The National Treasury Management Agency (Amendment) Bill 2014, which is currently being debated by Dáil Éireann, will reorient the National Pensions Reserve Fund into the Ireland Strategic Investment Fund (ISIF), which will have a mandate to invest on a commercial basis in a manner designed to support economic activity and employment in Ireland. This means the ISIF will have a dual objective both investment return and economic impact.
One of the key potential advantages of the ISIF will be its ability to attract co-investment from domestic and international third parties. International investors will only put their money to work alongside the ISIF if they have confidence in the commerciality of the investment process.
In recent months, the NTMA, in consultation with the Department of Finance and a number of other Government Departments and Agencies, has been developing an Economic Impact Framework to identify target areas for investment which have higher potential economic and employment impact, and which will also facilitate the identification of categories of investment that would be expected to assist and accelerate normalisation of capital markets in Ireland following the financial crisis.
Given that the ISIF is not yet operational, it is not possible to say now what will be the nature and shape of the ISIF's ultimate investment portfolio. I expect that the ISIF will seek investment opportunities across the country; however, the draft legislation does not mandate fixed allocations of capital for specific regions because the ISIF is primarily a provider of finance and so will be only one player in the development of proposals with economic and employment impact. It would not make sense to have ISIF capital segregated waiting for investment proposals in a particular region when it could be put to good use elsewhere. In any case, the ISIF will be a revolving fund, in the sense that it will seek to realise its investments as appropriate in order to have capital available to make new investments.
The ISIF is open for business and is actively seeking investment opportunities across the country. In March this year the NTMA held a market engagement event in Dublin castle seeking investment opportunities and co-investors. The ISIF can be contacted directly with proposals for commercial investment.