FUND SELL-OFF:AN ASSET manager who oversees more than €4 billion of debt sold approximately €20 million worth of assets last week because of falling values.
Donal Daly of Avoca Capital said the disposal from the Avoca Credit Opportunities plc fund was done in order to prevent a triggering event that would have otherwise occurred because of the falling values.
Mr Daly said the fund was of the order of €150 million in value and 10 to 15 per cent was sold off in order to prevent declining values forcing an asset sale. He said the fund in question was very "lowly leveraged". The proceeds from the sale of assets were used to further reduce the leveraging on the fund.
The funds are subject to tests concerning the value of their assets as against their liabilities. Failure to pass the tests results is a triggering event.
Avoca Credit extends loans to enable leveraged buyouts of major companies, including Eircom and Smurfit. Mr Daly, a founding principal of Avoca Capital, said the value of the fund's assets, which are marked to market value, are suffering from "contagion effects" arising from global market conditions.
"But our mark to market fund represents only 3 per cent of our total assets under management. All our other funds are not affected," he said.
Avoca manages more than €4 billion on behalf of a range of institutional investors almost all of which are international. It was established in 2002 by Mr Daly and Alan Burke, both formerly of AIB. Last year the company agreed to pay what was reported as a record rent at the time for a 25-year lease on one floor of the former Department of Justice building on St Stephen's Green in Dublin.
