Saturday 18 November 2017

State Street, Citi and Nomura vie for NPRF sales

Emmet Oliver Deputy Business Editor

The National Pension Reserve Fund will choose from State Street, Citigroup and Nomura when looking for advisers on liquidating its large number of positions in the stock exchange at home and abroad.

One of the three firms will be chosen as a "transition manager" to advise the fund and help it get as much value as possible when it sells out of its large portfolio of stocks, which are heavily concentrated in the US, but also in Europe, Asia and Ireland itself.

The National Pension Reserve Fund is supposed to provide €17.5bn towards the €85bn IMF/EU rescue package, although at this stage nobody knows how much of the money will be drawn down.

The pension fund appoints advisers for specific pieces of work as they arise and it is understood all three of the firms, two American and one Japanese, have advised the fund on previous sales of stocks and bonds.

The fund can't disclose who might be doing specific work at any one time as that could affect the ability of the firm to maximise value for the fund.

"Over the past two years or so as the fund has liquidated various positions, each of these firms has carried out work for the fund,'' said a spokesman.

Penalties

The pension fund wants to avoid the "market seeing us coming" said the head of the NTMA, John Corrigan, last week. The fund would incur penalties if it sold out of private equity and property funds, but with the S&P expected to rise by at least 10pc this year, the fund should be able to generate strong returns from its sales, once it gets its timing right.

Most of the fund's equities are managed on a daily basis by large international firms like Goldman Sachs and Pioneer Investments.

The fund uses active and passive investment strategies.

The equity portfolio is mainly in standard blue chips, with less than 5pc in small cap shares. The last set of results from the fund showed its investment return (year to date) in September at 4.9pc.

Since its inception, the fund has outperformed most private Irish pension funds, Mr Corrigan stated last week.

Irish Independent

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