The ISIF’s continued progress in 2016 means it now has a well-diversified investment portfolio with ISIF capital supporting 140 companies or projects and, directly and indirectly, 21,900 jobs. While the macroeconomic environment in Ireland has improved significantly in recent years and the availability of private capital has increased greatly, there are still material gaps in the market. The ISIF is focused on financing sectors, in conjunction with private sector partners, where these gaps are most pronounced.

It was always anticipated that the initial ISIF investment strategy and portfolio design would change over time and that flexibility and adaptability would be critical elements of its business model. To that end, when the initial ISIF Investment Strategy was finalised in mid-2015, it was agreed that a formal review of the Strategy would take place after eighteen months and that this would include consultation with the Minister for Finance and the Minister for Public Expenditure and Reform. The review, which includes an appraisal of the success of the ISIF’s mandate to end-December 2016, is currently underway.

In all its business activities, the NTMA seeks to adopt a commercial and prudent approach. In the area of funding and debt management, this means diversifying our investor base by region and by type, ensuring we always maintain a prudent cash reserve and working to actively manage and smooth our bond redemption profile. This strategy is particularly important for a small open economy such as Ireland and is one we have adopted since we re-entered the markets following our exit from the EU/IMF programme in 2013. The major international political events of 2016, particularly the result of the UK Brexit referendum in June, serve as a reminder of the importance of maintaining a prudent approach and a permanent contingency for unanticipated events.

At Board and committee level we witnessed a number of changes during the year. Brendan McDonagh stepped down from his role as a Board member and John Herlihy stepped down as an external member of the Investment Committee. I would like to take this opportunity to thank Brendan and John for their contribution to the NTMA. In Brendan’s case I would note that he previously served as a member of the NTMA Advisory Committee prior to the establishment of the Board and his experience was invaluable in managing the transition to the new governance structure. I would also like to welcome our new Board member, Gerardine Jones, and external Investment Committee member, Mark Ryan.

During 2016, we also carried out our first Board effectiveness review and, arising from this, have reconfigured our committee structure in the light of experience over our first 18 months. We decided it would be more efficient and lead to greater synergies if the Risk and Audit Committees were combined and we also agreed that establishment of a State Claims Agency Strategy Committee, containing relevant external expertise, would be of use, given the specialist nature of the SCA’s business and the particular challenges faced by it. The combined Audit and Risk Committee is operational and we expect the SCA Strategy Committee to be formally established in the coming months.

As I mentioned in my remarks in last year’s Report, in early 2016 we developed an overall corporate strategy to complement and support our business mandates and their strategic business objectives. The strategy commits the organisation to four strategic goals in support of its business mandates. The primary goal of the NTMA is to deliver long-term value to the State. Three supporting goals – maintaining and enhancing our reputation, developing our capabilities as an adaptive organisation, and enabling our people to reach their potential – will enable delivery of long-term value while building sustainable business performance.

As an organisation, I believe we have made good progress over the last year in embedding a culture that will ensure the achievement of these goals and the continued successful delivery on our business mandates. In conclusion, I would like to thank my fellow Board and committee members, the management team and staff for their work throughout the year and I look forward to their continued commitment and support in the future.