No growth for Irish pension funds

THE value of Irish pension funds remained flat over the last three months, according to figures published yesterday.

Mercer Investment Consulting’s quarterly survey of pension funds found that the average fund had recorded zero growth in the third quarter and was ahead by just 5.3% in the first nine months of the year.

Mercer said it had been a difficult quarter for stock markets, with oil price rises hurting confidence and adverse currency movements diminishing returns for investors based in the euro area.

Eagle Star was top of Mercer’s 16-strong table over the quarter, adding 1.1%. Irish Life held the number two slot with a 0.7% increase, while Davy Stockbrokers’ Exempt Managed Fund propped up the table, recording a 1.5% fall-off in its value.

AIB Investment Managers’ Multi-manager Fund was the best performer over the first nine months of the year with a 7.3% increase, beating Irish Life, which saw a 6.8% rise, into second place.

KBC Asset Management lags the field in the year to date with a 2.1% increase. Davy, whose fund was ahead by 3.9% in the nine months to September, was second from bottom.

Mercer also said the strong performance of Dublin’s ISEQ index this year was mostly due to Elan.

The ISEQ had easily outperformed other markets with a 16.3% increase over the first nine months of the year, but it would be ahead by just 7% if the rise in Elan’s share price was stripped out, according to Mercer.

Elan’s share price has more than trebled from €5.46 to over €18 this year, reversing some of the losses suffered by investors when it fell from highs of over €65 in 2001 amid concerns over its accounting policy.

But Elan’s recent success will mean little for most Irish workers’ pensions, said Mercer partner Tom Geraghty, because most Irish pension fund managers had chosen not to invest in the stock.