IRELAND - The €18.8bn National Pensions Reserve Fund (NPRF) returned 12.3% on its investment in 2006 a report revealed. That is 7.3% less than in 2005, which was a year of exceptionally high returns for the NPRF.
The fund returned of €2bn in 2006 mostly because of strong returns on its European equity investments. Since its establishment in 2001 the fund has now returned €3bn, its annualised return stands at 6.5%.
However, in the second quarter of 2006 the fund saw its returns plunge to almost -4% but in Q3 the returns were back up to 5.5%, the same as in Q1.
Commenting on the Q2 results in summer 2006 the fund had stated that its "relatively high European weighting and the Commission's decision to maintain an underweight position in bonds in view of the historically low yields of recent years have enabled it to report a positive half year in what is a difficult market environment". A comment on the fund's 2006 overall performance by the NPRF could not be obtained before the deadline.
In 2006 the fund significantly increased its exposure to property from 0.8% to 2.8%. It also hiked its private equity exposure from 0.1% at year-end 2005 to 0.5%. The equity portfolio was decreased from 78.7% to 76.8%. Over the next years this part of the portfolio is set to decrease even more to 69% in order to increase investments in alternative assets such as property and private equity.