The National Pensions Reserve Fund (NPRF) legally transitioned to the Ireland Strategic Investment Fund (ISIF) on 22 Dec 2014. The National Treasury Management Agency (NTMA) is the Manager of the ISIF. The NTMA is a state agency which provides a range of financial and risk management services to the Irish Government. Within the NTMA, the executive function relating to the ISIF is carried out by a specialist investment team (the ISIF Unit). NTMA also provides wide ranging operational and compliance support for the Fund’s investment activities.
The Ireland Strategic Investment Fund (ISIF) comprises two separate Portfolios:
1. Discretionary Portfolio
2. Directed Portfolio (public policy investments in AIB and Bank of Ireland, prudent valuation basis)
These "Directed Investments" are monitored, managed and reported on separately from the main "Discretionary Portfolio". The Governance responsibilities (including voting, Board nominations and remuneration approval) and investment decisions in respect of the Directed Investments lie solely with the Minister for Finance and neither the NTMA Board, nor ISIF Investment Committee have any discretion in relation to these investments.
The Discretionary Portfolio accounted for 35% of the value of the Fund at 21 December 2014 (date of commencement). The Fund's responsible investment policy applies only to the Discretionary Fund and ISIF's PRI reporting reflects this throughout.
Responsibel Investment for a new mandate
The transition to ISIF is ongoing, involving the development and implementation of a new investment process for Irish investment together with the complex restructuring of the Fund's Global portfolio, which now has a shorter time-horizon.
ISIF must invest on commercial basis in a manner that supports economic activity & employment in the State. As an investor in less liquid domestic private markets, the Fund has to take a long term outlook of the risks as well the opportunities and ultimately the sustainability of a business or the sectors within which it operates. This makes the ISIF naturally very aligned with the broader principles of Responsible Investment and Sustainability. However, the challenge is to implement RI/ESG in a broadly consistent manner across two very different portfolios (shorter- term Global portfolio and longer-term Irish portfolio) as the Fund progresses through this transitionary stage from a well established Sovereign Wealth Fund to a Strategic Development Fund.
This years annual PRI reporting is very different to previous years responses. Over the year the Global Portfolio went through a significant restructuring. For the purposes of this report assets as at year end 2016 are reported, but additional descriptive information is provided throughout as appropriate. Additionally, many Irish investments are being included for the first time.
In addition, the Fund conducted a major tender exercise for new RI service providers across both portfolios towards the end of 2016. This process in currently being finalised and new service providers (portfolio analytics, active ownership and ESG framework) will be in place in Q2 2017.
Further information on the Fund, its mandate and investments made to-date are available on the Fund's website: www.isif.ie