The vast majority of Ireland's foreign investment activity originated in the IFSC last year, the latest figures from the Central Statistics Office (CSO) show.
At the close of 2005, 80 per cent of the Republic's foreign financial assets were held by IFSC enterprises, in particular those operating in the funds sector.
Ireland's stock of foreign investment assets stood at a total of €1.598 trillion at the end of December 2005. This represented a 28 per cent rise on 2004.
However, the growth in foreign liabilities outpaced the increase in assets, and ended 2005 at €1.642 trillion. This resulted in an overall net liability of €44.5 billion for the year.
According to the CSO figures, portfolio investments (which include investments in equity and debt instruments such as bonds and notes) accounted for most of Ireland's foreign assets and liabilities in 2005.
CSO statistician Stephen Treacy explained that the bulk of this portfolio investment activity related to money invested in Irish funds, as well as domestic funds investing overseas. Foreign banks based in the State "with large balance sheets" also contribute to the figures, Mr Treacy added.
While foreign direct investment into Ireland rose by almost 11 per cent to €185.2 billion in 2005, this increase was offset by capital outflows of €44.3 billion - due mainly to loans made by IFSC companies to overseas affiliates. Meanwhile, Ireland's direct investment abroad rose by €9.3 billion to €87.2 billion.
