The National Pensions Reserve Fund (NPRF), set up five years ago to help meet Ireland's public pension costs in the future, rose in value by €830 million, or 5.4 per cent, in the first three months of the year.

The fund, which received a €362 million contribution from the Exchequer in the period, was worth €16.6 billion at the end of March, up from €15.4 billion at the end of 2005.

Its performance was in line with that of private-sector fund managers in the Republic, as it benefited from continued strong growth in equity markets.

Over the quarter, the fund increased its investment in property and private equity. The fund aims to allocate 8 per cent to each of these asset classes, a target it hopes to reach by the end of 2009.

It invested €135 million in three property investment vehicles, to bring the total committed to this asset class to €537 million, out of a planned €2 billion.

The first-quarter investments included a €35 million investment in a German retail property fund, a €50 million investment in a euro-zone office fund and a further €50 million in a realty fund.

The fund's goal is to pay for the bulk of social welfare and public service pensions over coming decades. Three in every four people now working are expected to benefit from it during retirement.

Last year, the NPRF turned in its best annual performance since it was established in 2001, rising in value by 19.6 per cent or €2.4 billion.