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(Adds detail on Aer Lingus loan, adds quotes)
DUBLIN, Feb 8 (Reuters) - Ireland's sovereign wealth fund's
domestic investments in 2020 were almost exclusively in
businesses impacted by the COVID-19 pandemic, including a 150
million euro ($180 million) loan to IAG's Irish airline
Aer Lingus.
The Ireland Strategic Investment Fund (ISIF) was established
in 2014 to invest in supporting economic activity and employment
in Ireland. It was mandated last May to invest up to 2 billion
euros directly in larger firms hit by the pandemic via equity,
debt and hybrid instruments.
It said on Monday that 90% of the 430 million euros invested
in Ireland in 2020 was for this purpose, mostly so-called
"stabilisation investments", including the three-year Aer Lingus
loan and 40 million euros committed to the Dublin Airport
Authority.
"It is a commercial investment, it's not state aid," Conor
O'Kelly, the chief executive of the National Treasury Management
Agency, which oversees ISIF, told a news conference in relation
to the Aer Lingus loan.
"Probably the reason that Aer Lingus would want liquidity
from us is it's possible that the banking system is going to
find itself already over-exposed to the sector."
A spokesman for Aer Lingus did not immediately comment on
the loan.
ISIF is currently working on a pipeline of over 600 million
euros in potential investments, with more than two-thirds of
those skewed towards "recovery investments" in the transport,
tourism and hospitality sectors.
O'Kelly said ISIF had invested equity in half the 20
pandemic-related transactions and he hoped it would not have to
invest the full 2 billion euros as the economy recovers later
this year.
Finance Minister Paschal Donohoe added he was confident the
state would get its money back from the investments.
"We want to get back out of these investments ultimately in
two or three years' time. This is a temporary phenomena. We're
backing great companies who were great companies before the
pandemic, they just help to get through," O'Kelly said.
ISIF made investment returns of 6.2% in 2020, an increase of
over 500 million euros that was driven primarily by its exposure
to global funds committed to investing in Ireland.
That brought ISIF's total gains since inception in 2015 to
1.5 billion euros, an annual return of 3.1%.
($1 = 0.8313 euros)
(Reporting by Padraic Halpin. Editing by Mark Potter)
