Pension fund 1/3 in irish banks!!

"The reserve fund is now using two separate categories to calculate its figures, as it invested €7bn in AIB and Bank of Ireland earlier this year.

The fund is currently holding the bank shares at cost price, though the banks will be paying a dividend

The bank investments account for more than a third of the fund’s total assets."
rte.ie/news/2009/1008/pensions.html

Diversification - Irish style.

Something doesn’t quiet add up here.

Considering the performance of Irish bank shares since the start of the year, it would seem highly improbable that a fund with a 1/3 of it’s holding in bank shares would only have increased ~10%.
It suggests that bank shares were purchased much more recently than the start of the year.

That was the government digout early this year. The ‘value’ of the digout in preference shares was transferred to the NPRF afterwards. The NPRF gets the divvys too.

€7bn invested in ordinary shares would have bought the entire Irish banking system twice over .

That’s the common shares. They bought preference shares and are holding at cost.

Ah ha… gracias… had forgotten that.

Does that mean we lose one third of the NPRF if NAMA results in 100% nationalisation of the banks in question?

Yes.

But we gain some busto banks!! 8DD

Yes, but it is basically an accounting issue - either the NPRF owns it or NAMA does. Either way the taxpayer ends up paying.