The Irish News Susan Thompson
&amp;lt;img src=”http://www.irishnews.com/picturesarchive/irishnews/irishnews/2015/09/03/194301953-acb016d2-7df2-497c-8bf3-a76e1808c7d9.jpg” alt=”Part One: Meet the man who heads up Cerberus NI” title=”Part One: Meet the man who heads up Cerberus NI” class=”img-responsive” /&amp;gt;Coggle shaved off his signature moustache for Movember, when men often grow facial hair rather than shave for charity.
In April last year, Northern Ireland’s biggest ever property deal was secured when Cerberus bought from Nama the ‘Project Eagle’ loan book concerning 850 properties for a knockdown £1.3bn. It is a deal that has been shrouded in controversy. In the first of a two-part series, Susan Thompson takes a look at Northern Ireland’s billion pound debt collectors.
Ranald O Coggle regularly reduces grown men to quivering messes. It is his job.
The Englishman is not in Belfast to make friends. He is Northern Ireland’s most powerful debt collector.
Coggle, known as Ron, is a managing director of Cerberus European Servicing Ltd, a debt servicing arm that the US investment company established to operate the loan book it bought from Nama. He secures the repayment of the distressed loans bought by the US investment fund.
A big man, Coggle tells debtors exactly what the future will look like if they don’t give Cerberus its money back, with interest on top.
He then goes outside for a smoke.
In a BBC Panorama documentary, Ross Finch, a hotelier from Cheshire who found himself in dispute with Cerberus after Lloyds Banking Group sold his loan, described how Coggle told him: “What you have to understand about me is I’m a prick”.
Coggle is well qualified to play ‘bad cop’. He is a former investigator in Scotland Yard’s Fraud Squad and he spent eight years in Germany recouping bad debts for another US investment firm.
His Belfast-based colleague Brian Berg, who is described as a “tough enough” negotiator in his own right, gets as much stick from Coggle as the borrowers, observed one businessman who found himself on the other side of the negotiating table to Cerberus.
He said: “All these property developers had built up businesses, had seen a lot, many through the Troubles. We’re talking hardened men. Ron Coggle managed to spook these guys… He has techniques to break the resolve of developers – laying out exactly and painfully what could happen if no deal was struck.
“It’s like pantomime theatre and boy is it effective,” he added.
On Christmas Eve the directors of more than one indebted company within the Project Eagle portfolio received a letter demanding payment of millions of pounds within 14 days or face the consequences. It certainly took the shine off Christmas Day.
One debtor described how a Cerberus employee would preamble discussions with ‘”I don’t want to come over threatening” and then describe how the borrower might have to consider selling his house in order to meet payments.
Nevertheless this borrower said that ultimately Cerberus ended up being more pragmatic to work with than one Irish bank he had a loan with.
Who are Cerberus in Belfast?
Mr Coggle doesn’t volunteer much personal information. The only picture The Irish News could source of him was from November last year. Coggle shaved off his signature moustache for Movember, when men often grow facial hair rather than shave for charity. He raised £566 as part of a £19,000 Cerberus team effort.
Cerberus itself is a notoriously secretive company.
Its Belfast workforce has a minimum of six employees, made up mostly of ex-bankers and property professionals. It outsources a lot of work to Capita, its loan administrators.
The average salary in 2014 for an employee of Cerberus European Servicing, which is listed in the Cerberus website as its entity operating in Belfast, was £409,000 before bonus.
Its annual report for the year ended December 31 2014 states that four directors, one of whom is Coggle, earned £2.9m between them.
The highest paid director received a £1.5m salary. The wage bill is in excess of £7.3 million as Cerberus European Servicing also has staff outside Northern Ireland.
While staff are paid by Cerberus European Servicing, it acquired the Project Eagle portfolio from Nama in a ‘special purpose vehicle’ called Promontoria Eagle Limited (PEL) which is registered in Dublin.
PEL was formed on April 17 2014 and therefore has not been obliged yet to file updated accounts.
To give an example of the type of company structure Cerberus might have used when forming PEL it is worth looking at a ‘special purpose vehicle’ it formed to acquire an initial 28 loans from Lloyds Banking Group.
Promontoria (Thames) Limited is registered in Dublin. The 2014 statements show it had no employees, its directors were not paid and it paid tax of £1,855 in Ireland.
‘Excellent news’ for Northern Ireland
The Cerberus deal was a ‘win, win’ according to the rhetoric from governments north and the south.
Nama had offloaded a political hot potato and it seemed as though there was hope that property developers could get back on the front foot. It was an “excellent” deal, the First Minister argued, and it would facilitate economic growth.
There is no doubt that Nama had been a bureaucratic and painfully slow beast to deal with for many Northern Ireland borrowers. It was, after all, a government body and had much bigger debts to tackle in the Republic.
A portfolio with a face value of £4.5bn was, in a way, small beer for Nama which owned loans with a face value of over €70 billion.
But Nama was operating during the depths of the credit crunch and the recession. Cerberus had the advantage of entering the market when a level of liquidity had returned.
One businessman noted: “Nama were very much about cash management. Sweeping cash out of the balance sheet and destroying not preserving value. A recipe for disaster.”
Cerberus, he said, operated much the same way.
“[It is] all about recouping debts, not investing. The big difference is Cerberus is much quicker to negotiate on pay back terms. Nama didn’t have the same luxury [being state-owned],” he said.
In Belfast, Cerberus set up shop in the serviced offices of the Scottish Provident building on Donegall Square, and has since moved to Harvester House on Adelaide Street.
When it bought the portfolio, Cerberus stressed that it was “a patient, long-term investor”.
Yet in just over a year – by the end of May 2015 – it had already worked through 87 per cent of the portfolio.
Cerberus said 13 per cent of loans had been subjected to enforcement proceedings, of which 7 per cent were started by Nama and resolved by Cerberus.
One developer, whose loans are no longer with Cerberus, said: “It’s not about building anything of substance. Why did Nama not just do the same thing – demand the money back plus 20 per cent? That way at least the Irish taxpayer would have benefited.”
It begs the question, was Cerberus a better alternative to Nama? Perhaps. Was it the best option for Northern Ireland’s property developers? Perhaps not.