Irish fund managers will continue to support Irish growth companies after the introduction of a single European currency, the chairman of the Irish Association of Investment Managers (IAIM) has said.

Mr Gavin Caldwell said that Irish pension funds, which currently have about 30 per cent of assets invested in Irish stocks, should not necessarily change their investment policy to mirror the Republic's percentage within a euro index which would currently be less than 1 per cent.

"The introduction of the euro does not automatically warrant ownership of more Continental rather than Irish equities," he told a seminar organised by the Irish Association of Pension Funds (IAPF) yesterday. "From an investment manager's perspective, leading Irish companies have been generally successful and the jury is still out on the ability of corporate Europe to meet investor expectations in terms of financial performance yardsticks and corporate governance."

He also said the need to reduce exposure to a very small number of Irish companies - which increased the risk of one or more of these firms running into difficulties - might be more of a factor than currency risk in changing investment policy. If this were the case, then Irish investment managers needed to move funds into good assets wherever they found them, not necessarily in Europe only. Mr Caldwell also said that although Irish pension funds were already changing their asset mix as a result of EMU, this should not mean that it would be difficult for most Irish companies to come to the stock market or to raise capital.

"New projects and growing companies can be assured of support from Irish fund managers subject to the usual considerations," he said.