New report highlights Irish government facilitation of vulture funds. Growing risk to Irish homeowners highlighted

national | housing | press release Tuesday May 03, 2016 23:00 by DDCI - Debt And Development Coalition Ireland hello at debtireland dot org Unit F5 Spade Enterprise Centre, North King Street Dublin 7 +353 1 6174835

Press Release - Tues May 3rd

DDCI calls on incoming Government to prioritise strict regulation of controversial funds

A new report released today (Tuesday May 3rd) by Debt Development Coalition Ireland highlights the manner in which vulture funds have aggressively bought up large volumes of debt in recent years, and how this form of financial speculation has had hugely negative social impacts both in Ireland and the Global South.

Entitled "From Puerto Rico to the Dublin Docklands: Vulture Funds and debt in Ireland and the Global South" the report shows how the Irish government has actively facilitated vulture funds through both the IBRC and NAMA.

Table of top ten vulture funds operatoring in Ireland

DDCI calls on incoming Government to prioritise strict regulation of controversial funds

A new report released today (Tuesday May 3rd) by Debt Development Coalition Ireland highlights the manner in which vulture funds have aggressively bought up large volumes of debt in recent years, and how this form of financial speculation has had hugely negative social impacts both in Ireland and the Global South.

Entitled "From Puerto Rico to the Dublin Docklands: Vulture Funds and debt in Ireland and the Global South" the report shows how the Irish government has actively facilitated vulture funds through both the IBRC and NAMA. http://www.debtireland.org/download/pdf/ddci_vulture_funds_report.pdf

For example, Texas based Lone Star Capital bought 60% of all assets brought to market by IBRC, while 90% of assets sold by NAMA went to US firms, the majority to private equity firms.

DDCI Director, Maeve Bateman, said:

“Vulture funds have earned their nickname through the aggressive and unusual tactics they pursue. The government has welcomed vulture funds into the Irish property market, without properly considering the impact. We would call on the incoming government to prioritise this issue. Immediate steps need to be taken to find out just how many mortgages are owned by vulture funds unregulated by the Central bank, and to ensure that the tenants and homeowners living in these homes are better protected.

The relatively recent role of vulture funds in the Irish market highlights the ongoing impacts of our own debt crisis, and shows the case for an independent global sovereign debt resolution mechanism has never been clearer”.

The report’s author, Dr Michael Byrne of the UCD School of Social Policy, said:

“The funds’ history of aggressive asset management strategies poses significant risks for tenants and homeowners in Ireland whose homes are now simply assets on balance sheets for the funds, highlighted by the recent case of tenants in Tyrrelstown and business closures such as Clery's.”

The report recommendations include:

· The creation of an international sovereign debt resolution mechanism; · Legislation to bring about much improved transparency regarding the actions of vulture funds and to bring them under the regulation of the Central Bank · Greatly strengthened legal protections for mortgage holders.

ENDS

For further information contact Maeve Bateman, Director, Debt and Development Coalition Ireland, 01 6174835 / 087 2069017

Note to Editor: Vulture Funds are typically hedge funds or private equity firms who invest in bad debt. Bad or 'distressed' debt can be bought and sold on the secondary financial markets, and offers particular opportunities to achieve super-normal profits to investors who can buy it cheap and find a way to make the investment come good. Vulture funds operate in situations of crisis, pursuing aggressive and unusual strategies to take advantage of the misfortune of others. This form of financial speculation, and the lack of regulation in the financial system to manage it, has been shown to have hugely negative social impacts, both in Ireland and the Global South.

DDCI will have a public event on Wednesday with the report author Michael Byrne, David Hall and Tony Romano, a US housing activist. Event details are: http://www.debtireland.org/events/2016/05/04//

From Puerto Rico to the Dublin Docklands
Vulture funds and debt in Ireland and the Global South

This report was commissioned by DDCI and written by Dr. Michael Byrne.

Table of Contents

1. Introduction 2
2. Vulture funds: speculating on debt and crisis 3
3. Vulture funds and sovereign debt in the global south 4
4. The vultures come to Europe 6
4.1) The European financial crisis: an investment opportunity for vulture funds 6
4.2) Ireland’s great property give away 8
4.3) Understanding the risks posed by vulture funds in Ireland 9
4.4) The role of the Irish government in attracting vulture funds 10
5. Vulture funds, distressed debt and global financialization 12
6. Clipping the vulture’s wings: recommendations 14
6.1) Vulture funds in the global south: recommendations 14
6.2) Vulture funds in Ireland: recommendations 15
6.3) Financial crisis and distressed debt 16
Annex 1. Case Studies 17
Annex 2. Further Reading 20

Report - From Puerto Rico to the Dublin Docklands: Vulture Funds and debt in Ireland and the Global South 1 Mb