BoI sells real estate business to US firm

BANK OF Ireland has sold a business that manages commercial investment property for the bank’s clients to a Californian real estate company for an undisclosed sum.

Bank of Ireland Real Estate Investment Management was sold to the Beverly Hills-based company Kennedy Wilson. Neither the bank nor the US firm would disclose the price paid. Only a nominal sum – relative to the €5.2 billion that the bank must raise for its recapitalisation – is believed to have been paid as the US firm is not buying the assets.

The BoI unit manages €1.6 billion ($2.3 billion) worth of investment property, mostly in Europe, comprising 19 assets, including offices, shops and apartments.

Management is taking a “substantial minority stake” in the firm as part of the takeover, said William McMorrow, chairman and chief executive of Kennedy Wilson.

The firm employs 13 and will continue to be run by managing director, Peter Collins under the name of Kennedy Wilson Europe.

Mr McMorrow said he first took an interest in buying the business when he met management at the bank on a visit last December.

The acquisition will bring investment assets under management at the US company to $9.7 billion.

Mr McMorrow bought Kennedy Wilson in 1988 and purchased property assets from distressed banks in Japan in 1993 following the collapse of the country’s property market. In 2002 the firm’s Japanese subsidiary was the first property company to be listed in Tokyo.

Kennedy Wilson, which is valued at $800 million on the New York Stock Exchange, plans to expand the European business in its Dublin and London offices.

“What we are doing here is exactly what we did in Japan. We are not like a private equity firm who are more like carpetbaggers waving a cheque book. We are hoping to be here for a much longer time.”