The Ireland Strategic Investment Fund (ISIF) has announced it is one of the backers of Netherlands-based Waterland’s new EUR4 billion of pan European funds with its new ninth fund - Waterland Private Equity Fund IX - set to increase its investments in Irish businesses over the next two to three years.
WPEF IX aligns neatly with ISIF’s increasing shift towards scaling up startups. The fund expects to finance organic and acquisitive growth in medium-sized companies in fragmented growth markets in Europe, in line with Waterland’s buy-and-build investment strategy. Waterland opened an office in Ireland in 2019 and has made several investments, including fire protection firm Writech Group, nursing homes operator Silver Stream Healthcare, and cable installation business MTM Engineering.
Nick Ashmore, director of ISIF since February 2021, said, "Our partnership with Waterland is a further step in providing Irish businesses with attractive new ways to source the capital they need to grow and with valuable access to Waterland's Irish and international expertise and network. This investment is another example of ISIF’s mandate of investing for a commercial return while supporting economic activity and employment in Ireland and we’re delighted to team up with Waterland."
ISIF manages a diverse portfolio worth around EUR9 billion – just under 2% of Ireland’s GDP – that ranges from real estate to tech start-ups. Investments by ISIF in 2022 included EUR25 million in the construction of 1,900 new homes, a EUR50 million commitment to a new Hotel Investment Fund, and a EUR90 million fund for Irish start-ups. It also launched a EUR500 million investment program for Ireland’s five regional cities, which includes helping scale up start-ups to enable them to reach the EUR1 billion “unicorn” valuation within five years and the delivery of 25,000 new homes by 2030. In November, it announced a program to invest a minimum of EUR50 million over the next two years through investment firms founded or majority owned by women.
ISIF’s performance has been steady, but not outstanding. In H1 2022, ISIF made an investment return of -5.8%, which outperformed global equity indices – by way of comparison, the S&P Global 1200 fell 20% over the period. However, the decline meant the investment gains made in H2 2021 were wiped out. ISIF’s total investment return since inception in 2014 totalled EUR2.1 billion by end-June, representing an annualised return of 3.4% per annum.
In 2022, ISIF invested around EUR500 million in 12 transactions, the biggest portion of which was a EUR200 million debt facility for flag carrier Aer Lingus to support connectivity and recovery. Altogether, the Irish SWF has invested more than EUR6 billion into the national economy, generating around EUR10 billion in additional co-investments.
Like other SWFs, ISIF is looking to a post-pandemic recovery with a focus on new technology and energy transition. The fund has a EUR1 billion five-year program of investment in Ireland’s climate action projects, representing a major impact investment in the Irish economy as it transitions to net zero. ISIF has set out four priorities for investment: energy efficiency, energy storage, renewables, and improved resource efficiency, including investment in forestry. By end-September 2022, it had invested EUR285 million in climate action.
In Global SWF’s 2022 Governance, Sustainability and Resilience ranking, ISIF came joint first with a score of 96%, alongside Canadian public pension funds CPP, CDPQ and BCI, Dutch fund PGGM, Singapore’s Temasek, Australia’s Future Fund, and New Zealand’s NZ Super.
