Ireland's Department of Finance is proposing to liquidate the National Pensions Reserve Fund's €6.4 billion ($8.5 billion) discretionary portfolio to create a new fund that supports domestic economic activities, according to documents relating to the amendment bill posted on the department's website.
“The National Pensions Reserve Fund will become the Ireland Strategic Investment Fund,” according to the documents. “This means that NPRF money invested in the discretionary portfolio … will now become available to invest in Ireland as suitable investment opportunities arise and are developed.”
In the quarter ended March 31, the discretionary portfolio reported a 2.8% return. About 35% of the assets were allocated to public equities, and 31% to fixed income and cash. Private equity, real estate and infrastructure accounted for 11%, 7% and 6% of the portfolio, respectively. The remainder was invested in commodities and absolute-return funds, according to the Dublin-based NPRF's latest financial update. (The NPRF also oversees a separate €8.8 billion portfolio, called the directed portfolio, directly investing in Allied Irish Banks and the Bank of Ireland.)
“While the need for (Ireland) to provide for social welfare and public service pensions obligations has not abated, fostering economic activity and employment is currently a greater priority and this will in turn put the state in a better position to meet its pensions obligations in the longer term,” according to the documents.
NPRF spokesman Ray Gordon could not be reached by press time for further information about how the ex-Ireland portion of the discretionary portfolio will be liquidated or the managers affected by the proposal.
According to the most recent information posted on the pension fund's website, the managers for the fund include BlackRock, State Street Global Advisors, Oechsle International Advisors, Putnam Investments, Generation Investment Management, Goldman Sachs Asset Management, Schroder Investment Management, Acadian Asset Management, Batterymarch Financial Management, Principal Global Investors, DB Advisors, Bridgewater Associates and J.P. Morgan Asset Management.