“Following a request for proposals issued earlier this year, the National Asset Management Agency (NAMA) has today published a Contract Award Notice for the provision of investment management services to a Qualifying Investor Fund (QIF).
This Contract Award Notice does not constitute a contract award on behalf of the National Asset Management Agency (NAMA) or a contracting authority.” NAMA statement 1st November 2012
Well, the closing date for receipt of tenders for investment managers for NAMA’s so-called Qualifying Investor Funds or QIFs was 6th March 2012 and it is only today that NAMA has awarded the contract to Mercer Global Investments Europe Limited, or rather instead of awarding the contract, NAMA has undertaken to recommend the appointment of Mercer to the board of the QIF. Confused?
The background is this – despite all the interest in NAMA property which NAMA keeps on harping about, NAMA wants to create a separate vehicle which will buy property from NAMA and manage it. QIFs allow rich individuals and companies to pool their money and buy larger properties and NAMA figures, despite ALL the international investors beating its doors down to buy its property, that establishing such investment funds will lead to a better return for the Agency. NAMA might be right in its strategy but it is telling that it is NAMA establishing the QIF and not some third party.
NAMA announced it was creating QIFs in January 2012. It is not clear why there has been such a delay in progressing the initiative, but the regular audience on here will recall it took NAMA a year after it was first announced, to launch its deferred mortgage initiative. The fact it has taken eight months for NAMA to appoint a manager doesn’t really inspire confidence in either the Agency or its support for QIFs. NAMA has yet to appoint a custodian and administrator for its QIFs, the closing date for tenders was again eight months ago on 15th March 2012.
It seems that now NAMA will create a QIF regulated by the Central Bank of Ireland and will then appoint a QIF board, though it hasn’t explained how, and when the board is created, NAMA will recommend the appointment of Mercer as an investment manager. The QIF will then buy assets from NAMA or its receivers or developers but not before getting an uptodate valuation and undertaking due diligence, and then Mercer will manage the asset. Politicians who expressed concerns earlier this year that NAMA was creating Mini-me incarnations of itself were fobbed off with vague assurances that this was not the case.
Mercer Global Investments Europe Limited is an Irish company incorporated in 2006 and is owned by the Mercer group. Its directors are Tom Brennan (50), Paul O’Faherty (55) and Michael Dempsey (36).
On a related theme, it is a shame that Minister Noonan has failed in the past 20 months to deliver on his promise to introduce Real Estate Investment Trusts to Ireland which might have citizens of more modest means to invest in property if they so desired, in a simple tax-efficient manner.
The Sinn Fein finance spokesperson Pearse Doherty asked Minister Noonan about NAMA’s progress with QIFs and the Department of Finance’s progress with REITs on 25th September, 2012. The full parliamentary questions and responses are here.
Deputy Pearse Doherty: To ask the Minister for Finance when the National Asset Management Agency expects to make an appointment for the provision of investment management services for its proposed qualified investments funds, the tender for which was issued on 25 January 2012 with a closing date for bids of 6 March 2012.
Deputy Pearse Doherty: To ask the Minister for Finance when the National Asset Management Agency expects to make an appointment for the provision of custodian and fund administration services for its proposed qualified investments funds, the tender for which was issued on 3 February, 2012 with a closing date for bids of 15 March 2012..
Deputy Pearse Doherty: To ask the Minister for Finance when the National Asset Management Agency expects to launch its first qualified investment fund; the anticipated value of the QIF; the nature of the assets that will be managed by the QIF; and how the QIF will be marketed..
Minister for Finance, Michael Noonan: I intend to take questions 111, 112 and 113 together.
I am advised that NAMA, for and on behalf of the QIF, will make an announcement shortly as to the outcome of the tender competitions for investment manager and for custodian and fund administrator.
I am further advised by NAMA that the Qualifying Investor Fund (QIF) is expected to be launched, subject to regulatory approval, at the end of 2012. NAMA advises that the QIF will publish a prospectus which will set out the subscription process for QIF shares. Investment in the QIF will be limited to qualifying investors (as defined by the Central Bank rules)
Deputy Pearse Doherty: To ask the Minister for Finance if he has plans to introduce legislation to give effect to so-called Real Estate Investment Trusts in NAMA; and if he has, the timetable for the introduction of such legislation..
Minister for Finance, Michael Noonan: I wish to inform the deputy that the introduction of Real Estate Investment Trusts (REIT’s) legislation is being kept under review by my Department. I am aware of NAMA’s interest in this structure as another option in monetising their portfolio.