Derek Quinlan has gone from strength to strength to become a major deal-maker, writes Colm Keena

The accountant and former tax inspector Mr Derek Quinlan, who put together yesterday's purchase of the Savoy hotel group, has graduated over the past decade from being a tax adviser to being a major deal-maker.

He is understood to have moved from giving people advice about their finances to gathering together partnerships of high-income investors, who invested in car parks and hotels in order to benefit from tax breaks, and from there to investments that had gains from longer-term capital appreciation as their main motivation.

His most high-profile deal up to now was the Four Seasons Hotel in Ballsbridge, Dublin. It was built by a partnership that includes European Court judge Ms Fidelma Macken, former attorney general Mr Dermot Gleeson SC and property developer Mr Mark Kavanagh.

He put together a group of between eight and 10 businessmen who paid more than €31 million for 11.8 acres at The Grange, Dublin, in November, 2000.

He has also been involved in investments in hotels in Budapest and Prague.

The precise structure of the Savoy deal is not clear. Typically, ownership structures involving offshore locations such as Jersey are being used in investments such as the purchase of the Savoy group, according to a source familiar with such schemes.

Mr Quinlan was not available for comment and does not normally disclose any details concerning his deals.

The main attraction for investments such as the Savoy, for people with incomes at the higher end of the scale, is longer-term capital accumulation, according to the source.

Investors form a partnership and put up about 15 per cent of the cost of the investment, with the banks providing the balance. If that was the case with the Savoy purchase, which cost €1.13 billion, then the investors would have put up some €170 million.

According to the source, the business purchased would be in a position to pay for the cost of loan interest and other costs involved. An increase in the value of the asset of approximately 15 per cent per annum would be considered normal. In seven years, the value of the asset would increase by 100 per cent.

Many of the schemes are set up out of Jersey and no capital gains tax arises for any of the investors as long as they leave the capital gain or profit within the structure - i.e. as long as the gain is not distributed among the partners.

Gains realised could be used to buy fresh assets using the same structure. Capital appreciation continues and the investors do not pay any tax.

"It can carry on ad infinitum. You end up with a pile of dough. It's very tax efficient," the source said.

If members of the partnership want money from the scheme, they can borrow against it or realise a part of their holding.

A press release yesterday said Mr Quinlan's firm, Quinlan Private, was founded in 1989 and has "an established competence, as principal and adviser, in originating, structuring, financing, developing and managing a diversified portfolio of prime assets. These assets include commercial office blocks, shopping centres, car parks and hotels throughout Europe and North America. Its current property portfolio comprises approximately 140 assets."

Sources say that Mr Quinlan sometimes puts up some of his own money, sometimes gets a cut in return for putting a deal together and sometimes gets an ongoing fee from the arrangement.

Notes on the 2002 accounts of Park Rite Ltd, a company of which Mr Quinlan is a director, records that, during 2001, he was paid €1.3 million for "certain rights entitling the company to receipt of management fee income arising from existing agreements between certain car park partnerships and Mr Quinlan".

The notes show Mr Quinlan was paid professional fees of €33,098 in 2002 by the company. Quinlan Asset Management, an entity controlled by Mr Quinlan, was paid a further €219,608.