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Irish National Treasury Agency Divests Nearly 3 Million Euros from Israeli Companies

Ireland divests 2.95 million euros from six Israeli companies, aligning investments with national objectives and risk profiles.

4/5, 08:29 EDT
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Key Takeaway

  • Ireland's NTMA divests nearly 3 million euros from six Israeli companies, aligning investments with national objectives and risk profiles.
  • The ISIF's "double bottom line" mandate focuses on commercial investments that support Irish economic activity, prompting the divestment.
  • With a portfolio valued at 15 billion euros, the ISIF continues to review and adjust its global investments to meet strategic objectives.

Divestment Decision

The Irish National Treasury Management Agency (NTMA) has announced a significant divestment from its Ireland Strategic Investment Fund (ISIF), amounting to almost three million euros. This decision affects investments in six Israeli companies: Bank Hapoalim BM; Bank Leumi-le Israel BM; Israel Discount Bank; Mizrahi Tefahot Bank Ltd; First International Bank, and Rami Levi CN Stores. The total value of the shares being divested is 2.95 million euros. The move has been described by the Irish finance minister, Michael McGrath, as the "correct decision," emphasizing the alignment of investment strategies with the nation's commercial objectives and risk profiles.

Investment Strategy and Objectives

The ISIF operates under a "double bottom line" mandate, focusing on commercial investments that also support economic activity and employment within Ireland. Managed by the NTMA on behalf of the State, the fund's global investments aim to provide liquidity for Irish portfolio investments and to earn a risk-adjusted return that supports the ISIF's performance with a low-risk appetite. The divestment from the Israeli companies was justified on the grounds that their risk profiles no longer fit within the ISIF's investment parameters. Furthermore, the finance minister highlighted that the commercial objectives pursued through these investments could be achieved through alternative avenues.

ISIF Portfolio Overview

The ISIF's portfolio, valued at 15 billion euros at the end of 2022, includes a global portfolio worth 5.2 billion euros. This global portfolio is crucial for providing liquidity and ensuring the fund's ability to meet its investment objectives, including supporting economic activity in Ireland. The divestment decision reflects the fund's ongoing review process to ensure that all investments align with its strategic objectives and risk tolerance. The finance minister's endorsement of the decision underscores the government's support for the ISIF's independent management and its investment strategy.

Management Quotes

  • Michael McGrath, Irish finance minister:

    "ISIF has determined that the risk profile of these investments is no longer within its investment parameters and that the commercial objectives of these investments can be achieved via other investments... While recognising the independence of ISIF in the management of the investment portfolio, I believe this is the correct investment decision in respect of the assets it manages on behalf of the State."