SOVEREIGN FUND TO PULL BILLIONS FROM GLOBAL ASSET MANAGERS - Ireland’s sovereign wealth fund will pull several billion euro from global asset managers over the next five years as the Government tries to use the fund’s assets to bolster the domestic economy.
Some €3 billion of the sovereign fund’s €7.9 billion of investable asset is in global equities, bonds, commodities, infrastructure and absolute return funds run by international asset managers. It will divest from these holdings by 2020 as part of its new mandate to invest in projects and companies with the potential to create jobs in Ireland and boost the economy, says the Irish Times. Acadian Asset Management, BlackRock, Deutsche Asset Management and Unigestion are the international asset managers running the largest sums of money for the fund. Eugene O’Callaghan, director of the Ireland Strategic Investment Fund, which was established last December, said: “We are implementing a strategy that will wind down the global assets over a five-year period as we are ramping up the Irish assets.” The Irish fund will continue to place money with asset managers as long as they offer Irish-focused funds and investment opportunities. The Irish fund is a successor to the National Pension Reserve Fund, the rainy-day vehicle established during the Celtic Tiger years. Its €23 billion was raided during the financial crisis to bail out the banks.
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EX-FINANCE CHIEF PICKED UP BY UBER - A global online car booking service and one of Japan's biggest banks have both tapped John Moran to work as a consultant, the Irish Independent has learned.
The former Secretary General of the Department of Finance stood down from his top civil service post in May last year, after just two years in the role, to pursue other interests. The Limerick man confirmed this weekend that he is now acting as a consultant to online taxi service Uber, which is targetting a major push into Europe; and to Nomura, the Japanese banking giant that took control of the remains of Lehman Brothers' European and Asian units following the infamous collapse of the one-time global investment bank. Speaking to the Irish Independent, Mr Moran confirmed that he is working with both companies, though not as an employee. He is also involved in Limerick's campaign to become European City of Culture 2020 and is a director of the European Investment Bank (EIB), a position he was first appointed to while still at the Department of Finance. The board appointment at the EIB is at discretion of the Minister for Finance Michael Noonan. Mr Moran, a former corporate lawyer and banker, is seen as close to the minister.
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EASING OF LENDING RESTRICTIONS OFFERS CREDIT UNIONS HOPE - More than 80% of credit union applications, seeking the removal of lending restrictions reviewed by the Central Bank, have to date been approved as the sector battles for greater freedom to lift lending levels from a 15-year low.
Many credit unions have been highly critical of the Central Bank’s restrictions which they claim are unreasonably onerous, writes the Irish Examiner. Under the regulations, credit unions are limited to lending up to 30% of their loanbook over five years and up to 10% over 10 years. The rules make mortgage lending unviable, thus closing off a lending stream many credit unions are desperate to access. Lending over 10 years accounts for just 2.18% of total loans in the credit union sector. New figures provided to Fianna Fáil finance spokesperson, Michael McGrath show that 59% of the applications received by the Central Bank have now been reviewed. Of these, 83% have had their lending restriction lifted with 17% of applications rejected. Consequently, the percentage of credit unions operating under the Central Bank’s restrictions has fallen from more than half to 39%.
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ALLERGAN WARNS US AGAINST ANY MOVE ON TAX INVERSION DEALS - The chief executive of Allergan, in talks about selling itself to Pfizer to form the world’s largest drugmaker, has cautioned that any attempt by the Obama administration to block a deal aimed at cutting a company’s tax bill would be a “short-sighted intervention”.
Pfizer is in negotiations with Dublin-based Allergan about buying the group in what would be the biggest ever “tax inversion” - allowing the company to report much lower tax costs by moving its domicile to Ireland. The move would create a company with a value of more than $330 billion. Tax experts said an inversion would improve the presentation of Pfizer’s earnings, as well as helping it escape potential future US tax bills on more than $128 billion of profits it had earned overseas. Moving Pfizer’s tax base to Ireland would cut Pfizer’s “book” tax rate which was 26% last year, as it would no longer have to set aside money to pay extra US tax when it repatriated its overseas profits. The move would also create a one-off boost to Pfizer’s earnings of up to $21 billion as the provisions for these “deferred” US taxes - which have accounted for nearly two-thirds of its tax charge over the past four years - were released. The companies hope to announce an agreement by the end of the month, said people close to the process, but there are growing fears among analysts and investors that the US government will attempt to block the deal. In an interview with the Financial Times, Brent Saunders, Allergan chief executive, declined to comment on the talks with Pfizer, but he warned against any political interference designed to frustrate deals aimed at reducing corporation tax.
