Santiago Principles Self-Assessment

Ireland Strategic Investment Fund

Fund Details Fund Website Search Assessments PDF version
  • Pillar 1: Legal
  • Pillar 2: Institutional
  • Pillar 3: Investment
Principle 1

1. The legal framework for the SWF should be sound and support its effective operation and the achievement of its stated objective(s).

1.1. The legal framework for the SWF should ensure legal soundness of the SWF and its transactions.

1.2. The key features of the SWF’s legal basis and structure, as well as the legal relationship between the SWF and other state bodies, should be publicly disclosed.

The National Treasury Management Agency (NTMA or Agency) is a Government agency with a commercial remit. The Ireland Strategic Investment Fund (ISIF or the Fund) was provided under the terms of Part 6 of the National Treasury Management Agency (Amendment) Act 2014 (2014 Act), which was commenced on 22 December 2014.

As set out in section 38(3) of the2014 Act, the Minister for Finance is the owner of the Fund. Section 41(1) of the 2014 Act provides that the NTMA is the controller and manager of the ISIF.  Section 40(1) of the 2014 Act provides that the Agency shall determine an investment strategy for the assets of the Fund, whilst section 41(5) of the 2014 Act provides that the Investment Committee of the Agency shall oversee the implementation of the investment strategy.

Further details on the NTMA governance structure are available at

Principle 6

6. The governance framework for the SWF should be sound and establish a clear and effective division of roles and responsibilities in order to facilitate accountability and operational independence in the management of the SWF to pursue its objectives.

The NTMA is a Government agency with a commercial remit. Its mission is to manage public assets and liabilities commercially and prudently. The NTMA was the manager of the National Pensions Reserve Fund and is now the manager and controller of the Ireland Strategic Investment Fund.  Since its establishment in 1990, the NTMA has evolved from a single function agency managing the National Debt to a manager of a complex portfolio of public assets and liabilities.

The Agency Board is responsible for setting the ISIF strategy.

The Agency’s Investment Committee is responsible for making decisions about the acquisition and disposal of assets by the Fund in accordance with the investment strategy.

The ISIF Business Unit is the team within the NTMA charged with the day-to-day management of the ISIF.

Principle 18

18. The SWF’s investment policy should be clear and consistent with its defined objectives, risk tolerance, and investment strategy, as set by the owner or the governing body(ies), and be based on sound portfolio management principles.

18.1. The investment policy should guide the SWF’s financial risk exposures and the possible use of leverage.

18.2. The investment policy should address the extent to which internal and/or external investment managers are used, the range of their activities and authority, and the process by which they are selected and their performance monitored.

18.3. A description of the investment policy of the SWF should be publicly disclosed.

The NTMA has identified a range of 10 provisional “investment buckets” using the Economic Impact Framework sector guidelines together with a general analysis of the Irish economy and Ireland’s broad investment needs. The “bucket” sizes and broad allocation represent the best estimate at where the NTMA believes the Fund can best invest in a manner that is in line with its mandate objectives; to achieve a target portfolio return of 4% and also to achieve an allocation of 80% of the Fund to high economic impact sectors.

In the case of the ISIF, the investment opportunity set in Ireland is not fully visible, is illiquid and may change over time. It is therefore not possible or appropriate to create a target asset allocation portfolio as a particular percentage target allocation may not be investable or desirable. The illustrative portfolio is based on initial estimates of investment gaps across a range of sectors, and an ISIF participation rate of between 20% to 40% of suitable investment opportunities. The most important point is that the bucket sizes (as outlined in the strategy document) are indicative and that they will inevitably change in light of the transaction opportunity [set] that materialises. Even where there is clear visibility around investments in a particular asset class or market segment, often there will be time delays between the commitment of capital to that investment and the actual investment. These issues have a significant effect on the choice of an appropriate investment strategy model and mean that a flexible approach to portfolio design and construction is required for the ISIF.

The Fund can absorb normal price volatility but has a low tolerance for significant valuation drawdowns or for significant permanent losses on underlying investments. The investment strategy for the ISIF includes the ability to aggregate risks across the portfolio so that the probability of experiencing large losses over, say, any 12-month period can be measured.

The resulting ISIF investment strategy is multi-dimensional; in other words, that the risks in the Fund’s portfolio will be viewed in multiple ways in order to evaluate how the portfolio is exposed to different economic and market risks and scenarios.

It is anticipated given current projections that the ISIF mix of externally and internally managed assets will be approximately 50%/50% with a possible variance of +/-10%.

The ISIF Investment Strategy was published in July 2015 and is available on the NTMA website: