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ISIF’s Irish portfolio beats global fund on returns in H1

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The Ireland Strategic Investment Fund (ISIF) suffered a 1.3% loss on its global portfolio of investments between January and June, while its Irish portfolio made a positive 2.7% return in the period, according to its update for the first half of the year. 

The sovereign development fund also detailed plans for a strategy rejig in the report, which will see the ISIF shifting its domestic focus to five key themes from now on, away from its hitherto general cross-sectoral approach to investment in Ireland.

Overall, ISIF, which was born out of the former National Pensions Reserve Fund, made a 0.3% loss on investments in the first half of this year when returns from the global portfolio and Irish portfolio are combined.

In the full year 2017, the fund made a 4.3% overall investment return, composed of a 4.1% gain on its global portfolio and 4.5% on the Irish portfolio. 

Since inception in 2014, the overall return was 2.3% at the end of June 2018, it reported.

Rather than aiming solely for wealth creation, ISIF has a “double bottom line” objective, whereby it targets investment returns as well as economic impact.

By the end of June 2018, ISIF reported a total of €3.8bn of committed capital, which it said had unlocked an additional €6.6bn from co-investors, leading to a total of €10.4bn in capital commitments.

The ISIF welcomed the finalisation of its investment strategy review, which it said “takes account of the risks that may be posed by economic overheating and the appropriateness of ISIF’s investment mandate given our current economic performance”.

The fund’s double bottom line mandate is not being changed in the review, but in the light of strong economic conditions, it is now to focus on priorities to support “Project Ireland 2040” — a national development plan unveiled in February.

This new focus is directed at five key themes: housing, indigenous industry, regional development, Brexit, and climate change.

ISIF’s total fund value was €8.7bn at the end of 2017.

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