Thursday December 06 2007
AN investment fund spearheaded by financial evangelist Eddie Hobbs and aimed at regular savers has raised just a fraction of its multi-million euro targets.
Yesterday Brendan Investments Pan European Property Plc announced it had raised €13m for the purchase of property in Germany and Portugal - compared to its original targets of between €50m and €250m.
The investment figures were released yesterday evening at the same time as Finance Minister Brian Cowen was announcing the budget in Leinster House.
A huge publicity drive surrounded the announcement of the investment vehicle fronted by Mr Hobbs.
The founders had aimed to raise up to €250m by selling shares with a minimum subscription of €5,000, opening the scheme up to small investors.
It would then borrow three times the investment, up to €750m, which would bring the fund to €1bn.
Yesterday the company said the fund would now amount to €50m, of which €13m came from investors.
Included in the €13m fund is at least €1m put forward by the five-strong board of the fund, on which Mr Hobbs is a non-executive director.
Last night managing director Vincent Regan said the difficult financial conditions in the economy at present had affected investments.
“Our target was €50m. The environment is disappointing, rather than our investment. While the maximum that could have been raised was €250m, the target was €50m,” Mr Regan said.
"When we started in mid-2006, the climate was completely different. During our fundraising period, bank shares halved, there was the credit crunch and people are sitting on their money.
“We are happy at the same time in the sense that we have come through all this. We have come through it and we have a €50m gross value company which we intend to go on and drive shareholder value.”
The primary focus of the fund would be on investments in German commercial property and tourist developments in Portugal, he said.
Almost 700 investors put an average of €19,000 into the fund, many of whom were individuals from Dublin and Cork.
The offer was closed last Friday and letters issued to all shareholders at the start of this week. Mr Regan said yesterday was the first day all shareholders were aware of the details.
When launched with huge fanfare in September, the fund made the point of being open to the common investor and separate from “golden circle syndicates”.
A national roadshow took place and travelled the country trying to convince people to put money into the fund, which is to last between seven and 10 years.
Along with Mr Hobbs and Mr Regan, the board also consists of Hugh O’Neill of Deloitte Corporate Finance, property developer Pat Owens and Dermot Flanagan SC.