By Contributing Author
Israel-based Meitav Dash will enter the Irish property market by investing in a controlling stake in David Grin’s Lotus Investment Group.
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Through its €5.4 million investment, the Tel Aviv Stock Exchange-listed Meitav Dash will secure a 45% controlling stake in David Grin’s Dublin-based Lotus Investment Group. Meitav Dash’s two other Israeli partners will put up additional funds to acquire a 40% stake in Lotus Group. The remaining 15% stake in the company will be retained by the founder and chairman Grin, Lotus’s managing director Ian Lawlor and other Lotus executives, including Irish investors Aidan Tuite and Shane Travers. The total investment transaction is estimated at €16 million, which leaves the Lotus Investment Group valued at nearly €20 million.
The value and volume of Lotus Group’s investments are likely to see a significant increase with this arrangement. Meitav Dash, under the direction of chief executive Ilan Raviv, currently manages €35 billion in assets. The firm has already announced its intentions to infuse €8.16 million into Lotus’s investment portfolio to ensure that the property financers’ lending activities continue to expand.
Under the deal, David Grin will remain chairman of the firm and Lawlor will continue directing Lotus’s investment activity. Grin and Lawlor will each receive an earnout of €7.2 million and are entitled to future payment of €4.2 million if the conditional terms of the agreement are met.
In 2013, the Group identified an investment niche in the stressed Irish property market which was facing an imbalance between supply and demand due to several factors including a shortage of traditional bank lender credit available to builders during the recovery period following the global housing and economic crisis.
Lotus Investment Group entered the Irish market as a private equity property financer offering non-traditional property financing to property developers and investors primarily involved in the delivery of new homes into the market. David Grin’s firm has since funded over 250 loans valued at €364 million. Through their investments, Lotus has contributed to the completion of nearly 3,000 homes built across Ireland. The lender has specialized in providing construction financing for a typical period of 12-24 months.
In the six years that Lotus Investment Group has managed SME portfolios (Small & Medium Enterprises) for entrepreneurs and real estate investors, the firm has experienced a quick ascent to the top of the Irish property investment sector, becoming one the most prolific investment firms in the new home construction market in the Dublin area. Lotus Investment Group under the command of managing director Ian Lawlor currently manages investors with €115 million backed loan portfolios.
As a private equity investment house, Lotus Investment Group has maintained the flexibility required to meet the unique needs of every client. This dedication and commitment to their clients have resulted in a repeat customer base for the firm. The deal between Lotus Investment Group and Meitav Dash seeks to maintain the numerous successful partnerships Lotus has established with Irish investors and contractors.
Commenting on the acquisition to the Irish Times, Lotus Investment Group chairman David Grin stated, “This deal is a recognition of the success of Lotus in Ireland. The developers that we have worked with have delivered over 2,000 homes to date. These same developers would have struggled to secure the necessary funds from the main banks.
“We expect that the entry of Meitav Dash Investments to the market will substantially increase the funds available through Lotus, which will, in turn, increase the supply of new homes. Given the lack of suitable and affordable properties on the market, this will be welcome news for first-time buyers and those looking to trade up.”
Lotus-Meitav Dash deal to positively impact the Irish market
Meitav Dash Investments, the second-largest investment house in Israel, manages funds for private, businesses, and institutional clients. BRM Group and Zvi Stepak own a majority stake in the firm whose assets include mutual and provident funds, pension funds, portfolio management, and investment banking. The investment house has seen a 40% increase in the trading value of its stock since the beginning of the year.
Their entry into the Irish real estate investment market represents an expansion into alternative investment arenas for Meitav Dash and continued development in the company’s credit sector. The investment firm has stated that it has undertaken an investment totaling 16.8 million on behalf of itself or on behalf of third-party investors as a way to provide further credit to Lotus’s customers.
Ilan Raviv stated in a public statement released by Meitav Dash, “Having carried out considerable research into the new homes market in Ireland, we are confident that demand will continue to outstrip supply in certain locations for some time. A key impediment to supply is the ongoing lack of bank credit, particularly for small to medium-sized developers which make up the majority of house builders in Ireland. We see excellent potential to lend to developer sites that have the capacity to be built out in the short to medium term and that can go some way to satisfying the current undersupply.”
The partnership between these two nationally leading investment firms will no doubt have a positive impact on the Irish housing market, improving the supply of homes throughout the country and making homeownership more affordable for more people.
