Ireland Strategic Investment Fund

November 2014

Key Components of Investment Mandate

1. Double Bottom Line – Investment Returns and Economic Impact

2. Co-Investment Opportunities in a recovering economy

2

National Treasury Management Agency (NTMA)

• NTMA is a commercial organisation providing a range of specialist financial and risk management services to the Government of Ireland

3

NTMA

Funding & Debt

Management (FDM)

NewERA

Strategic Banking

Corporation Ireland (SBCI)

Ireland Strategic

Investment Fund (ISIF) /

NPRF

National Asset

Management Agency (NAMA)

National Development

Finance Agency (NDFA)

State Claims Agency (SCA)

• Funding & Debt Management: Manages State borrowings in sovereign bond markets

• NewERA: Co-ordinates State’s ownership of certain commercial semi-state firms

• Strategic Banking Corporation of Ireland (SBCI): Sources low cost long term finance from multilateral finance providers and State resources and channels this to Irish SME borrowers

• Ireland Strategic Investment Fund (ex NPRF): State pension fund, transitioning to focus on strategic investment

• NAMA: Manages large real estate assets and development loans acquired from Irish banks

• NDFA: Manages public private partnership projects, provision of financial advice on large capital expenditure by the State

• SCA: Manages the State’s personal injury and property damage claims

2009

Nov

2010

Sept

2011

June

2013

2014

• Initial recapitalisation in €10.7bn from NPRF

• Banking system in deep trouble

• Flight of deposits

• EU/IMF €85bn Programme of Financial Support €67.5bn from EU, ECB and IMF;

• €17.5bn from Ireland, of which €10bn from NPRF

• €50bn for Sovereign, €35bn for Banks

Government announcement that remainder of NPRF assets to be invested “Strategically”

Announced intention to form the Ireland Strategic Investment Fund (ISIF)

New Fund New Mandate

€7BN ISIF formed by the passing of the NTMA Amendment Act, 2014

NPRF: Journey Post Crisis

The ISIF Mandate: Double Bottom Line

• Sovereign Development Fund: Investing on a commercial basis

To support economic activity, and

Employment in Ireland

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20% Lower Impact

80% High Impact

Deadweight

•Benefits would have been achieved without ISIF investment

Displacement

•Benefits achieved at expense of other domestic players

Additionality

•Benefits would not have been achieved without the ISIF investment

Fund Allocation Economic Impact Framework - Key Concepts

The ISIF Mandate: Co-Investment Opportunities

• Co-Investment is a key element of ISIF strategy

• ISIF can be attractive partner for international investors Commercial investor

Flexible investment time horizon (can be very long or short term)

Flexibility to invest across the capital structure

Sovereign fund

Independent governance

Cornerstone investor, lead role in structuring / implementation / monitoring

Link to key players in Irish business and financial system

Govt Depts, IDA, Enterprise Ireland, SBCI, NewEra & commercial semi-states, NDFA and PPP projects, NAMA, pillar banks, private equity / venture capital community etc

6

Illustrative Investments / Sectors of Interest

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Infrastructure

• Irish Water:

• Multi billion Euro capex in regulated utility

• Transportation

• Ferry ports

• Airports

• Broadband

• Data centres

Food / AgriSector

• Farming:

• Production expansion post dairy quota system reform

• Food processing:

• Improve branding and position in value chain

• Fisheries:

• Aquamarine

• Further processing

• Forestry:

• Improve exploitation of Irish forests very strong growing profile

Energy Sector

• Sustainable cost efficient energy

• Car fuel economy and emission improvement technologies

• Wind Power

Education

• Improvement of course content and delivery from primary through to third level

• Improved efficiency of education provision

Illustrative Investments / Sectors of Interest

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Real Estate

• Housing

• Urban Renewal

• Tourism related assets

• Advance factories and facilities for industry

Technology / Venture

• Venture Funds:

• Enhance growth and development of strong tech sector in Ireland

SME Sector

• Equity:

• China Ireland Technology Fund

• Mezzanine

• Credit

• Term Loans

• Working Capital

Tourism – ISIF Role / Interest in the Sector

• Tourism covers a broad range of sectors: Infrastructure

Airports

Roads

Ferries

Real estate

Hotels

Holiday homes

Entertainment attractions

Theme parks

Sporting facilities

Enabling technologies

Reservation and holiday / travel booking systems

9

Tourism – ISIF Role / Interest in the Sector

• ISIF is open to considering tourism sector related investments

• Key issues for consideration: Projects MUST be COMMERCIAL (no soft money)

Tourism projects tend to be relatively small with more localised benefits

Avoid displacement

Avoid deadweight

• Currently we are looking at a number of opportunities in the sector

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Key Components of Investment Mandate

1. Double Bottom Line – Investment Returns and Economic Impact

2. Co-Investment Opportunities in a recovering economy

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For further information, please contact : Michael Lee michael.lee@ntma.ie + 353 1 238 4937