Chief executive Olan Cremin is leading the firm's rapid expansion, writes Una McCaffrey
If you're free some Monday afternoon and looking for a few investment tips, you might try squeezing your ear to the window of Quinlan Private's offices in Dublin 4.
In an ideal world, you would be able to listen in to one of the company's weekly investment meetings, where potential transactions are considered by a committee of experts. Then, if you have a hundred million or so knocking around, you could try beating the Quinlan boys to the deal. Your chances will be slim, but God loves a trier.
These days, much of what will be discussed will have a focus on central Europe, as Quinlan is a big fan of pre- and post-accession EU states. There will also be some talk of the Republic, some of the US and some of the UK.
Olan Cremin, the company's chief executive since last September, will be leading the charge, particularly when it comes to bringing new clients to the company. He is the man charged with making a success of the firm's expansion into London and New York, and the one with whom the buck will stop if it all goes wrong.
Cremin came to Quinlan with sound credentials, having previously headed IIB's private banking operation in the Republic. A trained accountant, he has also worked with KPMG and ICC (now Bank of Scotland Ireland).
He says growing is "the natural thing to do" for the company, which has made its name since being founded by former tax inspector Derek Quinlan at the end of the 1980s with deals such as the €1.3 billion purchase of London's Savoy Hotel Group and the subsequent sale of one of the hotel properties for £237 million (€341 million).
The firm now has four people in its New York office and is recruiting private-banking specialists to add the necessary bulk. The same is happening in the UK, where Quinlan has three people in London.
Deals such as the Savoy mean the business already has good brand recognition in the UK and, to an extent, in the US. Recruiting new clients in these markets will be a big focus over the medium term, with a combination of networking and simple research in "who's who?" publications the first step.
The idea in the US is that Quinlan will sell European property investments to Americans, who might not generally be presented with such opportunities. The firm does not want to manage all of a given client's wealth in these new markets but will instead offer "co-investment" opportunities. This means investing directly in European property rather than by proxy through funds or trusts, as might be the case at the moment.
There will be a subtle Irish-American bent in the firm's pitch, but this won't be overt, Cremin says. The company offers, for example, financial support to the US-Ireland Alliance, which operates the Mitchell Scholarship programme for American students. The sponsorship lasts for three years, by which time Quinlan's US name should be made.
Helping this along will be Derek Quinlan's personal purchase at the end of last year of a €22 million townhouse in one of Manhattan's most exclusive neighbourhoods. The property ranked as New York's second most expensive townhouse sale last year and has presumably brought Quinlan Private significant kudos among the wealthy city slickers he wants to lure as investors. The house is on the same street as the company's New York office, also bought last year.
Quinlan the company has also made more chunky US investments, paying $100 million (€81 million) for a Chicago office block in 2005.
Cremin estimates that Quinlan's overall pipeline of "work in progress" is currently worth more than €1 billion. The sum is significant, given the firm's existing asset base of about €5 billion.
Cremin warns that not all projects in the pipeline will come to fruition, but he is particularly optimistic about what he calls "old Europe". For Quinlan this really means central Europe, although the firm has made a few "niche" investments in Germany.
He acknowledges that a "wall of money" is descending on countries such as Hungary, Romania Poland and Bulgaria at the moment, but he says Quinlan's eight-year experience in the area makes a key difference.
Another difference lies in the nature of the investment, with a typical Quinlan residential project seeing the development of units for sale to locals in the country rather than to foreigners. The basic premise is that poorly-built communist housing stock needs to be replaced for occupation by people who are getting richer all the time.
This type of investment tends to form part of a fund, with the last such structure raking in a cool €50 million, of which the company itself stumped up 10 per cent.
So what about investments in other parts of the world? Cremin says the firm is not overly compelled by Asia, although it is looking at something in China. India isn't yet on the radar screen.
"We like Ireland and are quite active here," says Cremin. The firm is also "opportunistically" active in the UK, having proven its talents there with the Savoy transactions and, subsequently, the purchase of a block in London's Knightsbridge for more than £530 million. Underbidders included the Abu Dhabi royal family.
Cremin explains that Knightsbridge is an ongoing project for the company, with current plans thought to envisage a substantial increase in the site's square footage. While no details have been submitted to London's planners to date, Quinlan is thought to be looking at opening up the middle of the block by redeveloping an alley as a new pedestrianised street. This would involve the departure of a number of existing tenants, including a fire station. The existing buildings would also rise in height.
If the planners pass the project, it would take about four years to develop, cost hundreds of millions and would be self-financing.
The firm is also hoping to double the size of the Clarence Hotel, which became part of the group's Maybourne Hotel after Quinlan took a stake in it last year. Again, plans have not yet been submitted to the relevant authorities.
In the Republic, the firm's biggest investment of late came at the start of the year, with the €100 million purchase of KBC's Irish property portfolio. The group of six properties has an annual rent roll of €4.4 million.
"The Irish market is still untapped," says Cremin. He reckons the Republic will still be central to the firm's success for many years to come, despite the scale on offer in the UK and the US.
At the moment, Quinlan Private is still actively recruiting clients at home, most of whom come in through referrals. The firm has two types of customers: full-service clients who engage Quinlan to do everything down to their tax returns and clients who come in only as investors.
On both counts, clients come from diverse backgrounds and include high-earning professionals, business owners or people who have made money through selling businesses. Investors in the past are said to have included Kyran McLaughlin of Davy Stockbrokers and Riverdance millionaires Moya Doherty and John McColgan.
The firm doesn't have many property developers on its books, although most of its clients have made their own money rather than inheriting it.
Their focus is thus still on wealth creation rather than on strict wealth preservation. This is perhaps the key difference between what Quinlan does in the Republic and what it hopes to do in the older-money sections of the US and the UK, the two markets where Cremin is overseeing the expansion.
Quinlan's selling point has long been that its partners will usually invest in the projects it markets to other people, and this is set to continue. Typically, about 75 per cent of a given project is financed through debt, although this can sometimes go up to 80 per cent or down to 50 per cent.
In the past the firm has often regeared a project after a couple of years so that equity holders can get a return. This was under Quinlan's traditional model of buying and holding for the long term. More recently, however, things have changed, with the firm's model now concentrated more on buying and selling. Investments often now come with a development angle and a four- or five-year timeframe. The recent sale of the Four Seasons in Milan for a profit of some €43 million was a two-year flip.
Cremin is cagey on what might be coming next on the large deal front, but the firm's appetite for central Europe is unlikely to be satisfied any time soon. And just as the deals will keep coming, history suggests a steady stream of investors with deep pockets will continue to look for such opportunities.
