Pension fund to market private-equity stakes

The National Pensions Reserve Fund (NPRF) is set to market about €600m in private-equity funds as it redirects investments to benefit the economy, three sources have said.

The pension fund has selected UBS AG to shop the portfolio, said the three people, who asked not to be identified.

The portfolio to be marketed doesn’t include stakes in Irish funds, given the pension’s current focus on domestic strategies designed to help boost the economy, said two of the people.

In June, the Government proposed legislation to transition the NPRF to a newly-created Ireland Strategic Investment Fund (ISIF), which will refocus the fund’s mandate.

In line with these changes, NPRF will transition its global portfolio of equities, bonds, and alternative assets into the ISIF over several years, said David Clerkin, a spokesman for NPRF, noting that this includes its global private-equity investments, which will have to be realised through distributions or sold.

He declined to comment on the proposed secondary sale, as did Megan Stinson, a spokeswoman in New York for Zurich-based UBS.

National Pensions has been disposing of private- equity stakes gradually also to improve liquidity in its discretionary portfolio, after it provided €10bn to the bank bailout in 2010 that was led by the EU and the IMF.

Last year, National Pensions sold €148m of investments in seven private-equity funds, according to its annual report.

National Pensions was formed in 2001 to pay for the costs of social welfare and public-service pensions from 2025 to 2055.

In 2009, commissioners split the fund’s assets into two portfolios. The discretionary portfolio, valued at €6.4bn at the end of June, holds investment assets including private equity.

Private equity took up 12% of the portfolio, above the 10% target.

The other pool, called the directed portfolio, makes investments at the discretion of the minister for finance.

National Pensions has used that portfolio to invest €20.7bn since the 2009 financial crisis to help re-capitalise Bank of Ireland and AIB.