The Transformation of Ireland’s NPRF into a SDSWF
Irish Finance Minister Michael Noonan along with other senior public officials provided key updates regarding the NTMA Amendment Bill 2013. The bill would modify the direction of the National Pension Reserve Fund’s €6.4 billion discretionary portfolio toward Irish commercial investments. In effect, the remaining part of the sovereign pension fund would transform itself into a strategic development sovereign wealth fund (SDSWF). The SDSWF would be called the Ireland Strategic Investment Fund (ISIF).
The global financial crisis which led to the fall of two major Irish banks jarred senior Irish public officials.
Similar actions have been taken by France, Italy and Russia in terms of creating strategic development funds. These development funds are created to stimulate local economic growth, attract private capital and strengthen state-owned businesses while earning a commercial return. Another part of the bill includes moving NewERA out of the NTMA and enabling statutory powers. Part of the mandate besides generating commercial returns is to generate economic activity in Ireland. By investing in Irish development projects like infrastructure, domestic jobs will be needed. Lastly, by having the Ireland Strategic Investment Fund as a cornerstone investor in the Irish economy, it can attract private capital through unique opportunities not always available to the private sector.[ Content protected for Sovereign Wealth Fund Institute Standard subscribers only. Please subscribe to view content. ]
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