Hasenstab’s firm ups stake in Irish property venture

The Government’s biggest US financial backer Franklin Templeton has lifted its stake in Green Property’s new Irish property venture by 65pc.

Franklin Templeton Institutional LLC bought 7.2 million shares in Green REIT plc on August 1, lifting its stake in the Dublin-listed property fund by almost two-thirds, according to documents filed with the Irish Stock Exchange.

The move takes the California investor’s stake in property investment fund to 5.5pc.

The Green REIT plc put together by Stephen Vernon’s Green Property to invest in Irish property, launched on the Dublin and London stock exchanges on July 18. The listing raised €300m on the markets, almost a third more than anticipated, plus €10m from management.

Shares that were initially placed at 100 cent each were trading at 117 cent yesterday.

Based on the latest closing price, Green REIT has a market capitalisation of €356.5m, valuing the Franklin Templeton stake at just under €20m.

Those numbers are modest compared to Franklin Templeton’s other Irish interests but the stake-raising less than a month after the Green REIT was launched will be seen as a vote of confidence in both the property sector here and the new tax-efficient real estate investment trust (REIT) structure.

The Green fund has attracted more than its share of high profile backers, including Paulson & Co and BlackRock.

The Green REIT is the first of its kind in this country. Finance Minister Michael Noonan introduced legislation allowing for the creation of the tax efficient property investment structure in a bid to bolster demand for depressed assets.

Unlike most REITs, the Green deal raised cash to buy property, rather than putting together a portfolio of assets and then raising cash.

NAMA is anticipated to follow Green in putting together its own REITs over the coming year by hiving assets into stock market-listed vehicles open to outside investors.

California-based mutual fund Franklin Templeton first hit the headlines here last year after one of its top money managers, Michael Hasenstab, was revealed to have become the biggest single investor in Irish government debt.

Starting in mid-2011, the so-called contrarian investor had bought more than €8bn of Irish government IOUs on the international money markets at a time when few others would touch the bonds.

He made the trade because he was convinced the Government would never default on its debts. By some estimates the gamble repeated a stunning €1.9bn for US savers that invest in Franklin Templeton’s funds. Source: Irish Independent