m in equity for helping small and medium-sized developers to build the first 2,000 homes.

Mr McCullagh said the fund would focus on mid-sized projects of up to 200 units in Dublin, Cork, Kilkenny, Limerick, Galway and other urban sites.

He said SME developers often still struggled to secure finance, following the property crash a decade ago.

"With private equity and hedge fund financing mostly targeting larger builders and large-scale developments, the lack of liquidity for smaller developers is a constraint on the supply of new housing stock," said Mr McCullagh, who since 2001 has been chief executive of LNC Property Group.

Mr Scully oversees private equity investments for Oyster Capital Partners, another backer of the Pearl fund.

Mr McCullagh said Pearl would require developers to co-finance all projects.

"It's very important that developers have a personal investment in the development," he said. "We are not developers, we will not be buying land or sites directly, and we won't finance unzoned or agricultural land projects. This is about providing support to smaller builders who can add to our housing stock and help address the housing shortage."

Aidan O'Hogan, former managing director of Hamilton Osborne King (acquired by Savills in 2006), will chair Pearl's investment committee.

The Ireland Strategic Investment Fund (ISIF) said it was backing Pearl as part of the State agency's €916m funding of new housing nationwide.

ISIF's senior investment director Kieran Bristow said: "Increasing the supply of new homes - both for owner-occupiers and for renters - is a key element of ISIF's investment strategy."

AIB head of investment banking Finlay McFadyen said Pearl's investment was important "given the supply-demand imbalance that has developed over the last 10 years".


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