Private equity giant eyes Irish investments

The largest private equity firm in the world, the Carlyle Group, is looking for investment opportunities in Ireland, according to its founder and co-chief executive, William Conway.

He declined to say whether Carlyle is currently in negotiations to acquire state-owned or property assets.

“There is nothing that I can talk about at this time. I have high hopes but we will have to wait and see,” he said, in an interview with the Irish Examiner.

The company, which has €170bn of assets under management, already has a joint venture with Cardinal Capital to manage a fund to invest in SMEs on behalf of the National Pension Reserve Fund.

Carlyle had looked at Ireland a few times before the joint venture with Cardinal and “found the economy intriguing”.

“I feel enormous pressure to do a good job for Ireland. The national pension fund is now down to about €5bn and the Government has entrusted part of that to us. I feel excited and humbled by this responsibility.”

Mr Conway, whose great-grandfather hails from Co Tipperary, said whether the Government secures further relief on the €64bn of bank debt will not influence Carlyle’s investments in the country. “We are looking at opportunities on a case-by-case basis.”

He believes what is needed is growth and Carlyle is prepared to do whatever it can to help.

“Our plan is to use our 1,400 personnel, 650 professionals, 32 offices worldwide and various industry specialists and bring that to bear to help Ireland.”

“We own about 200 companies and some of them might be able to put jobs and investment in Ireland but only if it makes sense. They have to do what is best for them as well.”

He describes the Irish economy as “not so bad and not so good”. The not so bad includes the ability to issue a 10-year bond at a yield of 4.15% and evidence that the unemployment rate has peaked.

But the not so good includes a budget deficit of 8% and a banking system that has not been properly repaired yet.

“But the economic environment is not the same as the investment environment and the investment environment is not the same as the economic environment. You can make good investments in a lousy economy and lousy investments in a good economy.”

He cites Wilbur Ross’s punt on Bank of Ireland as a “fabulous investment at a time when the economic environment looked horrible”.

In view of the size of the collapse of the financial system and the economic downturn in Ireland, the recovery is going to be slow.

Markets are rallying because globally, central banks flooded the economy with money, which flowed into equities looking for returns.

But the global macro economic fundamentals are improving.

He praises ECB governor Mario Draghi for drawing a line under the crisis by saying that he would do whatever it takes to save the euro.