Ireland Strategic Investment Fund


  • During 2015 the ISIF committed €759m to investments that will support economic activity and employment in Ireland.
  • The ISIF’s committed investments in Ireland totalled €2.2bn at end-2015, of which €1bn was drawn down at end-2015.
  • Co-investment from private sector partners increases the total committed to Ireland to €5.4bn – a multiple of 2.5 times the ISIF commitment.


  • During 2015 ISIF investments supported 108 Irish companies/projects generating:
    • combined revenues of €1,229m.
    • €358m in exports.
    • €505m in wages and salaries.
  • Almost 18,000 jobs are supported directly and indirectly by ISIF investments.
  • ISIF investment contributed Gross Value Added of €538m to the Irish economy in 2015.


  • The ISIF continued its programme of gradually liquidating its global assets to focus on investing in Ireland, while seeking, in line with its statutory mandate, to generate a return over the long term in excess of the cost of Irish Government debt.
  • The ISIF has implemented a low-risk investment strategy with its global assets during the transition period, which resulted in an investment return of 1.1% to the ISIF Discretionary Portfolio in 2015.

Investment Strategy

Unique Mandate

In December 2014 the assets of the National Pension Reserve Fund (NPRF) transferred to the Ireland Strategic Investment Fund (ISIF). The ISIF has a ‘double bottom line’ mandate to invest in Ireland on a commercial basis in a manner designed to support economic activity and employment in the State. The NPRF Discretionary Portfolio was made available to the ISIF to enable it to make investments that meet this double bottom line mandate. The NPRF Directed Portfolio – primarily public policy investments in the banks – will continue to be managed at the direction of the Minister for Finance.

The ISIF’s double bottom line mandate makes it one of the few sovereign wealth funds globally with a mandate to contribute to economic activity and employment, in addition to delivering commercial returns. The ISIF is required to generate a return over the long-term in excess of the cost of Irish Government debt and has set a medium-term performance objective of +4% per annum.

ISIF Investment Mandate

Double Bottom Line

In seeking to support economic activity and employment as well as generating commercial return, the ISIF has a “double bottom line” requirement for the Fund, necessitating that all of the Fund’s investments generate both investment returns and have a positive economic impact in Ireland.

Investment Returns

Within the context of the ISIF’s double bottom line, all investments must be commercial. Whilst investments will differ in terms of expected returns, risk profiles and time frames, each must deliver an appropriate risk adjusted expected return for each investment.

Economic Impact

In targeting economic additionality, the ISIF’s investment focus is on investments which build the productive capacity of the Irish economy and promote its enterprise sector. The ISIF’s unique characteristics – scale, long-term perspective, flexibility – mean that it can target such investments in a way that many other investors and financiers cannot.

Investment Priorities

In July 2015 the NTMA published the ISIF Investment Strategy, following consultation with the Minister for Finance and the Minister for Public Expenditure and Reform.

ISIF Investment Strategy – Key Features

A Broad Based Portfolio

  • across sectors including but not limited to energy, water, real estate, housing, food & agriculture, technology, healthcare and finance.
  • by types of investment including SME, venture and infrastructure.
  • by regional location of its investments.
  • by asset class including debt, mezzanine, equity and project investments.
  • that seeks to achieve some transformative impact by investment in one or more “big ideas”.

Filling Investment Gaps

Utilisation of the ISIF’s key differentiating features of flexibility, long-term timeframe and credibility as a sovereign investment partner to fill investment gaps and enable transactions which would not otherwise easily be completed.


Attracting co-investment partners where possible so that the impact of investments will be multiplied in the Irish economy.


Risk adjusted rates of return tailored to the specific characteristics of each individual investment.

Overall long-term portfolio return in excess of the average cost of Government debt.

Investments in Ireland

Investments to End-2015

Including investments made by its predecessor (the NPRF), the ISIF had committed €2.2bn to investments consistent with its investment mandate by end-2015. Including third party commitments of €3.2bn, a total of €5.4bn had been committed to Ireland through the ISIF.

ISIF Capital Committed to Ireland at End-2015

In 2015 the ISIF committed a total of €759m to ten new investments across a diverse range of transaction types and sectors.

ISIF Irish Investments 2015

ISIF Investment

50 A cornerstone investment in the €325m IPO of Malin Corporation, an Irish public limited company that applies capital and operational expertise to private, pre-IPO, pre-trade sale operating businesses in dynamic and fast growing segments of the life sciences industry.
11 A commitment to Frontline Ventures I, a €50m early stage venture capital fund that invests in highly innovative early stage information technology companies, primarily in Ireland.
6 An investment in a €45m funding round to support the international expansion of Limerick-based AMCS. AMCS is a global leader in integrated software solutions for the waste and recycling industry.
325 A €500m joint venture with KKR Credit to focus exclusively on lending to Irish residential development projects.
10 A commitment to Highland Europe Fund II, a €330m growth equity fund that invests in rapidly growing internet, mobile and software companies in Ireland, UK and across Europe.
50 A €50m commitment, alongside €50m from institutional clients of US-based Quadrant Real Estate, to finance office development projects in Ireland.
150 Loan facilities of €450m in total, representing a refinancing of the existing €300m National Pensions Reserve Fund facility and a new €150m loan facility.
11 An investment to support an international expansion strategy for software firm Swrve, a global leader in the high-growth sector of in-app mobile marketing automation founded in Dublin in 2007.
54 Long-term funding of €54m which assists in the delivery of student accommodation, facilitates the provision of parallel EIB funding and enables DCU’s €230m Campus Development Programme.
92* Cornerstone $100m investment in Leeds Equity Partners Fund VI, a leading global investor in the education/knowledge industries. This is expected to deliver long-term benefits, including enhanced global connectivity, for the broader education sector in Ireland.

* Approved commitment, legal documents agreed subject to approval of execution versions and conditional on Leeds raising a minimum of $400m in total commitments.

Investment Case Study

DCU Campus Development Programme

DCU is currently experiencing a period of rapid growth and expansion with student numbers set to increase by over 30% in 2016/2017 as it merges with St Patrick’s College, Mater Dei Institute of Education and Church of Ireland College of Education in Drumcondra.

To facilitate this expansion, DCU has commenced a €230m development plan aimed at physically transforming the student experience at the university on a phased basis over the next 2-3 years. The plan includes projects such as an R&D focused nanobioanalytical building, an innovation campus focused on commercialisation, a sports campus, acquisition of nearby colleges and new student accommodation.

The ISIF has committed long-term funding of €54m to assist the university ultimately deliver over 3,200 student accommodation units across the university campuses.

ISIF funding provides long-term debt with a maturity profile not currently available within the Irish banking market. The funding is underpinned by a robust commercial case involving several on-campus student accommodation blocks with long-term stable cash flows. Such funding will unlock parallel long-term funding of €76m from the EIB that supports DCU’s wider investment programme and ensures one of Ireland’s leading universities has the capital funding it requires to deliver upon its ambitions in research, teaching and learning into the future.

Economic Impact

The ISIF seeks to allocate the majority of its capital to priority sectors and investments where the highest economic impacts are likely, while also ensuring that all investments satisfy its commercial return objectives.

Over the longer term, 80% of the ISIF’s capital is targeted at investments where the highest and most sustainable economic impacts are likely. The remaining 20% is targeted at investments which will provide short-term economic gains, act as an accelerator of market activity or address instances of market dysfunction. At end-2015 62% of committed capital was in high economic impact transactions, with 38% in lower economic impact transactions.

ISIF Economic Impact 2015


Almost 18,000 jobs are supported directly and indirectly by the ISIF's investments.


108 companies generated turnover of €1,229m for the financial year 2015 with 29% of their turnover generated from exports.

€505m in wages/salaries

€505m was earned in wages/ salaries in 2015 by employees of these companies.


Gross Value Added from ISIF investments of €538m.

Performance and Portfolio

Performance is reported on two levels, (i) the Discretionary Portfolio - the investment of which is the responsibility of the NTMA and (ii) the Directed Portfolio – the public policy investments made at the direction of the Minister for Finance.

Discretionary Portfolio

The Discretionary Portfolio earned a return of +1.1% in 2015 and has generated a return of +1.4% per annum since inception on 22 December 2014.

The Discretionary Portfolio’s value increased by €688m to €7.859bn in 2015. This increase includes:

  • €280m from the Directed Portfolio following payment of a preference share dividend from AIB.
  • €335m contributed by the Exchequer to a new Connectivity Fund within the Discretionary Portfolio, following the sale of the State’s shareholding in Aer Lingus. The Connectivity Fund has been earmarked for investment in projects that enhance Ireland’s physical, virtual or energy connectivity.

During 2015 the ISIF implemented a capital preservation strategy which involved limiting its downside equity exposure – via the purchase of options and a reduced exposure to equities. The aim of the capital preservation strategy is to ensure that capital is available for investment in Ireland as required, while both significantly dampening risk and continuing to hold assets that will generate positive performance in growing equity and real asset markets.

In late 2015 the NTMA commenced moving towards a medium-term Global Portfolio Transition Strategy which will form the basis for transitioning the ISIF over a period of years from a largely global portfolio into an Irish portfolio, as investment opportunities in Ireland are executed and drawn down. The overall objective is to ensure that cash is available as required for Irish investments over an indicative period of four to five years, while making a significant contribution towards the ISIF’s investment return objective.

The ISIF’s global custodian, BNY Mellon, provides custody and accounting functions to the NTMA. BNY Mellon is responsible for transaction settlement and the holding of the ISIF’s directly owned public markets assets.

Discretionary Portfolio Asset Allocation at 31 December 2015
Asset Allocation €m

Irish Portfolio

Global Transition

Fund Weight

Quoted Equity 53 1,015 1,068 13.6
Bonds & Debt 422 1,181 1,602 20.4
Cash & Cash Investments 3,594 3,594 45.7
Equity Options 11 11 0.1
Total Financial Assets 422 4,785 5,207 66.3
Private Equity 381 4 385 4.9
Real Estate 18 218 236 3.0
Commodities 30 265 295 3.8
Infrastructure 125 241 366 4.7
Absolute Return Funds 302 302 3.8
Total Alternative Assets 554 1,030 1,584 20.2
Total Discretionary Portfolio 1,028 6,831 7,859 100.0

Figures may not total due to rounding.

Directed Portfolio

The figures in this section relate to investments held by the ISIF only and do not include public policy investments in Irish financial institutions made by the Minister for Finance through the Exchequer.

During the financial crisis, a total of €20.7bn was invested in AIB and Bank of Ireland at the direction of the Minister for Finance for public policy reasons. These assets transferred to the ISIF on the establishment of the Fund.

At end-2015 the Directed Portfolio comprised:

  1. Ordinary shares in Allied Irish Banks valued at €4.51 per share.
  2. Ordinary shares in Bank of Ireland valued at the market price of €0.34 per share.
  3. €240m in cash, committed to lending to the Strategic Banking Corporation of Ireland.

At end-2015 the ISIF’s shareholdings in AIB and Bank of Ireland were 99.9% and 13.9% respectively. As the AIB shareholding leaves a free float of only 0.1%, the NTMA engaged an external corporate finance firm to provide an independent fair market valuation as of 31 December 2015 for the purposes of valuing this investment in line with generally accepted accounting principles.

The Directed Portfolio had a valuation of €14.0bn at end-2015. €1.6bn of proceeds from the sale and redemption of the Bank of Ireland preference share holding in December 2013 was remitted to the Exchequer under Direction from the Minister for Finance in March 2015 and used to part-finance the repayment of the more expensive portion of Ireland’s IMF loan. In December 2015 AIB redeemed and converted the preference shares, resulting in the receipt of €1.9bn in cash and 155bn ordinary shares. Under Direction from the Minister for Finance, €0.2bn of this cash was used to redeem the Minister’s outstanding EBS Promissory Notes and the remainder was remitted to the Exchequer.

The Directed Portfolio’s return in 2015 was 18.6%.

Directed Portfolio
Original Investment

Cash received to
End 2015 value

Total (Income &
Preference Shares 1.8 3.2 0 3.2
Ordinary Shares 2.9 1.0 1.5 2.5
Bank of Ireland 4.7 4.2 1.5 5.7
Preference Shares 3.5 2.2 0 2.2
Ordinary Shares 8.7 0 12.2 12.2
Capital Contribution 3.8 0 0 0
AIB 16.0 2.2 12.2 14.4
Total Bank Investments 20.7 6.4 13.8 20.2
Cash 0.2
Total Directed Portfolio 14.0

Figures may not total due to rounding.