So-called vulture funds have made over €10m from farm loans since they were snapped up as part of a sale by Rabobank last year.

As first reported by this newspaper, some 1,800 loans with agricultural connections were sold by Rabobank to Goldman Sachs and distressed debt firms CarVal Investors and Cabot Financial Services.

The loans were understood to have involved farms or farmland, which are an attractive inclusion in loan sales as the market value of farmland provides a guaranteed asset.

The loans were originally held by the Agricultural Credit Corporation (ACC), which was set up in 1927 by the Irish Free State with the purpose of supporting farm investment.

It was then taken over by Dutch-based Rabobank, which sold the loans in April 2019. Although the loan book was valued at €3.2bn in 2016, it sold for just €800m to Goldman Sachs and CarVal on 12 April.

Concerns remain over how vulture funds deal with farmers

Between August 23, 2019 up to the end of its financial year on November 30, Otterham Property Finance DAV, the Irish subsidiary of CarVal, collected a total of €11m from farmers, €4.4m of this in interest.

A letter to one farmer, seen by the Irish Farmers Journal at the time of the sale in 2019, informed him that his farm loan, including all rights and obligations under the loan, would be transferred to Pepper Finance Ireland.

Pepper had been used previously by vulture funds to service loans and act as an intermediary between them and individuals repaying loans.

Speaking to this newspaper this week, the farmer said he’d found them very easy to deal with and had not had any issues since Pepper had taken over management of the loan.

However, concerns remain over how vulture funds deal with farmers. A Wexford farmer recently won a land mark case in the High Court where a fund was ordered to accept his personal insolvency arrangement.