Michael McGrath (Cork South Central, Fianna Fail)
Link to this: Individually | In context

Question 73: To ask the Minister for Finance the degree of liquidity attaching to the discretionary portfolio held within the National Pensions Reserve Fund; if he will confirm how quickly the funds could be accessed; and if he will make a statement on the matter. [36896/11]

Michael Noonan (Limerick City, Fine Gael)
Link to this: Individually | In context

For the Deputy's information, the Commission valued the NPRF at €14.9 billion at 30 September 2011. The directed portfolio (the part of the Fund which is managed by the Commission on foot of directions from the Minister for Finance) was valued at €9.6 billion, while the discretionary portfolio, the investment of which remains the Commission's responsibility, was valued at €5.3 billion at 30 September 2011. The National Pensions Reserve Fund (NPRF) Commission publishes a performance and portfolio update quarterly on the NPRF website www.nprf.ie. The value and asset allocation of the discretionary portfolio as at 30 September 2011 as published on the website is as follows:

I am informed by the NTMA as Manager of the Fund that all the discretionary portfolio investments in quoted equity, financial assets and the equity market put options can be accessed relatively quickly - generally within a period of between one and three weeks. As regards the investments in alternative assets –

(i) the investments in commodities are held through investment funds which can be cashed in at any time,

(ii) the absolute return investments are held through investment funds which can generally be sold within a month,

(iii) the investments in infrastructure are listed securities which can generally be accessed within a period of between one and three weeks, and

(iv) the investments in forestry, private equity and property, with a total value of €1,428 million, are illiquid.

In addition, I understand that the NPRF has (i) outstanding commitments to invest further monies in private equity, property and infrastructure funds totalling some €950 million, of which €420 million is to Innovation Fund Ireland, the Irish Infrastructure Trust and other Irish venture capital funds, and (ii) contracted sales of some €160 million that are expected to close in the fourth quarter of 2011. The effect of these two factors is to increase the amount of illiquid assets by approximately €790 million. Drawdown of committed monies on a phased basis is a normal feature of investment in such funds. Other than in the case of Irish-based investments, these outstanding commitments were all made in the period 2005 to 2008.