Phil Green ... debt is a many splendoured thing. Illustration: John Shakespeare
Former chief Babcock & Browner Phil Green and his old work buddy, Trevor Loewensohn, appear to be carrying on their love affair with debt in a new way.
Rather than following their old habit of filling up infrastructure assets with mountains of debt and then collecting fees, the two have been lured further into the home loan market.
Maybe they have been inspired by the attempts by the former Allco Finance bigwigs, John Kinghorn and David Coe, to resurrect the fly-blown home lender RHG Limited.
The unsubstantiated blab around Hunter Street is that Green, Loewensohn and Neil Sinden, the former Australian head of the lender GMAC (aka General Motors Acceptance Corporation), head a syndicate that has lobbed a bid for Pepper Homeloans.
A group led by Green has already snapped up a loan book offloaded by GMAC when it left Australia last year. Those loans used to be partly distributed by Pepper. Pepper's two key shareholders are Bank of America-Merrill Lynch and Italy's CIR. Each has a 47 per cent stake.
Among the other rumoured bidders for Pepper is a Pengana Capital team, headed by Simon Robinson and including some of his former work chums from the now defunct Seiza Capital. ''I'm not saying whether we are or whether we're not [bidding],'' Robinson told CBD.
Pepper manages a loan book of about $3.5 billion, which includes loans that used to be managed by mortgage lenders such as the collapsed Seiza, the Allco-owned Mobius and All Commercial Finance.
Pepper's chief executive, Patrick Tuttle, denied yesterday that the business was up for sale. ''At this stage there's been no public announcement about the sale of the business,'' Tuttle said. The corporate adviser Grant Samuel is believed to have already taken bids for Pepper. Another bid is believed to have come from Singapore's IFS Capital.
FROZEN FIRST
Investors who have had their $900 million of deposits frozen in the formerly City-Pacific-managed First Mortgage Fund must applaud the independent chairman of the investor committee for looking after their interests.
Ken Atchison assured CBD he would never seek to profit from the thousands of investors he is representing, despite recently founding a company that will facilitate the buying and selling of units in unlisted funds who have frozen redemptions to investors.
Atchison said his establishment of Transfer Asset Group Pty Ltd was ''totally unrelated'' to his role chairing the First Mortgage Fund's investor committee.
''It is totally and completed unrelated,'' Atchison assured CBD, amid signs the new manager of the fund, Balmain Trilogy, could soon write down the value of the $1 units to match the already written down asset value of the fund, which is now $520 million.
''We're a broker. Transfer Asset Group is a broker. We will act for buyers or sellers. I can assure you that at this stage we have had no connection with anyone potentially interested in buying into the First Mortgage Fund,'' said Atchison.
He conceded he was privy to inside information on the First Mortgage Fund, which held its latest committee meeting in Sydney last week. But he said he would not trade on this information.
When pressed on whether his company could facilitate purchases or sales in units in the fund, Atchison said: ''It's highly unlikely because of the conflict issue. Highly unlikely.''
He said his broking business would target the array of mortgage funds across the financial landscape that have been frozen, which include funds run by Colonial, Centro, Becton and AXA.
''We know there are billions of dollars caught up, so not being able to transact in City Pacific is not, from a business point of view, crucial.
''The work I am doing as chair of the investor committee is far more important than me setting up a broking business,'' he explained.
Atchison said a return of capital from the First Mortgage Fund was ''now likely in the foreseeable future''. ''It's not going to be brilliant,'' he added.
Also on the investor committee with Atchison are 10 unit holders handpicked by Balmain Trilogy.
FROZEN SECOND
Atchison's fellow directors on Transfer Asset Group include the former head of ABN Amro Asset Management, Paul Bray, (who is also a shareholder) and Andrew Smith from the Melbourne broker Intersuisse.
Aside from being a broker in frozen units, Atchison has been acting as an investment consultant to one potential buyer of this asset class.
The Andrew Patrick-headed Melbourne investment manager Key Capital is trying to raise funds for a new unlisted property securities fund. A recent Key Capital presentation said the fund would ''acquire units in frozen unlisted property funds at a discount to NTA [net tangible asset value] from unit holders seeking to exit''. Key Capital is expected to release a product disclosure statement within the week as part of its attempt to raise an initial $2 million. It hopes ultimately to raise $25 million within six months.
KICKING TYRES
Media analysts have Kerry Stokes to thank for their recent steep learning curve of the tractor, mining truck and bulldozing sector. Following the Stokes-chaired Seven Network's proposal to merge with the Stokes-owned Westrac Caterpillar dealing business, some analysts have been forced to kick a few tyres and get their hands dirty.
''We in the media and gaming team are not earthmoving analysts (!),'' professed the Macquarie media analyst Alex Pollak in his latest note.
GUINNESS GANG
The Qantas chief executive, Alan Joyce, has been recruited to a new Guinness-drinking posse just in time for next week's St Patrick Day festivities. Joyce offered some tips at last September's Irish Economic Summit in Dublin, and now he has been inducted into the 300-member Global Irish Network.
The members of the exclusive posse of Irish people includes the Boomtown Ratter Bob Geldof, the movie director Neil Jordan and the British Airways boss, Willie Walsh.
The Irish Department of Foreign Affairs also provided a progress report on the September summit, which sought to find ways to help the Emerald Isle remove itself from the so-called PIGS grouping of European countries that are economic basket cases. ''The document was considered by government at its meeting on February 23 and a decision was taken to publish it in advance of St Patrick's Day,'' a statement from the Irish government said.
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