Oaktree nears full exit from Glenveagh after share spike

US private equity giant Oaktree Capital has sold most of its remaining shares in Glenveagh Properties, the housebuilder that it floated on the Dublin and London stock markets four years ago to spin off residential development sites bought following the crash.

Oaktree now has a 1.18 per cent remaining stake in Glenveagh, down from 16.5 per cent immediately after the company’s €550 million initial public offering (IPO) in October 2017 and 4.79 per cent when the group reported strong interim results last Thursday, according to stock exchange filings.

The latest share sale, raising about €35 million across last Friday and Monday, took advantage of a spike of as much as 7.8 per cent in the stock after the results. Glenveagh has also been running a €75 million share buyback programme since late May.

Los Angeles-based Oaktree led the formation of Glenveagh by combining Irish development sites it had acquired with the assets of Maynooth-based builder Bridgedale.

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Oaktree sold half of its original 110 million shares in Glenveagh in July 2018 as the housebuilder went about raising €215 million in a separate share sale to fund further land acquisitions and development. This left Oaktree with a 6.34 per cent stake.

The US firm started to sell down its remaining stake between March and April of this year, before picking up the pace last Friday, according to the filings. With its stake now below 3 per cent, the company is no longer obliged to disclose further stock disposals.

The share sales since the IPO have raised an estimated €110 million for Oaktree, with its remaining stock worth more than €10.5 million.

Resigning

The selling follows on from former Oaktree executive Justin Bickle resigning as founding chief executive of Glenveagh in August last year to return to the UK.

He was succeeded as chief executive by Stephen Garvey, another co-founder of the business, who was previously its chief operating officer. Mr Garvey founded Bridgedale in 2003.

Glenveagh said last week, as it reported a 245 per cent annual surge in sales to €127.5 million for the first half of the year, that it has sold, signed, or seen buyers reserve all the 1,150 homes that it expects to deliver in 2021. And it has already secured reservations on 300 homes that will not come on stream until next year.

Mr Garvey said the company was focused on “ramping up to 3,000 units” a year by 2024 as the Republic grapples with a housing crisis that has seen buying prices and average rents surge and the supply of new homes stall.

Mr Garvey said Glenveagh had returned to profitability and increased its output despite headwinds caused by Covid-19 and would continue to scale up its business.

Glenveagh completed 322 homes in the first half of the year, despite a 13-week lockdown of sites as the Government tried to suppress the coronavirus pandemic. This was more than double the number of homes completed in the first half of 2020, which was also complicated by lockdown restrictions.