(Bloomberg) -- Peter McGarry has made tens of millions of dollars betting on how the bond markets would react to one geopolitical event after another. Now he’s being swept up in one: the anti-migrant sentiment roiling Europe.
A senior portfolio manager at Garda Capital Partners in Switzerland, McGarry, 48, is one of the $11-billion hedge fund’s top money makers. Meantime, he has also helped to build a business in his native Ireland that houses asylum seekers on behalf of the government.
It’s been a well-timed investment. As Ireland struggles with an unprecedented surge in the number of people seeking refuge, the government has turned to an increasing number of private companies to house them in hotels, guesthouses and other kinds of accommodation. Townbe Unlimited Co., which McGarry owns with a group of investors, has received €28 million ($31 million) in contracts since last year, according to public data.
Ireland’s reliance on for-profit accommodation providers like Townbe has become contentious: migration rose to the top of the list of voters’ concerns ahead of a general election that must be called by March. Opposition parties have accused private firms of profiteering and ignoring locals’ concerns about the pressure more people could place on public services like schools and hospitals.
Even though it’s not the biggest accommodation provider, Townbe has become a lightning rod for anti-migration activists, and McGarry — as a hedge fund manager living overseas — has found himself the subject of vilification on X. In July, violence erupted in Coolock, a suburb north of Dublin. There, Townbe plans to house migrants in modular units in a former paint warehouse. Protesters faced off against dozens of police officers, hurling missiles and setting vehicles alight in one of the most violent protests the country has seen over the issue. Police ultimately made more than a dozen arrests.
“They don’t care who goes into the community — they don’t care,” Gavin Pepper, a member of Dublin’s local council and anti-immigration campaigner who has called for mass deportations, said in an interview outside the Coolock site, the wreckage of a burned-out digger behind him. “They only care about the check that they’re getting at the end of the month.”
McGarry declined to comment for this story. Paul Collins, one of McGarry’s partners in the Townbe business, told a documentary that aired on state broadcaster RTE last month that he has left Ireland for his safety. He declined to comment. A spokesperson for Wayzata, Minnesota-based Garda also didn’t comment. The fund has no involvement with Townbe.
At the turn of the century, the Irish government adopted a policy of paying companies like Townbe to house migrants through a network of privately-run centers. This arrangement hit capacity in 2018. Ever since then, the government has decided to house the extra numbers in short-term "emergency" accommodation provided by private firms such as privately-owned hotels, guest houses and purpose-built modular accommodation.
Multiple government-backed inquiries — as well as both local and international human-rights groups — have criticized conditions within the Irish system and described it as too reliant on private operators. In 2020, the current government pledged to abolish that system in favor of one that relies more on not-for-profit providers that would see asylum seekers live in a combination of social housing and other kinds of purpose-built properties.
That plan was upended by an influx of Ukrainian refugees, along with greater numbers of people arriving from countries including Jordan, Nigeria and Pakistan. A record 75% of the 32,000 asylum seekers in Ireland are now in “emergency” housing compared with 56% at the start of 2023, according to public data.
This has been lucrative for some, with scores of private firms receiving more than €2 billion in state contracts since last year. Townbe, which operates both emergency accommodation and centers that provide longer-term housing, ranks among the top players, the data show. Cape Wrath Hotel Unlimited Co., a company tied to Dublin-based property firm Tetrarch Capital, and Brimwood Unlimited Co., linked to the family of Irish businessman Seamus McEnaney, are the two biggest, according to the data.
The money on offer is sparking interest. Sellers of vacant properties across Ireland are increasingly hearing from bidders who want to turn buildings into refugee accommodation, according to people involved in such deals who requested anonymity as details aren’t public. In a December presentation aimed at the “savvy investor” who might want to buy an Irish hotel, global law firm DLA Piper cited asylum seekers as a reason for the sector’s “continued high demand and strong performance.”
This has stirred resentment across the Irish political spectrum. Anti-immigration activists have seized on it in their campaigning, portraying the companies as uncaring entities that impose unwanted asylum seekers on communities that are already stretched for resources. Several — including Pepper — gained seats in local elections in June.
“One of the biggest issues now is moving hundreds of people into a small town without increasing the number of service providers like doctors," said Bulelani Mfaco, spokesperson for the Movement of Asylum Seekers in Ireland. “This has made it easy for anti-migrant organizers to exploit these genuine concerns.”
Few might have expected McGarry to find himself here. He left Ireland in the 1990s and worked as a trader for Bank of America Corp., Danske Bank A/S, BNP Paribas SA and Bluecrest Capital before joining Garda around 2016. Meanwhile, he quietly built a mini empire of personal investments in Ireland.
In 2012, just two years after a real estate crash forced Ireland to accept an international bailout, McGarry was among a group of investors who founded Remcoll Ltd., a real-estate investment firm. They amassed dozens of distressed properties across the country's smaller towns, from unfinished 'ghost' estates to an 18-hole golf course designed by Seve Ballesteros and a former convent, according to the company’s website. In 2018, this same group began seeking contracts to house migrants through another company: Townbe.
Today, McGarry helps to control 40% of Townbe, company filings show. The firm isn’t required to disclose its profits under Irish company law.
At the Townbe site in July, the protestors knew all about McGarry.
“He doesn’t care,” said Kevin Coyle, another protestor who narrowly missed out on election to the local council in June. “If he cared about people,” he added, “he wouldn’t be trying to force migrants in here.”
Both Coyle and Pepper are running in the general election. Coyle has called for a 12-month ban on all migration into Ireland. He is part of a collective called the National Alliance that summarizes its approach to immigration as “Ireland belongs to the Irish.”
Multiple former colleagues described McGarry as an intense character with a sense of social purpose. He ran the North Pole Marathon in 2006 to raise money for cancer research, navigating a route across ocean ice and snow in temperatures as low as minus 40 degrees Celsius. He grew his hair for almost a year and didn’t shave for months before the race in order to obtain “that Arctic explorer look,” he said in a Bloomberg interview at the time. McGarry later started The Earth Foundation, a charity focused on addressing the climate crisis.
Trading on geopolitics is nothing new for McGarry. During his stints at Copenhagen-based Danske Bank and Paris-based BNP Paribas, he became a prominent player in the market for interest-rate swaps, derivatives that investors use to speculate on swings in interest rates. This discipline involves close study of government and central-bank policies.
Not all of McGarry’s trades were successful. He left BlueCrest Capital, then one of the world’s biggest hedge funds, in early 2015 after the firm suffered losses on wrong-way bets linked to the Swiss franc, Bloomberg reported at the time.
Garda hired McGarry soon after. The firm, named after the largest lake in Italy, seeks out profit from “divergent interest-rate policies” among central banks and “supply and demand imbalances in government bonds,” its website shows. Tracing its roots to an asset-management unit within commodities giant Cargill Inc. in the early 2000s, the fund has never lost money over a calendar year, according to a person with knowledge of the fund’s performance who declined to be identified because they weren’t authorized to speak publicly.
McGarry is known in the market as one of Garda’s top performers, generating tens of millions of dollars most years, according to people familiar with the fund. He has a stomach for taking large risks, sometimes making bets so big they can move global markets, one of the people said. He made more than $100 million for 2020, a year riven by intense volatility amid the coronavirus pandemic, they added. They declined to be identified because they weren’t authorized to speak publicly.
--With assistance from Nishant Kumar, Max Harlow, Olivia Fletcher and Lucca De Paoli.
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