Case Study—The Ireland Strategic Investment Fund: A Strategic Investor in a High-Performance Economy
FIGURE 10.4
ISIF investment decision process Investment team • Analyzes investment opportunity • Produces economic impact scorecard and submits to economic impact implementation group • Produces investment memo and submits to investment committee
Economic impact implementation group • Completes economic impact scorecard and reviews economic impact section of investment memo Portfolio management committee • Makes investment recommendations • Provides oversight of investments NTMA risk team
NTMA investment committee • Approves investment decision • NTMA Board approval needed for deals greater than €150 million • Delegates legal, commercial, and financial due diligence to the director of ISIF and the NTMA chief legal officer
• Produces risk report on each investment proposal • Submits to NTMA risk committee Source: Interviews with management. Note: ISIF = Ireland Strategic Investment Fund; NTMA = National Treasury Management Agency.
NTMA’s governance seeks to ensure that investment decisions are independent from political influence (figure 10.4). Under the NTMA Code of Conduct for Members of the NTMA and its Committees, Investment Committee members are required to act objectively and independently (NTMA 2018b). The quorum for a meeting is three, including one board representative. Decisions are made on a majority basis (one vote per member). The chairperson of the committee (appointed by NTMA) has the casting vote. The board does not decide on individual investments, except for investments exceeding €150 million, which will be referred to the board for approval if they have first been approved by the Investment Committee. The NTMA Code of Conduct also generally disciplines the conduct of NTMA and its board, committee members, and employees.
STAFFING AND RECRUITMENT All ISIF staff are employed by the NTMA on individual contracts. The NTMA remuneration model is based on confidential, individually negotiated employment contracts, with competitive, market-aligned remuneration. The typical remuneration package comprises a fixed base salary, provision for discretionary performance-related pay when considered appropriate for the role or employee in question, and career average defined benefit pension. Employee turnover at ISIF has been limited. The annual turnover as of December 31, 2018, for ISIF was 14 percent. ISIF staff come from a diverse, generally private sector financial background, including private equity fund management, banking, energy, consulting, infrastructure, investment banking, corporate finance, and accountancy. ISIF encourages relevant team members to obtain the chartered financial analyst qualifications.
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