A Commission of Investigation into the National Asset Management Agency’s (NAMA) 2014 sale of Northern Ireland assets found the sales strategy “appropriate in the circumstances” but raised concerns over conflict-of-interest management.
The investigation focused on the £1.3 billion sale of Project Eagle, a portfolio of loans, to US firm Cerberus and examined the role of businessman Frank Cushnahan, a former member of NAMA’s Northern Ireland advisory committee.
The report highlighted that Cushnahan’s disclosure of potential conflicts of interest was “not appropriate in the circumstances.” Notably, US investment group Pimco, a bidder for Project Eagle, revealed plans to pay Cushnahan a success fee. Pimco withdrew from the bidding after learning NAMA was unaware of the arrangement. The commission found NAMA should have sought more information from Cushnahan regarding his disclosures, stating that the absence of clarity left the agency with “insufficient information” to manage potential conflicts.
Additionally, the commission deemed Cushnahan’s participation in a June 2012 meeting inappropriate, stating NAMA should have investigated his prior disclosures at that time. While NAMA correctly rejected any fee payments to Cushnahan, the report noted that then-chairman Frank Daly should have informed the NAMA board of Cushnahan’s disclosures before considering his reappointment. However, it acknowledged that excluding Cushnahan could have been politically sensitive, potentially harming North-South relations.
Despite these criticisms, the commission concluded that the issues identified did not affect the final sale price of £1.322 billion. However, it found that an £85 million adjustment related to certain properties “was not appropriate.” It also noted that a valuation used by NAMA CEO Brendan McDonagh was a “reasonable estimate” despite lacking mathematical precision.
Further criticisms included the failure to formally record the board’s decision on the minimum sale price and setting that price below the portfolio’s book value without adequate documentation. The commission also highlighted record-keeping shortcomings regarding the decision to require a cash purchase.
The investigation acknowledged that NAMA’s initially restricted sales timeframe, advised by financial consultant Lazard, contributed to some bidders opting out of the process.
In response, NAMA stated that it “welcomed” the report’s publication, emphasizing its confirmation that the best achievable price was secured and that the sales process was “managed appropriately.”
