Lotus Investment launches €250m housing fund

Lotus Investment Group, the Dublin-based private equity firm, has launched a €250 million fund for Irish housebuilders less than two months after its Israeli backer acquired full ownership of the investment management firm.

The alternative lender, which has been active in the Irish residential property market since 2013, said the new fund is targeted at builders looking to finance projects of up to 500 homes, with funding of up to €50 million available. It can also fund the acquisition of zoned land and land with planning permission already in place, Lotus said.

“Credit decisions can be made within a week, as clients will be dealing directly with the key decision makers from day one, with full transparency on fees and loan terms,” said Lotus managing director Ian Lawlor.

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Loan terms run from six months to three years, the firm said, and funding of between 70 per cent to 90 per cent of costs is available depending on the project.

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Lotus said that its “increased capital strength” following Tel Aviv-based Meitar Investment House’s acquisition of full ownership of the Dublin-based firm in May will make the new fund an attractive proposition for developers.

Mr Lawlor said that Lotus was “very lucky” to have Meitar, which originally took a 60 per cent stake in the business in 2019, on board against the backdrop of rising interest rates globally.

‘Alternative lenders’

“Rates have gone up now and a lot of funding models that are out there are no longer fit for purpose,” he said. “A lot of the big institutions behind some of the alternative lenders are going to waver in what they’re going to be doing and how they are going to be deploying their money.” But he said: “We’ve got multiple sources of funding. We’ve got high net worth individuals, we’ve got third party funding, we’ve got parent company funding — we’re lending off Meitar’s balance sheet.”

Mr Lawlor said the Irish alternative lending market is ripe for consolidation. “If I was borrowing from an alternative lender, I would be very concerned about where the funding is coming from in terms [of] if I’m building houses it’s an 18-month facility I’ve got, can that lender stay with me through the 18 months?”

Lotus says it has lent more than €400 million to Irish developers since establishing itself in the market in the wake of the property crash when funding for projects had largely dried up.