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Special Report

Impact investing


Irish reserve fund “yellow cards” two managers

IRELAND - The 10.1 billion-euro National Pensions Reserve Fund, says it has shown the “yellow card” to two of its of 18 asset managers.

A spokesman for the fund - which posted a 2.7% return in the first quarter of 2004 - declined to name the managers. But he told IPE the National Treasury Management Agency, which oversees the fund, monitors managers on a daily basis and formal meetings occur every six months. Due diligence visits are scheduled every 18 months.

“Managers are supplied with the agenda in advance and are required to come prepared to answer detailed questions,” the fund explained in its 2002 report.

Factors such as investment process, stability of the investment team and performance are considered, when formal meetings occur.

Following each manager review meeting, the NTMA reports to the fund Commission, instituted in April 2001, and issues an assessment: retain, review or terminate.

“Performance, particularly short-term performance, is not necessarily a reliable indicator of the probability of a manager’s future access,” the report also said.

The National Pension Reserve Fund, created in 2001 to provide partial funding of Ireland’s pension costs from 2025, reported in April a first quarter growth of 268 million euros – a return of 2.7%. It returned 12.8% in 2003.

According to the fund’s quarterly performance statement in March, equities account for 76.1% of its portfolio (7.7 billion euros) while bonds had a 13.66% share (1.3 billion euros). Cash and other investments were 10.3% of the portfolio (just over one billion euros).

The managers include Barclays Global Investors, Bank of Ireland Asset Management, State Street Global Advisors, Goldman Sachs Asset Management, Invesco Asset Management, J P Morgan Fleming, Schroder Investment Management, Irish Life Investment Managers and Deutsche Asset Management.

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