Brexit, new fund structures and demand from US managers to drive Irish funds in 2018
Sean Murray, Managing Director, Alternative Assets - EMEA
SANNE proud sponsor and host to the 2017 Opalesque Ireland Roundtable.
There are over 4.3 trillion Euros in assets under administration in Ireland, including over 2.5 trillion Euros of alternative and hedge fund assets - many from other jurisdictions such as Cayman - which is easily 40% of the world's total. And naturally, a huge body of indigenous Irish domiciled funds (over 6,600) that are authorized and regulated by the Central Bank in Ireland. Of those, about 75% (by assets) are UCITS funds and the remaining 25% AIFs.
Irish funds are distributed to around 70 countries globally as they are found to be easy to distribute, recognized and accepted by institutional and retail investors, and also fit easily on to platforms. Most UCITS sold in Europe in 2016 and 2017 were Irish funds. Ireland also has the lion's share of European ETFs, about 56% by asset size, which with the move to passive investments continues to enjoy large growth rates as well.
Like the UK and the US, Ireland has a common law legal framework which is a key reason why Ireland sees interest particularly from the US around potentially re-domiciling products from traditional offshore jurisdictions like Cayman and BVI into European locations. Irish service providers believe the island is probably best placed in Europe as it's a lot easier re-domiciling common law to common law than common law to civil code such as in jurisdictions like Luxembourg or France, for example.
Participants gathered in in Dublin and include:
- Sean Murray, Head of Funds Services EMEA, SANNE
- Graeme Rate, Head of Hedge, SANNE
- Philip Dempsey, Ireland Branch Manager, LIS Ireland
- Declan O'Sullivan, Managing Partner, Dechert
- Oisin McClenaghan, Partner, Matheson
- Sean Herlihy, Director, PWC
- Kieran Fox, Director of Business Development, Irish Funds
The group also discussed:
- Ireland's role in the private credit industry which could reach one trillion dollars in assets by 2020 (compound growth of 20% a year) (page 7)
- Why has there been a significant uptake in Irish Common Contractual funds (CCFs) in the recent past? (page 9-11, 13)
- What is behind the Dublin-Luxembourg debate? (page 11-13)
- Ireland and Brexit (page 14 - 18). Will there be a significant difference to the investment management industry between a hard and soft Brexit? (page 22-24)
- Ireland's LLP: One of the most important recent developments (page 18)
- Dublin is also a major Tech Hub - countless benefits and synergies with the finance sector (page 19)
- Will we see a return to more actively managed funds over the next three to five years? (page 24-25)
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