Ireland’s National Pensions Reserve Fund (NPRF) has sold €11m worth of shares in Bank of Ireland (BOI) and announced a €4bn increase in the value of its directed portfolio, holding the government’s stake in two partially nationalised banks.

The sale of the 43m BOI shares comes a month after the Irish government disposed of €1.8bn in preference shares held by the NPRF following a €4.7bn investment by the state in 2009.

BOI’s share price rose following yesterday’s announcement, closing at €0.2850 compared with Monday’s closing price of €0.2580.

A spokesman for the NPRF confirmed that the shares sold did not form part of the fund’s directed portfolio – rather, they stemmed from a 2009 transfer of university pension fund assets in lieu of the government’s statutory annual payment and were held within the discretionary portfolio.

Separately, the NPRF also announced a preliminary return of 6.3% for its discretionary portfolio, increasing by €700m to €6.8bn at the end of the year.

Since the fund’s inception, the discretionary portfolio has returned 3.9% per annum, the statement by the National Treasury Management Agency (NTMA) added.

The NTMA also said the directed portfolio was valued at €13.1bn by year-end, a €4.1bn increase over the value disclosed in its most recent quarterly report for the three months to September.

The statement noted that the value stemmed from the BOI shares the fund continued to hold – accounting for 13.95% of voting rights following this week’s sale – as well as its 99.8% stake in Allied Irish Banks (AIB) and cash derived from last year’s BOI preference share sale.

However, some of the increase may stem from a revised valuation of the AIB stake, previously independently assessed as €0.0079 at the end of 2012 after the NPRF decided that the publicly traded price was an “inappropriate” measure of valuation.

The NTMA added that, once the necessary legal changes were passed by Ireland’s Dáil, the entirety of the €6.8bn discretionary portfolio would be available to the proposed Ireland Strategic Investment Fund (ISIF).

It said that, in anticipation of the conversion, the NPRF Commission had already committed or invested €1.3bn to areas of “strategic importance” to the local economy, including a suite of funds targeting small and medium-sized enterprises.

At the end of 2013, the combined value of both portfolios stood at nearly €20bn, higher than at any point since 2010.

It lost more than €9bn in value between 2010 and 2011, after the NPRF Commission wrote down the value of the directed portfolio.

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