Ireland’s sovereign wealth fund will pull several billion euro from global asset managers over the next five years as the Government tries to use the fund’s assets to bolster the domestic economy.
Some €3 billion of the sovereign fund’s €7.9 billion of investible asset is in global equities, bonds, commodities, infrastructure and absolute return funds run by international asset managers. It will divest from these holdings by 2020 as part of its new mandate to invest in projects and companies with the potential to create jobs in Ireland and boost the economy.
Acadian Asset Management, BlackRock, Deutsche Asset Management and Unigestion are the international asset managers running the largest sums of money for the fund.
Eugene O'Callaghan, director of the Ireland Strategic Investment Fund, which was established last December, said: "We are implementing a strategy that will wind down the global assets over a five-year period as we are ramping up the Irish assets."
The Irish fund will continue to place money with asset managers as long as they offer Irish-focused funds and investment opportunities.
Mr O’Callaghan said asset management fees are a concern, especially when it comes to private equity investments.
The Irish fund is a successor to the National Pension Reserve Fund, the rainy-day vehicle established during the Celtic Tiger years. Its €23 billion was raided during the financial crisis to bail out the banks.
The sovereign wealth fund has a return target of 4 per cent a year. – Copyright The Financial Times Limited 2015
