Ireland’s sovereign development fund has been more successful in catalysing private sector co-investment than it initially thought it would be, based on its original target.
The €8.7bn Ireland Strategic Investment Fund (ISIF) has attracted €5.7bn in private sector co-investment for the €3.4bn it has committed to domestic investments from its own assets. This exceeded the original target ISIF set itself when it was established in 2014, to raise €1m for every €1m it invested.
Total new investment by the fund and its co-investors in 2017 alone amounted to €1.6bn, with the ISIF itself committing €667m to 23 separate Irish investments.
Eugene O’Callaghan, director at ISIF, said: “The ISIF’s differentiating characteristics of flexibility, long-term timeframe and the value it can add as a sovereign partner to both businesses and co-investors have enabled such wide-ranging investments that are consistent with the fund’s double bottom line mandate.”
The fund has a mandate to invest on a commercial basis in a way that supports domestic economic activity and employment.
The fund’s investments gained 4% in 2017, according to preliminary figures released as part of the ISIF’s year-end review for last year.
The 4% return is composed of gains of 4.1% on the ISIF’s global portfolio and 3.4% on its Irish investments.
Since the ISIF’s inception in December 2014, its investment returns have added €655m to the fund’s value, it said. “Exchequer injections” worth €865m – made up of proceeds from the sale of Aer Lingus shares and dividends from its ownership of Allied Irish Bank – took the total fund value to €8.7bn as at the end of December.
O’Callaghan said the fund’s investments to date were well spread across the its strategic themes of “enabling, growing and leading edge”.
Investments in 2017 included significant commitments in the areas of housing, connectivity, renewable energy, SMEs, food and agriculture, technology and life sciences.