INTERVIEW/Paul McGlade, ACAP Group:'I SUPPOSE I like doing the opposite of what's expected," says Paul McGlade jnr when asked why he's spent the past two years setting up a foreign property business at a time when pretty much everyone else has been running a mile from property.
Another reason is that McGlade (27) likes property and – even in the current global climate – appears to have an aptitude for it. He realised that when he worked for Ely Properties and pulled off his first significant deal in the UK in 2006.
“I found a student residence for them in a good location in the centre of Nottingham. We bought it and subsequently sold it on to a pension fund in a guaranteed-rental deal. I never really wanted to work for anyone else and that convinced me I should do my own thing.”
It is a trait that runs in the family. His father, also Paul, is the Belfast-born entrepreneur who set up Champion Sports in the 1990s, sold it in two multimillion euro deals a decade later, and now has a range of business interests from laser eye surgery to restaurants.
But McGlade jnr’s fledgling company, ACAP Group, is not simply a case of flying in the face of business logic – it’s an overseas mortgage provider, which he has carefully positioned to meet the needs of property owners in an economic downturn.
In the current climate, that means a good deal of ACAP’s business so far has involved arranging equity release from overseas properties bought by Irish investors during the boom.
“In Ireland at the moment everyone is worth a lot on paper, but nobody has much cash,” he says. “When I saw the way the market was going, I realised that a lot of the people who’d bought foreign property in recent years would be trying to sell – and that if they werent able to sell, they’d be looking for equity release. I saw that as a big opportunity.”
He was right: they’ve already facilitated around €30 million in loans for some 400 clients this year and expect the cumulative value of loans to have reached €200 million by year three.
“Some people want to generate cash from their overseas properties because having bought abroad before, they’re now seeing new opportunities and want to buy again when the market is low. Another scenario we’re seeing is that people bought overseas property using their home in Ireland as security, and now, with interest rates rising, they want to pay off their mortgage at home while still keeping their holiday home abroad. Equity release is the quick way to do that, freeing up to 80 per cent of the value of the property.”
Over the past 18 months, McGlade has travelled the world, forming partnerships with a total of 350 international banks, from Spain, Portugal, France and Germany to Dubai, Cape Verde, Britain and the Unites States.
The aim is to secure competitive interest rates, particularly in the euro zone, for Irish buyers who want to take out mortgages abroad with foreign banks, rather than at home.
“While I’ve been setting up this business, I’ve been very surprised by how unregulated the international property market actually is,” he observes. “For instance, because many Irish buyers bought overseas property by mortgaging their family homes, the property they bought was never actually valued – extraordinary though that seems.
“Another problem is that inexperienced investors bought properties in developments of, say, 100 apartments where as many as 80 per cent of the buyers were Irish. That means that the way things are at the moment, half those properties can be on the market at the same time which is essentially a firesale.”
Yet despite such stories, the Irish are apparently unstoppable. McGlade is just back from the US where he’s secured a 15 per cent discount for investors in a package of 20 apartment units at North Lakeshore Drive in Chicago, one of the city’s best addresses. “Nine of the 20 are already reserved,” he smiles. “We Irish really love a deal.”
Name:Paul McGlade jnr
Company: ACAP Group
Job:Founder and director
Age:27
Background:Studied business and accountancy. Joined Ely Properties in 2006. Set up ACAP Group in 2007.
He spent the past 18 months forming an association with 350 partner banks worldwide offering competitive mortgages. He has facilitated loans worth €30 million this year.
Inspired by:Warren Buffet because "he came from nothing to build an empire, but remains humble" and Sir Richard Branson.
Two things he's learned:"Focus on one thing at a time" and "don't trust everyone".
Challenges:Navigating the international property market during a global downturn and increasing the cumulative value of the loans arranged to €200 million by year three.
