IRELAND - The Irish National Pension Reserve Fund has significantly pulled back its investment returns since the beginning of the year and delivered a total positive gain of 8.9% under its altered asset allocation structure.

The NPRF now manages a discretionary portfolio worth two-thirds of its assets alongside a 33.6% holding in Bank of Ireland and Allied Irish Bank, following a move by the Irish government to save the Irish banks from collapse.

While no investment gain is yet listed regarding the ‘direct investments' or bank assets, the discretionary portfolio generated a return of 11.7% in the three months to 30 September 2009, and a 16.4% positive return since the beginning of January, to boost the reserve fund assets to €20.9bn

The Irish pensions market was one of the worst hit during last year's financial crisis as many of the local assets were invested in domestic stocks and real estate, and the average pension fund lost approximately 30% of their assets, and the NPRF sustained losses of -30.4%. (See earlier IPE story: NPRF falls to €15.5bn as Q1 returns fall 6.7%)

While the banks are held at cost and pay a non-cumulative fixed dividend of 8% into the NPRF only when they are declared by the banks, the remaining asset allocation is designed to continue to generate positive returns.

Asset allocation to the end of September 2009 was:

Large cap equity                               62.3% of discretionary portfolio (DP), 41.4% of total fund (TF) Small equity                                      5% DP, 3.4% TF Emerging markets equity                  5.% DP, 3.4% TF Private equity                                    3.7% DP, 2.4% Property                                            3% DP, 2% TF Commodities                                     0.6% DP, 0.4% TF Bonds                                                8.8% DP, 5.8% TF Currency and asset allocation funds 1.3% DP, 0.8% TF Cash                                                  10.3% DP, 6.8% (TF)

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