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More than 400 investors lose out in First Equity collapse
Sunday, March 29, 2009 By Gavin Daly and Ian Kehoe
More than 400 Irish investors face losses running to tens of millions of euro after the collapse of First Equity Group, a Dublin investment firm.

The group, headed by businessmen Tom Dowling and Alan Barry, sourced and managed investments for high net worth individuals. It had backed projects worth more than €3 billion, including recent investments in developing high-end apartments in Beverly Hills and a €500 million ski resort in Suffolk.

First Equity has been in examinership since December, after admitting it was insolvent, and went into liquidation last Friday afternoon. The examiner, KPMG accountant Kieran Wallace, has been locked in negotiations with banks and creditors in an effort to refinance the firm, but a planned rescue package unravelled.

Bank of Scotland (Ireland) withdrew an offer of support, prompting the appointment of Wallace as liquidator. The move is set to trigger the appointment of receivers to various developments and assets within the group. The firm’s investors, who include Alan Barry’s brother, Jim Barry of NTR, are likely to bear much of the losses. In a letter to investors last Friday, Alan Barry, managing director of First Equity, said the firm had been trying to raise debt and equity funding. ‘‘It is with great regret that we inform you we have been unable to secure all the necessary funding,” he said.

Barry said the directors of the investment firm would cooperate with Wallace, and ‘‘contingent on his consent, will be available to advise investors of the impact of the development on their investments’’.

After investing heavily in buying sites and properties, First Equity was badly hit by the downturn in the property markets. Many of its projects stalled, as the global credit crunch meant it was unable to raise development finance.

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