The Ireland Strategic Investment Fund (ISIF) was established on 22 December 2014 with a statutory mandate to invest on a commercial basis in a manner designed to support economic activity and employment in the State.
The Discretionary Portfolio was valued at €8.5 billion as at 30 June 2017. (Figures in this statement are preliminary and unaudited. Total may not add due to rounding.)
The Directed Portfolio (public policy investments in Allied Irish Banks, Bank of Ireland and the Strategic Banking Corporation of Ireland made at the direction of the Minister for Finance) was valued at €11.2 billion at 30 June 2017.
The Total Fund size at 30 June 2017 was €19.7 billion.
The Discretionary Portfolio earned a preliminary year to date return of +1.7% and has generated an annualised return of +2.4% since inception on 22 December 2014.
The Discretionary Portfolio Asset Allocation as at 30 June 2017 is set out below:
The ISIF and third party commitments as at 30 June 2017 to investments aligned with the ISIF mandate are set out below:
The breakdown of the Global Portfolio by manager is set out below:
|Managers||Mandates||Market Value €m|
|Goldman Sachs Asset Management||Multi-Asset||1,557|
|J.P. Morgan Asset Management||Multi-Asset||1,231|
|Irish Life Investment Managers||Multi-Asset||831|
|Amundi Asset Management||Fixed Income||714|
|Deutsche Asset Management||Fixed Income||293|
|BlackRock Investment Management||Fixed Income||320|
|Muzinich & Co.||Fixed Income||233|
|Acadian Asset Management||Equity||259|
|Generation Investment Management||Equity||196|
|Blackstone Alternative Asset Management||Absolute Return||234|
|AQR Capital Management||Absolute Return||194|
|Bridgewater Associates||Absolute Return||216|
|Global Property (21 legacy managers)||Property||112|
|Cash & Financial Asset||N/A||362|
The Directed Portfolio consists of public policy investments in Allied Irish Banks, Bank of Ireland and the Strategic Banking Corporation of Ireland (“SBCI”) that were undertaken on foot of directions from the Minister for Finance.
At 30 June 2017 the Directed Portfolio comprised;
(i) ordinary shares in Allied Irish Banks valued at €4.95 per share;
(ii) ordinary shares in Bank of Ireland valued at the market price of €0.23 per share and
(iii) €215m in cash, committed for lending to SBCI.
In March 2017, and in line with contractual agreements, the Fund’s €25 million loan to SBCI was converted to equity in SBCI, ownership of which was transferred to the Minister for Finance.
Since 2009 the Fund has invested €20.7 billion in preference shares and ordinary shares in Bank of Ireland (€4.7 billion) where the Fund’s shareholding is 13.9 per cent, and Allied Irish Banks (€16.0 billion) where the Fund’s shareholding is 71.1 per cent.
In conjunction with the Allied Irish Banks IPO, on 27 June 2017, the Fund was directed to sell 780 million shares at a price of €4.40 per share, which resulted in a reduction of ISIF percentage holding from 99.9 per cent to 71.1 per cent. On 29 June 2017, €2,986 million of proceeds was transferred to the Exchequer on foot of Ministerial Directions.
At 30 June 2017, the Fund had received a total of €9.4 billion in cash from its directed investments comprising (i) in respect of Bank of Ireland – preference share dividends, redemption of preference shares and repurchase of warrants by the Bank and the sale of ordinary and preference shares to private investors, totalling €4.2 billion; and (ii) in respect of Allied Irish Banks – the sale of ordinary shares, preference and ordinary share dividends and redemption of preference shares totalling €5.2 billion.
At 30 June 2017 the Directed Portfolio was valued at €11.2 billion. This consisted of an investment value in Allied Irish Banks of €9.5 billion and in Bank of Ireland of €1.0 billion, together with €0.2 billion in cash and €0.4 billion in receivables in respect of the sale in June of shares in Allied Irish Banks.
On 6 July 2017 and on foot of directions from the Minister for Finance, the €448 million of cash proceeds from the sale in June of Allied Irish Banks ordinary shares was received and transferred to the Exchequer.