Dáil Éireann Debate, Thursday - 13 March 2014
60. Deputy Michael McGrath asked the Minister for Finance the number of projects in which the Ireland strategic investment fund has invested; the number of new jobs created as a result of these projects; and if he will make a statement on the matter. [12683/14]
Amharc ar fhreagraIn anticipation of the establishment of the Ireland Strategic Investment Fund (ISIF), the National Pensions Reserve Fund (NPRF) has committed to a number of investments in Ireland including infrastructure, water, long-term financing for SMEs (both credit and equity) and venture capital. A detailed table of the NPRF commitments to Irish investments at 31 December 2013 is set out as follows:
|
NPRF and 3rd Party Irish Commitments 31/12/2013 |
NPRF Commitment Capital (€m) |
3rd Party Capital (€m) |
Total Project Size (€m) |
Multiple of NPRF Commitment |
|
SME Equity Fund - Better Capital |
50 |
50 |
100 |
2.0x |
|
SME Equity Fund - Cardinal Carlyle |
125 |
125 |
250 |
2.0x |
|
SME Credit Fund - BlueBay |
200 |
250 |
450 |
2.3x |
|
China Technology Fund (Note 1) |
72 |
36 |
72 |
1.0x |
|
Innovation Fund Ireland |
125 |
125 |
250 |
2.0x |
|
Local Venture Capital Funds |
81 |
320 |
401 |
5.0x |
|
Silicon Valley Bank (Note 2) |
36 |
72 |
72 |
2.0x |
|
Irish Water |
250 |
- |
250 |
1.0x |
|
Irish Infrastructure Fund |
250 |
66 |
316 |
1.3x |
|
Irish Forestry |
35 |
187 |
223 |
6.3x |
|
Committed to Date |
1,225 |
1,231 |
2,384 |
2.0x |
Note 1: Included in the NPRF commitment is a €36 million commitment to a global investment fund, which was necessary to secure the third party capital investment of €36 million in Ireland.
Note 2: The NPRF commitment of €36 million is to global investment funds managed by SVB Capital, the investment arm of SVB Financial Group. This investment was required to secure the €72 million Silicon Valley Bank investment in Irish companies.
In addition to the what is contained in the table, the National Pensions Reserve Fund has provided a stand-by credit facility for the N11 and Schools Bundles 3 Public-Private Partnership projects. The mandate for the ISIF will be to invest on a commercial basis to support economic activity and employment in Ireland. This means the ISIF will have a dual objective both investment return and economic impact - and there is little precedent for sovereign funds globally investing with such a "double bottom line", although a number of such funds are beginning to emerge.
In recent months, the NTMA, in consultation with the Department of Finance and a number of other Government Departments and Agencies, has been developing a new Economic Impact Framework, which will be a key element of the ISIF Business Plan. The ISIF Business Plan will be approved in due course by the new NTMA Board. The Economic Impact Framework will seek to identify target areas for investment which have higher potential economic and employment impact, and will also facilitate the identification of categories of investment that would be expected to assist and accelerate normalsation of capital markets in Ireland post the financial crisis. It is expected that the ISIF's investment strategy will involve a combination of investment through funds (such as the SME funds and China Ireland Technology Fund that the NPRF has committed to) and directly (such as the NPRF's participation in recent PPP projects and in the pre start-up stage financing of Irish Water). An important element of the ISIF strategy will be where possible for the ISIF to be a cornerstone investor, thereby acting as a catalyst for additional third party investors. This will significantly increase the economic impact that can be achieved in Ireland.
Because of uncertainty regarding the nature of opportunities that emerge or can be developed, it is not clear at this stage what will be the nature and shape of the ISIF's ultimate investment portfolio and the quantum of co-investment that can be achieved. There will also be a time lag between the NPRF/ISIF commitment and when the economic impact takes place. Therefore it is not feasible at this stage to estimate in advance what the economic activity and employment impacts of the ISIF may be. The ISIF Business Plan and the new NTMA Board are expected to address this issue. In the interim, the NTMA is developing its capabilities for collating and analysing data to measure and report on economic impact on an ex-post basis (i.e. after the investment has been made). This will require a completely new data set to be sought and reported on by funds and the underlying companies in which funds have invested and by companies or project sponsors in which the NPRF has invested directly. While it is standard practice that companies report financial information to their investors, the new ISIF mandate will also require metrics that can be used to help assess economic impact to be reported. The NTMA expects to be able to publish a preliminary assessment of the economic impact of the investments made to date in Ireland by the NPRF during the second quarter of this year.
