“Ireland is a small open economy. We are just going to have to access capital internationally – we don’t have the means to generate sufficient capital.”
For 21 years Pat Farrell has, in one way or another, been involved in transferring money from foreign investors to property developers. When Farrell was head of the Irish Banking Federation from 2000 to 2008, Irish banks basically acted as a middleman between European savers and Irish property projects.
After that model blew up, the banks got out of property lending. But property deals still need funding, so a new model emerged: direct funding of deals by investors. And because the people of Ireland don’t have that kind of capital lying around, the investors have come mainly from overseas. Farrell’s new job is as CEO of Irish Institutional Property, an industry group. He represents German, Dutch, British and American investors who are looking to buy and build in Ireland.
On this podcast he makes the case that direct funding is safer, explains why the private sector has been unable to deliver affordable homes, and looks back on his time in banking.
