Yes, it’s acronym Friday! You might recall that this time last year, NAMA announced that it was setting up so-called Qualifying Investor Funds (or “QIFs”) which are property funds where investors with more than €100,000 to spare can invest in the fund, to which NAMA will sell property. In summary, it’s a means for NAMA to sell its property to syndicates of investors. NAMA even tendered for administrators and managers of the QIFs and committed to launching at least one QIF in 2012. Things seemed to drag in 2012 and it was not until November 2012, that NAMA appointed a QIF manager, Mercer Global Investments Europe – related to the crowd doing the expert report on bank pay and perks for Minister for Finance, Michael Noonan right now, and also part of Marsh and McLellan.
And then in December 2012, Minister Noonan at last announced Real Estate Investment Trusts (or “REITs”) – which are similar to QIFs but have a few differences, they were promised in the Fine Gael General Election manifesto in 2011, but despite several chaser questions from the Opposition in the past two years, it wasn’t until December 2012 that the Minister announced them and they will now be imminently introduced in the forthcoming Finance Bill 2013.
However, it now appears that NAMA is considering the future of QIFs after the announcement of REITs and the Agency may well decide to abandon the QIFs altogether.
What does all of this mean? REITs will be more transparent and will be quoted on the Irish Stock Exchange it seems. They will also be available to smaller investors, so if you fancy a punt on Irish property, you will be able to satisfy that weakness with hundreds of euro. Your stake in a REIT is akin to a share in a company and can be bought and sold at a market price, which with any luck will be liquid – contrast with trying to sell a house in a day! QIFs are less transparent, have a minimum investment of €100,000 and as far as I can see, were only considered by NAMA because of the foot-dragging in introducing REITs.
Here are the full parliamentary questions from Sinn Fein’s jobs, enterprise and innovation and justice, equality and defence spokespersons Peadar Tóibín and Deputy Pádraig Mac Lochlainn.
Deputy Peadar Tóibín: To ask the Minister for Finance further to his announcement of introducing legislation to give effect to Real Estate Investment Trusts, if he has consulted with the National Asset Management Agency with respect to its planned launch of Qualified Investor Funds; and if NAMA remains committed to launching QIFs in view of his announcement with respect to REITs..
Minister for Finance, Michael Noonan: I am advised by NAMA that it is very supportive of the Government’s decision to introduce REITs legislation. Officials in my Department have been in regular contact with the Agency in relation to the introduction of QIF’s and I am advised that the Board of NAMA is currently considering its approach in light of the forthcoming REITs legislation.
Deputy Pádraig Mac Lochlainn: To ask the Minister for Finance further to his announcement of introducing legislation to give effect to Real Estate Investment Trusts, if he will outline how REITs will be regulated here; the persons will be responsible for regulation and the competencies and qualifications needed for appropriate regulation of REITs..
Minister for Finance, Michael Noonan: The details of the legislation which will provide for Real Estate Investment Trust (REIT) status for qualifying public limited companies will be published in Finance Bill 2013.
An Irish REIT will be subject to relevant provisions of the Companies Acts, and will be required to comply with the requirements of various European Directives including the Prospectus Directive, Transparency Directive, Market Abuse Directive and the Markets in Financial Instruments Directive (MiFID).