Ireland Sees Strong Pipeline of AIFMs as Assets Reach Record Number

The Irish Funds Industry Association (IFIA) announced last week that the domicile is servicing a record €2.5 trillion in assets and it is expecting further growth as alternative asset managers plan to seek authorization under AIFMD.

The hedge fund servicing center now has 43% of the world’s global assets, with figures from the Central Bank showing that in the year to date the net asset value in UCITS increased by 4% and non-UCITS by 10%.

The Irish Funds Industry Association (IFIA) says that four managers have already received authorization under AIFMD and a pipeline of up to 100 Alternative Investment Fund Managers (AIFMs) are seeking authorization under there new directive, which came into force in July. Blackrock became the first AIFM to be authorized in Europe when the CBI approved its applications.

Commenting on these figures, Pat Lardner, chief executive of the IFIA, says, “This responsiveness and flexible service delivery, which sees Ireland provide the widest possible investment strategies, has helped Ireland reach its record high of assets under administration of more than €2.5 trillion.” Of that figure, over 50% of those assets belong to firms that are domiciled in Ireland.

Larder adds that in the past two years 99 new fund managers from 21 countries had established funds in Ireland.

Furthermore, with the further increasing numbers of institutional investors looking to diversify their investment strategies through investing in ETFs, Ireland has again topped market share, with 40% of Europe’s ETFs domiciled there.

At a press briefing last week, it was revealed that an increasing number of fund firms are basing their management hubs in Ireland. It was revealed that a U.S. debt manager is seeking authorization to manage UCITS and alternative funds in the domicile.

Furio Pietribiasi, managing director, Mediolanum Asset Management and Mediolanum International Funds said that for fund mangers in Ireland, risk reporting services are important, particularly for derivatives and 40 Act funds. Big data, analytics and bespoke solutions such as sub-advisory are becoming more important, he added.

At the briefing, it was also revealed that the fund industry is contributing £1 billion to Ireland’s GDP. In addition, labor costs have remained stable since the financial crisis and the 12.5% corporate tax rate, which is an important plank in Ireland’s growth strategy, is likely to remain.

With Asia looking to emulate what is being done in Europe with the regional UCITS passport, Kevin Murphy, chair of the IFIA commented that there is little for Dublin to fear in terms of assets moving away. “There is no one unified product for the region in the sense that each of the main countries – Hong Kong, Thailand and Korea – has their own product,” he says. “Until they sign up there is not one competing product.”