Sunday, 26 November 2017

Knowle relocation project: of Paradise Papers and specialising in vulture funds

To pick up on a blog entry from a couple of months ago
(and note how the information quoted here is no longer available on the website referred to...):

> PegasusLife was founded in 2012 as a subsidiary of Oaktree Capital Management - $101bn company high-yielding (19%) from senior debts and distressed debts.
Company Information - PegasusLife

> CEO Howard Phillips was previously reprimanded for persuading retired people to trade in the equity in their home for the lease of a retirement flat.
PegasusLife shakes up over 55s property market
The business of ageing: high-end housing for the elderly
Flying high: Howard Phillips interview | Analysis - print | Property Week
Builder's boss Howard Phillips quits three years after £900m debt-swap deal | The Independent


Futures Forum: Knowle relocation project: PegasusLife appeal >>> deadline today for submissions >>> the issues

Here is yesterday's blog entry from the East Devon Watch blog:

CASINO CAPITALISM COMES TO SIDMOUTH?

25 NOV 2017

The recently-leaked ‘Paradise Papers’ on tax havens seem to have revealed an interesting side to the activities of the billion-dollar US equity giant behind Pegasus Life the developer currently appealing EDDC’s refusal to give it planning permission to build 113 luxury flats for old people at Knowle in Sidmouth.

As the Pegasus Life website proudly proclaims, Oaktree Capital Management founded the company in 2012:
https://www.pegasuslife.co.uk/?gclid=EAIaIQobChMIrLb85_bZ1wIVz7vtCh0bLAZkEAAYASAAEgKf3fD_BwE

The Paradise Papers suggest that, at about the same time, Oaktree was setting up a joint venture with Australian and Chinese billionaires to fund a 3.2 billion dollar casino in Macau through the offices of legal firm Appleby in the the British Virgin Islands tax haven:
http://www.abc.net.au/news/2017-11-10/paradise-papers-melco-crown-investment-money-laundering/9137232

Appleby became alarmed about the refusal of Oaktree and its partners to allow identity checks on its shareholders – the cornerstone of global efforts to stop money laundering and the financing of terrorism.

Oaktree and the others allegedly threatened to take their business elsewhere if Appleby insisted on the checks. Appleby didn’t, and the joint venture was duly incorporated in the British Virgin Isles with the shareholders remaining secret! The Casino opened in 2015.

All this is literally thousands of miles from the fond hope expressed by Philip Hammond in this week’s budget speech that local homes should be provided by small local companies with a real stake in their community.

Howard Phillips, current CEO of PegasusLife, was, until 31/08/2012, CEO of McCarthy & Stone. He led the restructuring of McCarthy & Stone’s £900M debt and under his watch the company is alleged to have engaged in the dubious practices exposed by Ch 4 Dispatches that year.

On 24 September 2012 a Channel 4 Dispatches programme on retirement leasehold was a brilliant example of television journalism that was extremely damaging to both McCarthy and Stone, and to Peverel, including their effect on this site:
https://www.betterretirementhousing.com/channel-four-dispatches-exposes-retirement-leasehold/


Casino Capitalism comes to Sidmouth? | East Devon Watch

Wikipedia gives us an overview of the parent company:

Oaktree Capital Management is an American global asset management firm specializing in alternative investment strategies. It is the largest distressed investor in the world, and one of the largest credit investors in the world.

Oaktree Capital Management - Wikipedia

And a definition of what 'distressed investors' do:

Firms that specialize in investing in distressed debt are often referred to as vulture funds.[10][11][12][13]

Distressed securities - Wikipedia

And a definition of 'vulture funds':

A vulture fund is a hedge fund or private equity fund that invests in debt considered to be very weak or in default, known as distressed securities.[1] Investors in the fund profit by buying debt at a discounted price on a secondary market and then using numerous methods to gain a larger amount than the purchasing price. Debtors include companies, countries, and individuals.

Vulture fund - Wikipedia

Meanwhile, Oaktree's affiliates in Ireland are getting very involved in the housing market:
‘Aggressive’ vulture funds swoop in on Irish property - Financial Times
Woman served with 'vulture fund' eviction notice vows to fight for her home | Irish Examiner
A vulture fund is backing a big new Irish housebuilder - here's what we know so far
Eyeing the prize | Ireland | The Times & The Sunday Times

And as the EDW post mentions, Oaktree have invested in a joint venture - which has featured in the Paradise Papers:
Paradise Papers: Secrecy over investors in Packer's Macau foray raises potential 'red flag' on money laundering - ABC News (Australian Broadcasting Corporation)

Oaktree have quite a portfolio:
European Portfolio Companies - Oaktree Capital

And PegasusLife is one of these companies on its books:

The company was founded by Oaktree Capital Management, a substantial American private equity house


Company Information - PegasusLife

See also:
Futures Forum: Knowle Relocation Project: PegausLife's 113 apartment development at Tetbury: "our largest development to date" >>> "low-rise apartment blocks surrounded by green space ... designed to blend easily with the local landscape"
Futures Forum: Knowle relocation project: Pegasus as preferred bidder... However, its proposals for ‘one of the finest coastal properties’ in South Devon have been rejected by Dawlish Town Council 'on the grounds of overdevelopment'.
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