Pension fund looks at new Irish firms

The National Pension Reserve Fund (NPRF) plans to invest €60 million in Irish venture capital funds this year.

This marks the first time the €20.75 billion fund has invested in early-stage companies in Ireland. Last year, it invested about €60 million in venture capital (VC) funds in the US.

These moves are part of a planned €2 billion spend on private equity investments by the end of 2009. The fund plans to spend about 8 per cent of its assets in private equity deals, backing corporate buyouts.

A spokesman for the fund confirmed that it had already agreed to invest €15 million in a venture capital fund being raised by Delta Partners. This will invest mostly in technology companies, and is the third fund that Delta will have managed.

He said investments would be made in a "small number" of other Irish VC funds by the end of this year. Most venture capital groups in Ireland are involved in raising new funds at present.

"Venture capital is part of our private equity programme, and the fund is keen to invest in Ireland in circumstances where it can generate a commercial return," the fund said.

"Given the high level of due diligence necessary in this area, there are advantages to investing in your local market where the funds and the issues involved are familiar."

This week, it emerged that €62.6 million was invested by VC groups here in 31 Irish companies in the first half of this year.

This compared with €83.7 million spread across 19 companies in the same period of 2006.

The NPRF was set up in 2001 by then finance minister Charlie McCreevy to help fund Ireland's social welfare and public service pension costs from 2025 onwards.

It yesterday appointed Hermes Equity Ownership Services to represent its global equity interests. Hermes will execute proxy votes for the fund and engage with companies on environmental, social and governance issues across its €15.9 billion worldwide equity portfolio.