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Overview

Quarterly Performance and Portfolio Update at 31 March 2017

Fund Overview

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 €8.1 billion as at 31 March 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 €12.6 billion at 31 March 2017.

 

The Total Fund size at 31 March 2017 was €20.7 billion.

Fund at 31 March 2017 €bn % Fund
Discretionary Portfolio 8.1 39%
Directed Portfolio 12.6 61%
Total Fund 20.7 100.0%

Fund Performance

The Discretionary Portfolio earned a preliminary year to date return of +0.6% and has generated an annualised return of +2.1% since inception on 22 December 2014.

Performance 31 December 2016 to 31 March 2017 22 December 2014 to 31 March 2017*
Discretionary Portfolio +0.6% +2.1% p.a.
Directed Portfolio 0.0% +4.0% p.a.

*Returns for periods greater than one year are calculated on an annualized basis

Asset Allocation

(a) Discretionary Portfolio

The Discretionary Portfolio Asset Allocation as at 31 March 2017 is set out below:

31/03/2017
Asset Allocation Value €m Fund Weight
Quoted Equities 820 10%
Fixed Income 3,581 44%
Cash & Cash Equivalents 578 7%
Total Financial Assets 4,159 51%
Private Equity 524 6%
Property 270 3%
Forestry 41 1%
Infrastructure 322 4%
Absolute Return 1,980 24%
Total Alternative Assets 3,137 39%
Total 8,117

Irish Portfolio

The ISIF and third party commitments as at 31 March 2017 to investments aligned with the ISIF mandate are set out below:

31/03/2017 Total ISIF Commitment (€m)
Water 450
Infrastructure 361
Energy 155
SME 385
Food & Agriculture 120
Real Estate 502
Venture Funds 504
Direct Equity 133
Big Idea/Innovation 12
Other 142
Total 2,764

The ISIF’s €2.8bn has unlocked third party capital to generate a total investment commitment of €8.1bn in Ireland. €1.5bn of the Fund’s Irish commitments have been drawn by investee entities as at 31 March 2017.

 

Global Portfolio

The breakdown of the Global Portfolio by manager is set out below:

ManagersMandatesMarket Value €m
Goldman Sachs Asset ManagementMulti-Asset1,550
J.P. Morgan Asset ManagementMulti-Asset1,205
Irish Life Investment ManagersMulti-Asset823
Amundi Asset ManagementFixed Income632
Deutsche Asset ManagementFixed Income258
BlackRock Investment Management Fixed Income318
Muzinich & Co.Fixed Income231
Acadian Asset ManagementEquity264
Generation Investment ManagementEquity182
Blackstone Alternative Asset ManagementAbsolute Return247
AQR Capital ManagementAbsolute Return197
Bridgewater AssociatesAbsolute Return231
Global Property (21 legacy managers)Property112
Cash & Financial AssetN/A352
Total6,503

(b) Directed Portfolio

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 31 March 2017 the Directed Portfolio comprised;

(i)  ordinary shares in Allied Irish Banks valued at €4.17* per share, based on a preliminary external valuation,

(ii) ordinary shares in Bank of Ireland valued at the market price of €0.24 per share,

(iii) €215m in cash, committed for lending to SBCI.

 

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 99.9 per cent.

 

The Fund to date has received a total of €6.4 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 – preference share dividends and redemption of preference shares totalling €2.2 billion.

 

At 31 March 2017 the Directed Portfolio was valued at €12.6 billion. This consisted of an investment value in Allied Irish Banks of €11.3 billion and in Bank of Ireland of €1.1 billion  together with cash €0.2 billion.

Category Investment value at 31 March 2017(€bn)
Allied Irish Banks* 11.3
Bank of Ireland 1.1
SBCI 0.0
Cash and Equivalent 0.2
Total 12.6

*The Allied Irish Banks shares were independently and provisionally valued in January 2017 based on the estimated financial position of the bank, using publicly available information as at 31 December 2016. This provisional valuation is subject to revision and a final valuation as at 31 December 2016 will be included in the NTMA Annual Report for 2016, which is expected to be published during June 2017.

 

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