The artist formerly known as the National Pensions Reserve Fund
Congratulations to the Irish Times this morning for drawing the public’s attention to the Irish Strategic Investment Fund (ISIF), formerly known as the National Pensions Reserve Fund. The IT quite correctly asks why ISIF – whose mandate is “to invest on a commercial basis to support economic activity and employment in Ireland” – is investing in a management buyout of Tullamore-based Carroll Cuisine and in the buyout by BlueBay Ireland of Denis O’Brien’s coffee and muffin chain BBs? As the Times says, “….all deals that probably would have happened anyway.”
Another fine mess
Yesterday ISIF announced it had invested a further €50 million of taxpayers’ money into Malin, a biotech investment vehicle set up by former Elan executives. The company raised €330 million, some €50 million of it – taxpayers’ money – from the ISIF. A co-investor is Woodford Investment Management –and we’ll return to them in a moment.
€50m for 40 jobs a year – madness
Malin says that under the terms of the ISIF investment in Malin, the company has committed to invest €150m in Irish life sciences companies, or life sciences companies with significant operations in Ireland (so that’s most likely to be large US corporations) and (it’s not clear if it’s either/or) they will invest in at least 10 Irish life sciences companies, or life sciences companies with significant operations in Ireland, that will employ at least 200 people in Ireland on a full-time basis over the next 5 years. So that could be 40 jobs a year in an extremely well-funded sector internationally while smaller businesses, who could supply hundreds of times that number of jobs are starved of funds that could be supplied by ISIF. But pharma is sexy, SME’s are not.
€1 billion invested in tobacco shares
But what of the UK based Woodford Investment Management? According to the company’s website 3 of their top 10 investments in the CF Woodford Equity Income Fund Portfolio are Imperial Tobacco, British American Tobacco and Reynolds American. These three shares make up about 15% of the €7 billion portfolio. That’s a lot of money tied up in coffin nails.
No hope of getting us out of AIB either
So while one arm of the State is co-investing with a company that is a major investor in the tobacco industry other arms of the State, the Dept. of Health and the HSE, are doing their best to cut contracts with companies who work for tobacco companies. And Woodford won’t be bailing us out of our bank shares either. Woodford does not currently hold any bank shares and does not believe it is time to think about piling back in, according to a recent interview with Neil Woodford, the Woodford boss.
Pharma awash with cash – SME’s gasping for breath
But to prove the point that there’s no shortage of money for smaller and early stage pharma companies Woodford is currently raising €275 million to invest in this sector. The Irish Times article queried why we need the ISIF. Minister Reilly may well be posing the same question when he reads this.