IRELAND - Falling bond markets allowed the National Pensions Reserve Fund (NPRF) to complete its government bond allocation and return 6.9% in the first half of this year.
Official figures released today reveal the NPRF - set up in 2001 to finance meet Ireland's social welfare and public service pension costs from 2025 onwards - has assets of €21bn to the end of June 2007, thanks to a 4.9% return over the second quarter.
Dr Michael Somers, chief executive of the National Treasury Management Agency (NTMA), which manages the fund as agent of the National Pensions Reserve Fund Commission, said the fund is said to have improved its underweight position in government bonds to 16.4% and committed a further €1bn to the bonds market, as well as moving a further €215m into private equity and property vehicles.
"Fund growth was driven by its global equity investments with bond markets falling due to investor concerns that short-term interest rate increases may still have some way to go," said Somers.
"While equity markets have proven resilient thus far, they remain vulnerable to interest rate increases and rising oil prices," he added.
US-based Weathergage's venture capital fund of fund picked up a private equity allocation worth €22m while the Fortress Investment Fund V and well as its US/Europe co-investment fund saw investments of €48m and €26m respectively.
On the property front, CB Richard Ellis saw a recommitment as it received €45m into its Strategic Partners III European-based commingled fund, while the Morgan Stanley Real Estate Fund VI International - now the biggest property fund in the world $8bn (€5.8bn) in assets under of management - received an allocation of €74m and the US-based Madison Marquette Retail Enhancement Fund received €56m.
These latest investments bring NRPF's total private equity commitment to €786m while the fund now holds over €1bn in property.
The National Pensions Reserve Fund (NPRF) has invested around 1% of GNP since it was established by the Irish Government in April 2001.