Nama's Project Eagle sale had unusual features, says property expert

Patrick Long said the Nama sale contained a lot of unusual features
Brian Hutton, Press Association

The £1.2 billion sale of Northern Ireland property loans by the Republic's toxic assets agency Nama was marked by unusual features, a property expert hired to advise on the deal has said.

Patrick Long, a managing director at international financial advisors Lazard, led an outside team asked by Nama to manage the sale of its so-called Project Eagle portfolio, which was bought by US investors Cerberus in April 2014.

Before a parliamentary committee in Dublin probing the controversial transaction, Mr Long said: "There were quite a lot of unusual features."

The property sale expert pointed out the fact there was only one round of bidding and few bidders involved for what was the largest property deal in Northern Ireland's history.

Mr Long also told the Public Accounts Committee that one of the first things Nama told Lazard was for the need to keep the sale "confidential".

"That was one of the first things that they told us," he said. "They viewed this transaction as politically sensitive."

The Project Eagle sale has been mired in controversy for more than a year after allegations were made about so-called success or fixer fees.

Another US company, Pimco, has said it pulled out of an earlier bid weeks before the deal was closed because it was asked for a fixer payment of £16 million for three parties behind the scenes.

The money was to be shared equally by Belfast businessman Frank Cushnahan, US law firm Brown Rudnick and Ian Coulter, a managing partner of Belfast solicitors firm Tughans, Pimco previously told the committee.

Mr Cushnahan was formerly a Nama adviser on Northern Ireland, on the recommendation of the DUP.

Brown Rudnick and Tughans also advised Cerberus on the successful deal.

All parties have denied any wrongdoing.

Mr Long said he didn't really know what information the winning bidder Cerberus got from Brown Rudnick and Tughans.

"I could not really say whether it was conferring unfair advantage on them or not," he added.

Mr Long said success fees are commonplace in large property deals and Lazard was also working for Nama on a no deal, no pay basis.

"Our fee was only payable on success... this is standard market practice, it is not something I'm embarrassed about," he told the hearing.

Mr Long stood over the sale process, saying it was "appropriate, given Nama's objective" and had "achieved the highest price for the portfolio available in the market at the time".

"We were motivated to achieve the highest price possible, that is how success fees work," he added.

"I have seen no evidence that suggests a different process would have achieved a higher price."

The Republic's spending watchdog has said Nama lost taxpayers up to £190 million on the Project Eagle sale.

The Comptroller and Auditor General said the agency undervalued loans associated with the 800 properties in the portfolio.

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