IRELAND – The National Pensions Reserve Fund may soon commit to further funds targeting Ireland's small and medium-sized enterprises (SME), the country's minister for finance has said.
Indicating that an earlier €500m commitment to three SME funds would be the first of many, Michael Noonan told the Dáil the NPRF was examining other funds that would "complement" those managed by BlueBay Asset Management, Better Capital and Carlyle Cardinal Ireland.
Noonan said late last week that the reserve fund was currently reviewing other opportunities, hoping that the eventual "suite of funds" would be able to assist across the "full spectrum of SME financing needs".
In response to a second question, the minister also confirmed that the proposed €450m SME Credit Fund under development by BlueBay, to which the NPRF has committed up to €325m after signing of a letter of intent, would have a seven-year lifespan.
Noonan also stressed that the fund would only act as a lender, rather than a buyer of distressed debt.
"There is no element within the SME Credit Fund strategy of acquiring distressed loans with a view to obtaining control," he said.
BlueBay hopes the fund will be functional by the end of the second quarter.
Separately, the country's government has published its legislative agenda for the current parliamentary term, confirming that it will bring forward a bill to change the focus of the NPRF.
The document, prepared by government chief whip Paul Kehoe, said the Bill would reorientate the NPRF "into a strategic investment fund (SIF)".
The use of SIFs to attract third-party investors was first debated more than a year ago.
The Department of Finance did not answer when asked whether the wording of the document meant NPRF assets would no longer be the ultimate responsibility of the NPRF Commission, earmarked to pay for public pension expenditure from 2025.
Instead, a spokeswoman told IPE the NPRF would be likely to have a "commercial Ireland focused mandate".
She added that the fund would look to act as a cornerstone investor and "leverage its resources" by attracting third-party investors, as it had done in the case of the SME funds.
"While the need for the state to provide for social welfare and pension obligations has not abated, fostering economic growth and employment in Ireland is being prioritised in line with the programme for government commitments," she added, saying that the fund's resources would be "redeployed accordingly".
Asked whether the repeated emphasis on the NPRF in her response meant the fund would remain, the spokesman said no further details could be provided at present.
"We are still working on the details, which require government agreement," she said.
A greater domestic exposure would require legislative changes in addition to the amendments that allowed for the fund to recapitalise Bank of Ireland and Allied Irish Banks to avoid the lenders' collapse.
In May last year, the government re-committed to focusing the reserve fund's remaining €6.1bn discretionary portfolio towards domestic investment in an effort to boost Ireland's post-bailout economy.