Thursday 23 November 2017

Half of new State investment fund going to Dublin

Colm Kelpie

Colm Kelpie

About half of the money pledged by Ireland's strategic investment fund had already been drawn down by the end of last year.

At the end of December, €726m of the €1.4bn committed by the Ireland Strategic Investment Fund had been drawn down, according to ISIF's first economic impact report.

The Government announced two years ago that money in the National Pensions Reserve Fund (NPRF) was being transferred to a new State-backed investment fund.

The funds were expected to be ploughed into projects such as road building, water infrastructure and school building.

The first economic impact report claims that Dublin accounted for 48pc of the ISIF's Irish investments, with the rest of Ireland accounting for 52pc.

And 79 Irish companies with an annual turnover of €472m were said to have benefited so far from ISIF investment.

Eugene O'Callaghan, ISIF director, reiterated the pledge to commit up to another €1bn to additional investments this year.

That would bring to the total Irish investment commitments to between €2bn and €2.5bn.

"These are encouraging figures that show the positive impact that ISIF investments have on the wider Irish economy," he said.

"They show we are making good progress in meeting our 'double bottom line' mandate to achieve a commercial return and support economic activity and employment in Ireland."

ISIF has a dual mandate. It must invest the assets of the fund in a commercial basis in a manner designed to suppory economic activity and employment.

This is described by Mr O'Callaghan as its "bottom line mandate". It also, however, must make a return.

It is targeting a return of about 4pc over its lifetime.

Companies that it is linked to through underlying investments in various funds include TV3, Killiney Hotels, Abrakebabra, Lily O'Briens and technology company Movidius. It is also directly invested in Irish Water.

Venture capital/early stage businesses accounted for 78pc or 62 out of the 79 companies at the end of December.

This represents 29pc of investments made.

This is a result of the fact that venture investing in Ireland was an element of the NPRF's investment strategy in the years prior to the ISIF. The fund is aiming for a more balanced mix of early stage and more mature companies as deployment increases.

About 80pc of the ISIF's capital is to be targeted towards investments where the highest economics impacts are likely, with the remaining portion to be set aside for investments which provide short-term gains.

The 80:20 split is said to be a long-term target, with 60:40 identified as the initial target for the end of this year.

Three-quarters of the investments as of the end of last year is in high economic impact transactions, with 25pc in lower economic impact transactions.

Irish Independent

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