National Pensions Fund at €24.4bn

THE National Pensions Reserve Fund, now being part used in the bank bailout, stood at €24.4 billion at the end of December 2010.

It is split in two, with the €14.9bn currently under the discretion of the agency. That excludes investments in AIB and Bank of Ireland, which are covered by a directed portfolio worth €9.5bn.

The €14.9bn part of the fund earned a return of 11.1% due to a strong performance on equity markets, with emerging markets performing especially well, the agency said.

In contrast to the €9.5bn made up of preference share investments of €5.3bn and ordinary shares of €4.1bn its return was a negative — 7.9% last year, reflecting the serious under-performance of the taxpayers’ investment in the country’s two main banks, which Finance Minister Brian Lenihan said at one point would return a profit on the state’s investment.

Under the direction of the IMF and the ECB the NTMA said the Pension Reserve Fund is to provide up to €10bn of the state’s €17.5bn contribution to the €85bn EU/IMF programme. After this, the value of its assets will be about €4.9bn, which would include funding for the proposed investments in infrastructure and water metering services.

The NTMA which also oversees the operation of the National Asset Management Agency said, over the 12-month period, NAMA made €2bn in asset sales to pay down debt either to the agency or to the relevant banks.

On the bigger question of NAMA Mark II, floated in an interview on Wednesday in a Dublin newspaper by the Financial Regulator, the NTMA’s head of banking, Michael Torpey, played down that suggestion. He said to call the new agency, needed to sell on unwanted assets as the banks are slimmed down to domestic operations, NAMA Mark II was a “misnomer”.

What is crucial is the assets due to be sold off by the banks which could involve the sale of up to €50bn of assets, are sold on without incurring losses to the state. “The key is to ensure that you create the entity in the first place.”

That will have to be done quickly, but the sale of assets may take time, given the negativity surrounding bank assets globally at this time, he said.

Picture: Brian Lenihan: Return a profit on investments.