The Ireland Strategic Investment Fund, managed by the National Treasury Management Agency, has linked up with KKR Credit for a new €500m joint venture that is claimed will be capable of financing the construction of over 11,000 new homes.
The new entity, Activate Capital, will focus exclusively on lending to Irish residential development projects. The lending platform will facilitate home-builders in engaging on medium/large scale housing schemes, delivering a material increase in housing supply.
Activate Capital said it will lend on a commercial basis to projects, providing home-building companies with cost effective loans for up to 90% of the total financing requirement.
The ISIF will contribute €325m towards the joint venture, making it the biggest single investment yet undertaken by the ISIF. KKR will provide the remaining €175m.
Activate Capital will be managed by CEO Robert Gallagher and chairman Dan O’Connor.
In Association with
Gallagher is a director with KKR with responsibility for the firm’s investing activities in Ireland. O’Connor is former CEO of GE Consumer Finance and a former Executive Chairman of AIB Group plc.
Capnua Corporate Finance and Dan O’Connor developed the Activate Capital proposition and advised on the establishment of the platform.
Finance minister Michael Noonan stated: “Activate Capital will be an important source of funding for increasing the supply of medium to large housing developments. The announcement is a win-win for the State from all perspectives.”
The €7.6 billion ISIF was established in December 2014 with a statutory mandate to invest on a commercial basis in a manner designed to support economic activity and employment in the State.
The fund was formerly the National Pensions Reserve Fund, which was intended to fund future State pension commitments.
Fergal McAleavey, ISIF (left); Johannes Huth, Head of KKR EMEA; Michael Noonan; and Dan O'Connor (right)
