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National Pensions Reserve Fund invests €250m in Irish infrastructure

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IRELAND - The €5bn Irish National Pensions Reserve Fund (NPRF) has committed €250m to a target €1bn fund set up to invest in privatised domestic infrastructure assets.

The fund, which will be managed with full discretion by AMP Capital, aims to capitalise on the expected divestment of state-owned infrastructure assets over the next few years.

Transport, utilities and social infrastructure assets will be among the categories targeted.

The fund is also expected to benefit from the government's plan to fund upgrades to energy and transport networks across the republic with proposed EU 'project bonds', which would tap debt markets to finance new infrastructure projects.

AMP Capital also has a mandate to invest 30% of the fund in greenfield projects.

Boe Pahari, AMP Capital's head of infrastructure for Europe, said: "The investments will primarily be existing assets, but it's important to have the option to invest in new projects, especially in a growing economy.

"The indicators for the Irish economy are quite sound compared with the rest of Europe. We want to be able to invest in that growth."

She added: "In the rest of the euro-zone, you have more stable economies, with low-risk, moderate-return environments. At least for a while, Ireland will be value opportunity for investors looking to come into an economy that's getting back on track.

"Now's the time to capture the value because it won't be there for long."

A spokesman for the €5bn NPRF said it decided a few months ago to reallocate part of its funds under management to infrastructure after mulling domestic opportunities in the sector as far back as 2008 - then under political pressure to enter joint ventures with government bodies.

The capital in the NPRF's discretionary portfolio has significantly depleted since then after the government forced it to direct funds to bail out the banking sector, with 9.1% losses reported on its 'directed' portfolio at the end of June.

The spokesman said the NPRF was confident AMP Capital would be able to bring in additional investors to make up the €1bn, but that who those investors might be was not a particular concern.

"We want to make sure the proper standards are in place, but we have full confidence in the fund manager," he said.

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