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| Strategic Investment Funds
A key element of ISIF’s investment strategy is to attract co-investment from third-party investors. Co-investment is viewed as particularly important because it leverages ISIF’s finite resources to significantly increase the quantum of economic impact in Ireland that can be achieved in the investment program. ISIF targets investments that fall under three strategic drivers: 1. Enabling Ireland. Enabling sectors are those that create the foundations for sound economic growth and fix bottlenecks; examples include housing, of which Ireland has experienced a severe shortage; water; energy; and other infrastructure. 2. Growing Ireland. Growing sectors are those presenting significant expansion opportunities for the Irish economy, such as food, agriculture, and export. 3. Leading Edge Ireland. These drivers include new technologies and sectors, such as information technology and life sciences, in which Ireland has established a strong representation or reputation. Infrastructure, under the broad definition adopted in this book, represents just over a quarter of ISIF’s capital commitments. ISIF defines i nfrastructure as being its commitment to the airport and port sectors and infrastructure funds (representing about 10 percent of ISIF’s capital commitments as of December 31, 2018). Adding commitments to the water (about 11 percent of ISIF’s total capital commitments) and energy (about 6 percent of ISIF’s total capital commitments) sectors, broad exposure to infrastructure stood at about 27 percent of ISIF’s capital commitments as of December 31, 2018 (figure 10.2). Real estate, of which housing represents the largest portion, absorbs another 20 percent of committed capital. It includes the financing, development, and ownership of new residential housing stock.
FIGURE 10.2
ISIF’s capital committed to Irish investments by sector, as of December 31, 2018 Innovation, 2% Other, 5% SMEs, 20%
Food and agriculture, 5% Direct equity, 6%
Energy, 5%
Infrastructure, 10%
Real estate, 20%
Water, 12%
Venture capital, 16% Source: ISIF 2018b. Note: Figure shows sector shares of ISIF’s committed capital in the Irish Portfolio as of December 31, 2018, which totaled €4.1 billion. ISIF = Ireland Strategic Investment Fund; SMEs = small and medium enterprises.
