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Ireland Strategic Investment Fund (ISIF)

PRI reporting framework 2018

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Organisational Overview
Basic information [OO 01 - 09] Asset class implementation gateway indicators [OO 10 - 12] Peering questions [OO LE 01 - INF 03]
Strategy and Governance
Investment policy [SG 01 - 04] Objectives and strategies [SG 05 - 06] Governance and human resources [SG 07 - 08] Promoting responsible investment [SG 09 - 11] Outsourcing to fiduciary managers and investment consultants [SG 12] ESG issues in asset allocation [SG 13 - 15] Asset class implementation not reported in other modules [SG 16 - 17] Innovation [SG 18] Communication [SG 19]
Indirect – Manager Selection, Appointment and Monitoring
Listed Equity and Fixed Income Strategies [SAM 01] Selection [SAM 02 - 03] Appointment [SAM 04] Monitoring [SAM 05 - 07] Outputs and outcomes [SAM 08 - 09]
Direct - Listed Equity Incorporation
ESG incorporation in actively managed listed equities [LEI 01 - 10] Implementation processes [LEI 01 - 10] (A) Implementation: Screening [LEI 04 - 06] (C) Implementation: Integration of ESG issues [LEI 08 - 10] Outputs and outcomes [LEI 12 - 14]
Direct - Listed Equity Active Ownership
Engagement [LEA 01 - 14] Overview [LEA 01 - 02] Process [LEA 03 - 10] Process for engagements conducted via collaborations [LEA 05 - 06] Process for engagements conducted with/on your behalf by service providers [LEA 07 - 08] General processes for all three groups of engagers [LEA 09 - 10] Outputs and outcomes [LEA 11 - 14] (Proxy) voting and shareholder resolutions [LEA 15 - 24] Overview [LEA 15] Process [LEA 16 - 20] Outputs and outcomes [LEA 21 - 24]
Assurance
Assurance [CM1 01.1 - 01.7]
Export Public Responses
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You are in Organisational Overview » Basic information

Basic information

OO 01. Signatory category and services

01.1. Select the type that best describes your organisation or the services you provide.

01.3. Additional information. [Optional]

Fund Background

The National Pensions Reserve Fund (NPRF) 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.

As fo year end 2017, the Discretionary Portfolio accounted for 44% of the value of the Fund. The Fund's Sustainability and Responsible Investment Strategy (SRIS) applies only to the Discretionary Fund and ISIF's PRI reporting reflects this throughout.

Sustainability and Responsible 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.

Each year, the PRI reporting is quite different to previous years responses as they Fund evolves. For the purposes of this report assets as at year end 2017 are reported, but additional descriptive information is provided throughout as appropriate. 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 was finalised and new service providers (portfolio analytics, active ownership and ESG framework) were on-boarded during Q2 2017.

Further information on the Fund, its mandate and investments to-date are available on the Fund's website: www.isif.ie

OO 02. Headquarters and operational countries

02.1. Select the location of your organisation’s headquarters.

Ireland

02.2. Indicate the number of countries in which you have offices (including your headquarters).

02.3. Indicate the approximate number of staff in your organisation in full-time equivalents (FTE).

45 FTE

02.4. Additional information. [Optional]

Staff:  45 ISIF direct staff as at end Dec 17, plus c. 35 FTEs across other business units (Finance, HR, IT, Legal etc)

OO 03. Subsidiaries that are separate PRI signatories

03.1. Indicate whether you have subsidiaries within your organisation that are also PRI signatories in their own right.

03.3. Additional information. [Optional]

OO 04. Reporting year and AUM

04.1. Indicate the year end date for your reporting year.

31/12/2017

04.2. Indicate your total AUM at the end of your reporting year, Exclude subsidiaries you have chosen not to report on and any advisory/execution only assets.

Total AUM
trillions billions millions thousands hundreds
Currency
Assets in USD
trillions billions millions thousands hundreds

04.5. Additional information. [Optional]

ISIF Assets and Mandate

On commencement the ISIF absorbed the NPRF’s global portfolio and its directed investments. The total Fund size at the transition date (21 December 2014) was €20.5 billion with €13.4 billion in Directed Investments and €7.1 billion in the Discretionary Portfolio.

The value of the Discretionary Portfolio as at 31.12.2017 is €8.7 billion. These are the assets for PRI reporting.

The dual objective mandate of the ISIF – investment return and economic impact – represents a new approach to investing for the Fund and will require all investments to generate both investment returns and economic impact in Ireland, thereby re-configuring the ISIF from a sovereign wealth fund into a sovereign development fund.

Past Fund History (from NPRF to ISIF)

The National Pensions Reserve Fund of Ireland was established in April 2001 "for the purpose of meeting as much as possible of the cost to the Exchequer of social welfare pensions and public service pensions to be paid from the year 2025 until the year 2055“, as set out in the National Pensions Reserve Fund Act, 2000.

The Fund’s legislative remit was extended in 2009 and 2010 to allow the Minister for Finance to direct the NPRF Commission to invest in credit institutions in certain circumstances and in Government and Government-guaranteed securities and to make payments to the Exchequer to fund capital expenditure in the years 2011 to 2013. As a result of these changes the Fund now comprises two separate Portfolios: 1. Discretionary Portfolio 2. Directed Portfolio (public policy investments in AIB and Bank of Ireland) These "Directed Investments" are monitored, managed and reported on separately from the main "Discretionary Portfolio".

In June 2013 the Government announced its legislative proposals to establish the Ireland Strategic Investment Fund (ISIF) on a statutory basis and stated that its mandate would be to invest on a commercial basis to support economic activity and employment in Ireland. The NTMA (Amendment) Bill was published on 15 May 2014 and subsequently enacted on 28 July 2014. The  commencement of the Act (22 Dec 2014) involved the dissolution of the National Pensions Reserve Fund Commission, with oversight and management of ISIF passing over to a new overarching NTMA Board (“the Agency”) and its Investment Committee.

 

OO 06. How would you like to disclose your asset class mix

New selection options have been added to this indicator. Please review your prefilled responses carefully.

06.1. Select how you would like to disclose your asset class mix.

Internally managed (%)
Externally managed (%)

 

Listed equity <10% 2 <10% 9
Fixed income <10% 6 10-50% 37
Private equity <10% 1 <10% 6
Property 0 0 <10% 5
Infrastructure <10% 1.3 <10% 3.2
Commodities 0 0 0 0
Hedge funds 0 0 10-50% 22
Forestry 0 0 <10% 0.5
Farmland 0 0 0 0
Inclusive finance 0 0 0 0
Cash 0 0 <10% 7
Other (1), specify 0 0 0 0
Other (2), specify 0 0 0 0

06.2. Publish asset class mix as per attached image [Optional].

06.3. Provide contextual information on your AUM asset class split. [Optional]

For the purposes of this breakdown asset allocation is provided on the basis of assets drawn and valued. This breakdown is not reflective of commitments made across the various asset classes. ISIF has also classified its Absolute Return investments as Hedge Funds purely for reporting purposes.

OO 07. Fixed income AUM breakdown (Private)

OO 08. Segregated mandates or pooled funds (Private)

OO 09. Breakdown of AUM by market (Private)

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