Trust expects net value to reach £460m by year end

The Irish Pension Fund Property Unit Trust was established in 1967 to serve as a single investment body working on behalf of …

The Irish Pension Fund Property Unit Trust was established in 1967 to serve as a single investment body working on behalf of individual company pension funds.

Up until then each individual pension fund would have had its own property investment units and these effectively competed against one another for investment options, explains the Trust's chief executive, Gus MacAmhlaigh.

It operates on behalf of a wide range of bodies including RTE, CIE, Aer Rianta, Aer Lingus, Guinness, a number of the universities, including Trinity College, Arnotts and a number of banks, including Bank of Ireland, AIB and Ulster Bank.

The Act which established it and which gave it tax exempt status was amended in 1977 to allow it to operate on behalf of registered charities and was further changed in 1987 to include other pension funds exempted from capital and corporate tax.

READ MORE

The Trust's cumbersome title comes from its perhaps unusual structure. It exists as an "unauthorised unit trust", Mr MacAmhlaigh explains. It is a unit trust in that its pension fund investors buy units in the fund and receive profits on the basis of the number of units they hold.

There were 562,791 units on issue to 98 unit holders at the end of 1999, with each unit worth £710.03. At that time the Trust was worth about £400m but this has since risen to about £440m and should rise another £20m to £40m, giving the Trust a value of between £460m and £480m by the end of 2000.

The Trust is not allowed to look for customers for its units when they become available. It is there to serve as a property investment company for pension funds, which are allowed to earn profits that feed back into the individual funds and so provide an income for workers when they retire.

The Trust can raise more finance by going back to existing unit holders and offering more units. There is a great incentive for them to do so given the Trust's considerable returns on investment. Its gross return was 23.6 per cent during 1999, which when adjusted for inflation was 20.2 per cent.

"We pay out everything, we don't hold anything back," says Mr MacAmhlaigh. Unit holders are paid quarterly.