Norway’s $1tn sovereign fund almost doubles its exposure to Ireland

World’s biggest sovereign wealth fund acquired $136 million stake in AIB last year

AIB chief executive Bernard Byrne rings the bell at the Irish Stock Exchange in June 2017 with ISE chief executive Deirdre Somers and AIB chairman Richard Pym, following the bank’s IPO. Norway’s sovereign wealth fund was an investor in the share sale. Photograph: Dara Mac Dónaill

AIB chief executive Bernard Byrne rings the bell at the Irish Stock Exchange in June 2017 with ISE chief executive Deirdre Somers and AIB chairman Richard Pym, following the bank’s IPO. Norway’s sovereign wealth fund was an investor in the share sale. Photograph: Dara Mac Dónaill

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Norway’s $1 trillion sovereign wealth fund increased its exposure to Ireland in 2017, almost doubling its investment in Irish companies and government debt, and taking a stake in AIB.

The Government Pension Fund Global , a vehicle for saving for future generations in Norway, held $1.7 billion in Irish debt and equity assets in 2017, up 78 per cent on a year earlier.

Almost $800 million was invested in 16 Irish company equities, up from $640 million in 2016. On the fixed-income side, it had spent $917 million on seven investments in 2017, up from $313 million on six investments a year earlier.

The fund has a $694 billion equity portfolio, with the Irish holdings representing 0.1 per cent of this figure at the end of last year.

Its Irish portfolio included a $136 million stake in AIB, which it acquired as part of the bank’s share sale in 2017 – giving it a 0.76 per cent stake.

The fund also had a $68 million or 0.74 per cent stake in Bank of Ireland, a $2 million holding in Permanent TSB, and a $4 million stake in insurer FBD.

Kerry Group

Its biggest holding was in Kerry Group at $236 million, while its other investments included Kingspan at $136 million, Glanbia at $87 million, Greencoat Renewables at $7 million, and a stake in Independent News & Media worth $500,000.

The fund sold out of Kenmare Resources, Nasdaq-listed Nexvet, and Fyffes during the year.

On the debt side it invested in Aercap debt ($145 million), ESB ($31 million), Kerry Group and Ryanair. It also has a substantial $658 million holding in Irish government bonds, having first invested in them in 1998.

The fund, which has almost two-thirds of its property portfolio invested in London, Paris and New York, has no direct holding of Irish property. However, it did have a $1.1 million holding in property investment company Green Reit.

The Norwegian fund has a current market value of 8,201 billion kroner ($1 trillion). It returned 13.7 per cent in 2017, and has achieved an average annual return of 6.1 per cent since it was established in 1998.

Its Irish equity holdings peaked in 2013 when it had $1.6 billion in its equity portfolio in 22 Irish companies, and in 2008 for its debt holdings, when it had $4 billion invested here, including $382 million in Anglo Irish Bank.

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