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Cerberus embarks on Ulster Bank hiring spree

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Cerberus Capital Management, the U.S. private equity group, has embarked on a hiring spree of Ulster Bank Belfast staff, as bidding for a £1.2 billion ($1.94 billion) Ulster Bank loan portfolio reaches its final stages.

Kevin Craig, formerly a director at Ulster Bank's GRG division, which has attracted controversy over some of its actions since the credit crisis, has joined the Belfast office of Cerberus, to manage some of the loans bought by the U.S. giant. Several other Ulster Bank employees are believed to be following him, according to CNBC sources in Belfast.

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Craig declined to comment when contacted by CNBC at Cerberus's Belfast offices.

The outcome of the bidding process for Project Achill, a portfolio of assets being sold off by Ulster Bank, owned by state-backed Royal Bank of Scotland, is expected within weeks. Cerberus, which has already snapped up a portfolio of loans from Nama, the "bad bank" created by the Irish banking bailout, is on the shortlist to take over the portfolio.

The assets include properties owned by troubled Irish developers who borrowed money from Ulster Bank during the boom years.

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The news comes amid growing disquiet in Ireland over the ownership of SME loans in particular. Danske Bank, which has a large Northern Ireland presence after buying up Northern Bank in 2004, is set to sell off its SME loan portfolio, according to a report in the Sunday Business Post.

Telecoms billionaire Denis O'Brien this week warned the U.S. funds buying up loan packages were a "big blemish" from the credit crisis, in an interview with Irish Central, the U.S. based Ireland-focused website.

"A lot of the hedge funds that have come into Ireland have bought loans at probably a higher price than they should have, so they have to get more and more aggressive at the borrowers and that's not good," he said.

Cerberus and Ulster Bank did not comment when contacted by CNBC.

- By CNBC's Catherine Boyle.