Private investment in State fund almost double that of target

Conor O’Kelly, chief executive, National Treasury Management Agency, at the Ireland Strategic Investment Fund’s annual market engagement event, which took place at Convention Centre Dublin and was attended by over 500 entrepreneurs, investors and advisers. Photo: Colm Mahady/Fennells.

THE State-backed Irish Strategic Investment Fund (ISIF) is attracting €1.9m in private investment for every €1m invested by the state – almost twice the Government’s original target.

To date, there has been €8.1bn of investment in Ireland as a result of the transactions ISIF have invested in, of which €2.8bn is ISIF money, with the remaining €5.3bn coming from other investors. The original target for the ISIF, which is managed by the Na- tional Treasury Management Association, was to attract €1m in private investment for every €1m committed by the State – but the fund is currently attracting €1.9m in investment from the private sector.

Yesterday, the fund hosted a market engagement event at Dublin’s Convention Centre, where attendees heard that 140 Irish firms and projects supported by ISIF investment activity have generated annual revenues in excess of €1bn.

Companies supported by ISIF investment employ more than 22,000 directly and indirectly, with close to 50pc of jobs supported being outside of Dublin.

“We have established a strong pattern of taking a minority interest in commercial investments alongside private capital, and this has enabled us to team up with domestic and global investors to develop a diverse portfolio of high-quality investments,” said Eugene O’Callaghan, ISIF director.

The ISIF has made a number of major investments recently, including ploughing €45m into a venture aimed at easing the ongoing credit squeeze on SMEs, and a €50m investment in a fund run by former executives at Goldman Sachs.

The ISIF has a broad portfolio, which Mr O’Callaghan said was built around enabling investment in the economy, supporting growing businesses, and making investments to enable Ireland to get to the leading edge globally.

The fund also has a number of housing investments providing capital to companies that are engaged in housing and student accommodation projects. Mr O’Callaghan confirmed that the fund had also started investing in a €335m connectivity portfolio in Ireland, at the request of the Government, which is being funded by Aer Lingus proceeds.

When asked about proceeds from the possible sale of AIB having to be used to fund the national debt rather than being spent on domestic investment, Mr O’Callaghan said that the decision on what the proceeds are used for is a policy decision taken by the Minister for Finance and, that the minister frames the mandate of the ISIF.