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Designing the next crash? Hedge-funds to offer "Telecom-infrastructure backed" financial products
Ireland Created: 24 Jun 2013
Windfall due for mast landowners - Landowners with mobile phones masts could be in line for a major cash windfall as an American fund seeks to buy mobile phone leases.

An American hedge fund has set aside €20m to snap up the leases on mobile phone masts across Ireland in order to establish a new investment product backed by telecommunications infrastructure.

The acquisition of the leases will be handled by a Galway-based partnership of Tiger International and Black Dot Capital & Real Estate Group, operation under the name Black Dot Tiger.

The partnership is offering to buy the income rights of the mobile phone masts from landowners for a minimum of six times that annual yield that land owners currently receive.

Tiger International’s managing director Chris McGrath said that the deal will allow landowners to receive an immediate upfront payment.

“The beauty of this model is that the landowner retains the property and realises an upfront income stream straight away. Landlords or landowners can now convert their lease income asset from the mobile telco companies into cash through our new and unique lease purchase programme which is the first of its kind in Ireland,” he said.

There are an estimated 6,000 mobile mast and antennae sites in Ireland with about 3,000 of them situated on private property.

The owners of the land currently receive between €5,000 and €10,000 a year from the mobile phone companies depending on how populated the region is.

Black Dot Tiger will start approaching the 3,000 private landowners and offering to purchase these leases at a premium rate, copying a business model that they have already used in Peru and the US.

Black Dot Capital & Real Estate Group chairman Marc Anthony said: “In the US we have helped thousands of landowner’s release the value of their telecom leases, so we know this model works.”

Due to consolidation of various telecoms companies operating in Ireland the number of masts will decrease in the coming years as mobile phone operators sign agreements to share sites. Already 3 and Vodafone have signed an agreement to share their infrastructure, while O2 and Eircom have signed a similar agreement to form a mobile network sharing arrangement.

Black Dot Tiger say that by purchasing the income rights from landowners they are removing any risk of contract termination for the landowner and turning an illiquid asset into cash.

Once acquired the fund will then pool the newly purchased income rights into a single fund thus opening up a new asset class to investors.
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Source: Irish Examiner, Vincent Ryan, 24 Jun 2013

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