When we hear talk of ‘vultures’ and ‘vulture funds’ it’s usually in highly negative overtones. That’s why the name-calling exists in the first place, the idea is to imply you have these groups that feed off the dead bodies of an innocent party.
Put this aside and realize that even if a company does feed off the assets of a failed one, that it doesn’t mean the firm that failed was somehow an innocent bystander. Usually they lost their market share and assets as a result of their own decisions and by definition a liquidator would sell these on to somebody.
Whether that ‘somebody’ is a person, fund or regular company hardly matters. What does matter is that we have a housing crisis and that these same ‘vultures’ will likely be delivering about 75% or more of private new housing in Dublin where the problems are most pronounced.
Take a look at some of the numbers in new developments:
* Lone Star own 600 acres of land in Dublin with the potential for 7,000 homes: in Adamstown, where it has partnered with developer Joe O’Reilly’s Castlethorn Construction; Portmarnock, where it is working with Ballymore Development; and Skerries.
* Cairn Homes also have major holdings in Adamstown, granted they are a listed firm, but they did obtain considerable site presence by buying distressed assets and that is why they are in the list.
* Centrebridge – 4 sites (Rathfarnham, Hollystown, Portmarnock and probably about 1,000 units)
* Oaktree Capital Management, Mars Capital Ireland – Docklands, Drumcondra, Greystones – c.700 units
* Abu Dhabi Investment Authority (Trinity), c. 500 units
* Hines – Rathmichael around 4,000 units
* M&G – 30 sites dotted around Dublin and around 2,700 units
* Blackrock – North Docks site with O’Flynn c. 900+ student accommodation beds.
Given these numbers it supports the view that while these firms may have been buying assets from failing companies, that these same buyers didn’t do it with a view to just letting them sit there, they will be utilized and developed to the betterment of the built environment.
This is a key point that is usually missed when talking about vultures, they are an important part of the financial and business ecosystem, without them what would the alternative reality look like?