Aer Lingus among Irish sovereign wealth fund’s COVID-19 investments

DUBLIN (Reuters) – Ireland’s sovereign wealth fund’s domestic investments in 2020 were almost exclusively in businesses impacted by the COVID-19 pandemic, including 150 million euros ($180 million) to help stabilise IAG’s Irish airline Aer Lingus.

The Ireland Strategic Investment Fund (ISIF) was established in 2014 from the cash left in the country’s pension reserve fund following the financial crash to invest on a commercial basis in supporting economic activity and employment in Ireland.

ISIF was mandated last May to invest up to 2 billion euros directly into larger firms hit by the pandemic via equity, debt and hybrid instruments and it said on Monday that 90% of the 430 million euros invested in Ireland in 2020 was for this purpose.

Most of the direct and indirect investments were so-called “stabilisation investments”, including Aer Lingus, a 40 million euro commitment to the Dublin Airport Authority and 17 million euros to privately-owned lender Finance Ireland.

ISIF is currently working on a pipeline of over 600 million euros in potential investments, with over two-thirds of those skewed towards “recovery investments”, it added.

The total fund 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%.

(Reporting by Padraic Halpin. Editing by Mark Potter)