NTMA to get new mandate for running national pension fund
The NTMA's contract to manage Ireland's €24.4bn national pension reserve fund has expired and the state agency looks set to get Finance Minister Michael Noonan's permission to continue the arrangement.
The NTMA, headed up by John Corrigan, manages a €14.9bn portfolio in the fund and also so-called "directed investments'' in AIB and Bank of Ireland worth €9.4bn at the end of last year. There were suggestions last night the NTMA's mandate will be renewed for five years, a move requiring sign-off by Noonan.
Under legislation, the NTMA has been managing the fund for the last decade, but according to Department of Finance briefing material, this ended on April 2, 2011.
Who gets to manage the fund in future now comes down to the National Pension Reserve Fund Commission, a body made up of seven members. It is understood they are likely to write to the minister seeking the reappointment of the NTMA.
The loss of the contract would be a major blow, but it is unlikely Mr Noonan will ask anyone else to manage it. Mr Corrigan is an ex-officio member of the commission.
The pension fund is set to be heavily utilised as part of the IMF/EU programme, with €12.5bn coming from this source towards the programme.
This will be supplemented by €5bn of cash reserves built up by the NTMA over recent years. The total amount of the IMF/EU programme is €85bn.
The pension fund's discretionary portfolio earned a return of 11.1pc in 2010.
Since the fund's inception in April 2001, this portfolio has delivered an annualised return of 3.4pc. In 2010, the main portfolio benefited from strong equity markets, particularly in emerging markets. The strength of overseas currencies against the euro was also a contributor.