The fund’s directed portfolio was earlier this week revealed to be worth €13.1bn, up from €8.6bn in December 2012.
Its holdings comprise both ordinary and preference shares in AIB, ordinary shares in Bank of Ireland (BOI) and cash from the proceeds of the sale of BOI preference shares – all acquired after the Irish government invested €20.7bn in both financial institutions during the financial crisis.
As in previous years, the NPRF Commission independently valued its stake in AIB due to concerns the company’s 0.2% free float did not reflect the bank’s true value.
In a statement sent to IPE, the Commission said: “Following this exercise, the AIB ordinary shares have been valued on a preliminary basis at €0.0126 cents per share, and the AIB preference shares have been valued at 100% of cost.”
The 2013 price is a marked increase over the previous value of €0.0079 per share, an estimate drawn up by Goodbody Corporate Finance for the fund’s 2012 annual report.
The NPRF’s stake in BOI, accounting at year-end for just over 14% of voting rights, was valued at €1.1bn, in line with the bank’s market price at the end of December.
The Commission was keen to highlight that the government was close to breaking even on its support of BOI, noting that the initial investment of €4.7bn had so far yielded €4.2bn in cash repayments.
Including the remaining shares, the total income and value from the bailout stood at €5.4bn, resulting in a €700m gain for the exchequer.
However, due to the decline in value of the AIB shareholdings, down €2.2bn at the end of 2013, and a lack of cash realised from sales of preferences shares, the state still stands to lose 26% from its support of both banks.
The fund’s remaining €6.8bn, held in the discretionary portfolio and earmarked for domestic investment once the Ireland Strategic Investment Fund is launched, returned more than 6% in 2013.
At the end of December, the directed portfolio consisted of €1.1bn in BOI shares, €10bn in AIB shares and €1.9bn in cash holdings.
Including the €6.8bn discretionary portfolio, the NPRF managed assets worth nearly €20bn.
For more on the Irish pension system, see the February issue of IPE