BREAKFAST BRIEFING

IRELAND STRATEGIC INVESTMENT FUND (ISIF)

12th November 2015

The Embassy of Ireland, London

www.isif.ie

Agenda

1. What is the Ireland Strategic Investment Fund (ISIF)?

2. What have we done so far?

3. Co-Investment Partnerships

4. Update on Ireland’s Economy

5. ISIF’s Pipeline

6. Engaging with ISIF

National Treasury Management Agency (NTMA)

The NTMA provides a range of asset and liability management services to the Government of Ireland and is the controller and manager of the

Ireland Strategic Investment Fund

NTMA

Funding & Debt Management

(FDM)

Manages State Borrowings in

sovereign bond markets

NewERA

Co-ordinates State’s

ownership of certain

commercial semi-state

firms

National Development

Finance Agency (NDFA)

Manages public private partnership

projects, provision of

financial advice on large

capital expenditure by

the State

Ireland Strategic

Investment Fund (ISIF)

State pension fund,

transitioning to focus on strategic

investment on a commercial

basis

State Claims Agency (SCA)

Manages the State’s

personal injury and property

damage claims

National Asset Management

Agency (NAMA)**

Manages large real estate assets and

development loans acquired

from Irish banks

Strategic Banking

Corporation of Ireland

(SBCI)**

Sources low cost long term finance from multilateral

finance providers and

State resources and channels this to Irish

SME borrowers

** Denotes businesses with separate boards staffed by NTMA

Transition from NPRF to ISIF is Complete

Legislative process complete

• NTMA (Amendment) Act, 2014 commenced in December 2014

Governance process complete

• New NTMA Board appointed

• ISIF Investment Committee in place

Team of 35 in place

Actively engaging with market

• Market Engagement Events • Advisors/

Intermediaries/Financial Institutions

• Individual transaction engagement

High quality pipeline developed

• Over 330 opportunities considered

• 77 live engagements

Investment Strategy for ISIF published

(July 2015)

Fund Size and Structure

Directed

Portfolio

€13.5 billion

Discretionary

Portfolio

€7.5 billion

Total Fund Size

€21 billion

Note: Figures are preliminary as at 30 Sept 2015

Available for investment in

accordance with the ISIF’s

objectives

€2 billion committed

Public policy investments in AIB and Bank of Ireland

Investment Returns

A Unique and Challenging Mandate

“invest on a commercial basis to support economic activity and employment in Ireland”

Double Bottom Line

Investment Returns

And

Economic Impact

Economic Impact

High Economic Impact Investments

20% Lower Impact

80% High Impact Deadweight

•Benefits would have been achieved without ISIF investment

Displacement

•Benefits achieved at expense of other domestic players

Additionality

•Benefits would not have been achieved without the ISIF investment

Fund Allocation Economic Impact Framework - Key Concepts

Target 80% allocation to “High Economic Impact” investment opportunities

Illustrative Portfolio - 2020

ISIF Illustrative Allocation

Bucket Theme €m +/- range €m

1 Water 700 +/- 100

2 Infrastructure 850 +/- 150

3 Energy 800 +/- 100

4 SMEs 900 +/- 200

5 Food & Agriculture 500 +/- 50

6 Real Estate Based Businesses

1,000 +/- 200

7 Venture 500 +/-50

8 Direct Private Equity 400 +/-40

9 Innovation / Big Idea 1,000 +/-200

10 Other 750 +/-50

Total Fund Size 7,400

2x multiple 14,800

What have we done so far?

€2 billion committed

to date

Real Estate €450 million

Irish Water €450 million

Infrastructure €294 million

SME Equity €125 million

SME Credit €200 million

Food & Agri €30 million

Venture Funds €403 million

Direct Equity €67 million

Year to Date 2015

€613 million

deployed

Further

€145m approved

2015 Commitments €m

Malin 50

Frontline Ventures I 11

AMCS 6

Highland Europe Tech Growth Fund II

10

Irish Water 150

Activate Capital 325

Irish Software Co 11

Quadrant 50

Total 613

Co-Investment Partnerships

• Key element of ISIF’s strategy is to attract co-investment

• Co-investment acts as a validation of commerciality

• Aim is to leverage ISIF’s finite resources to significantly increase the quantum of economic impact

• For example as at 30 Sept 2015 the ISIF achieved a fund or project size multiple of 2.5 times the value of the ISIF commitments

• ISIF a cornerstone and minority investor in many sub-funds, projects or companies, with objective of attracting third party capital (co-investors) to invest alongside it

Commercial Investment Objectives

• Risk adjusted Expected Return

• Third party investors validate commerciality

• No “Soft Money”

Return and Commerciality

• Participate in all levels of capital structure: Equity, Mezzanine, Senior Debt etc. Debt and/or

Equity

• Long term horizons

• No restrictions on tenor

Tenor

• No set regulatory or return on capital requirements

• Ownership / Control not key driver

• Permanent / Patient Capital

• Seek new ways to play a role in the market

• Work with public and private sector parties to develop financing solutions

Flexibility

Innovative

Ireland’s Economy Recovering Strongly

• Recovery has continued in 2015

• Gross Government debt fell to 108% of GDP in 2014, down from 120%

• Ireland’s sovereign credit ratings on upward trend

• Ireland’s economy outperformed the euro area in 2014 and is expected to do so again in 2015/2016 (growth est. 6.2% 2015)

• Unemployment rate down to 9.3% in October 2015

• Ireland’s demographics are among the best in Europe – young and educated workforce

• Attractive long term investment potential

Economic and fiscal forecasts: SPU 2015

2013 2014 2015e 2016f 2017f

GDP (% change, volume) 1.4 5.2 6.2 4.3 3.5

GNP (% change, volume) 4.6 6.9 5.5 3.9 3.2

Domestic Demand (Contribution to GDP, p.p.) -1.2 4.2 4.3 2.9 2.0

Net Exports (Contribution to GDP, p.p.) 2.6 0.1 2.0 0.2 1.2

Current Account (% GDP) 3.1 3.6 6.9 6.2 5.4

General Government Debt (% GDP) 120.1 107.5 97.0 92.8 90.3

General Government Balance (% GDP^) -5.7 -3.9 -2.1 -1.2 -0.5

Inflation (HICP) 0.5 0.3 0.1 1.2 1.5

Unemployment rate (%) 13.1 11.3 9.5 8.3 7.7

Source: CSO; Department of Finance (Budget 2016)

Sectors of Interest

SME Sector

• Finance Solutions

• Equity • Mezzanine

• Credit

Venture

• Tech and life sciences sector

Direct Investment

• Equity, mezz and debt investment in companies for expansion

• National Champions • IPO cornerstone

Energy Sector

• Energy Generation

• Energy Efficiency • Grid, Network System

enhancements

Real Estate

• Housing

• Social Housing Investment • Commercial Real Estate – Finance

gap solutions

• Advance factories and facilities for industry

• Tourism

• Urban Regeneration

Food/ Agri Sector

• Agri: Tailored funding and volatility management solutions

• Food Processing: scaling and development

• Fisheries: Fish processing and Aquaculture

• Forestry

Infrastructure

• Water

• Transportation • Student Accommodation

• PPPs

• Broadband

• Waste and Environmental • Data Centres

• One Off Infrastructure

• Elderly Care

Big Idea

• Initiatives with potential to be transformative for Ireland – strategic, significant in scale and impact

Strong Future Pipeline of Investment Opportunities

Status Number of

Opportunities

Investments Made 36

Initial Engagements 25

Active Pipeline 52

Dormant Opportunities 68

Lapsed Deals 52

Declined Opportunities 102

Total Engagements 335

• In excess of 330 engagements to date, with 77 current engagements • The active pipeline consists of 52 opportunities across a diverse range of

sectors

• Typically opportunities range in size between €10 million and €100 million

Flexible, long term, sovereign public investment partner

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Active Pipeline by Investment Bucket

Some Current Opportunities

• Straw burning biomass plant

• Event Centre

• Student Accommodation

• Lending platform for food processor supplier

• Nursing Homes

• Primary Care Centres

• Sub Sea Fibre Optic Cables between Ireland and Europe

• Investments in Funds that lend to SMEs

• Infrastructure Port Projects

• Investment in Aircraft Services company

ISIF sits at the centre of an extensive and powerful network

Government •Dept. of Finance

•Dept. of Taoiseach •Dept. of Jobs, Enterprise & Innovation

•Dept. of Public Expenditure and Reform •Dept. of Health

•Dept. of Agriculture

•Other Government Departments

•Embassies

Co-Investors •Irish & International Asset Managers

•Sovereign Wealth Funds •Intl. Pension Funds

•Irish Pension Funds

Debt Finance •Irish Banks

•International Banks •Non-bank credit funds

•EIB

Equity Finance •Irish VC

•International VC

•Irish & International PE funds

•Multi-nationals

Project Entrepreneurs / Sponsors •Start Ups

•Growth Businesses •SME

•Large & Mid-Cap

•Housing

•Multi-nationals

•Infrastructure

•Commercial Semi-States

•IBEC

Advisors •Corporate Finance

•Accountancy •Legal

•Consultancy

Key NTMA Entities •NAMA

•SBCI

•NewERA

•NDFA

State Agencies / Bodies •Enterprise Ireland

•IDA

•Central Bank of Ireland

•Universities •Science Foundation Ireland

•Teagasc

ISIF

Engaging with ISIF

• Strong pipeline of opportunities

• ISIF is interested in Building Investment Relationships

• Access point available via ISIF to co-invest in Ireland

• Open for Business

Contacts

Eugene O'Callaghan Director Tel: +353 1 238 4066 eocallaghan@ntma.ie

Michael Lee Head of Origination and Co-Investment Partnerships Tel +353 1 238 4937 michael.lee@ntma.ie

Fergal McAleavey Head of Private Equity Tel +353 1 238 4432 fergal.mcaleavey@ntma.ie

Donal Murphy Head of Infrastructure and Credit Investments Tel: +353 1 238 4934 donal.murphy@ntma.ie

Cathal Fitzgerald Head of Food and Agriculture Investments Tel: +353 1 238 5017 cathal.fitzgerald@ntma.ie

Kieran Bristow Head of Investment Strategy Tel +353 1 238 5058 kieran.bristow@ntma.ie

Paul Saunders Head of Innovation and Special Investments Tel +353 1 238 5049 paul.saunders@ntma.ie

Brendan Byron Co-Investor Development Manager Tel: +353 1 238 4120 brendan.byron@ntma.ie

Meabh Mc Donnell Business Development Analyst Tel: + 353 1 238 4951 meabh.mcdonnell@ntma.ie

Email: info@isif.ie Web: www.isif.ie Twitter: @ntma_ie