Search News & Insights
Ireland is the leading European funds location according to a survey of global asset managers
AUTHOR(S): Joe Beashel, Anne-Marie Bohan, Gavin Coleman, Liam Collins, Dualta Counihan, Elizabeth Grace, Michael Jackson, Philip Lovegrove, Shay Lydon, Tara Doyle
PRACTICE AREA GROUP: Asset Management and Investment Funds
Ireland is the European domicile of choice for investment funds, according to an independent Economist Intelligence Unit survey of global asset managers commissioned by Matheson. The survey places Ireland far ahead of its nearest rivals, meaning Ireland is well-positioned to attract a growing share of jobs and investment from the thriving global funds industry.
71% of global asset managers said that they would now choose Ireland as one of their top-3 European fund domiciles, if starting over. Germany and Luxembourg came jointly second, with 45% of managers choosing each as a top–3 choice. The UK came third, with 33% of managers choosing it as a top-3 domicile. The Netherlands came fourth with 27% of managers’ voting it a top-3 domicile, while France was fifth, with 23% of managers giving it a top-3 preference.
Ireland is very highly ranked in all key markets, with three-quarters of US and UK managers saying they would choose Ireland as a top-3 domicile, if starting over. Ireland was the favoured jurisdiction overall for managers across all regions, including Latin America, Asia Pacific, North America and Europe.
Michael Jackson, head of Matheson’s Asset Management and Investment Funds group, said, “The value of Irish domiciled funds is currently €1.3 trillion and the funds industry accounts for over 12,000 jobs in Ireland. Remarkable growth rates are now widely predicted for the global funds industry. If these materialise, Ireland is well positioned to attract a substantial share of that growth, along with the jobs linked to servicing those funds.
“Ireland is clearly now the European domicile of choice for global asset managers. 94% of the respondents to this survey have funds domiciled in the EEA, while the remaining 6% plan to by 2016. For the vast majority of managers to choose Ireland a favoured jurisdiction to domicile funds is a clear vote of confidence in the maturity and competitiveness of the Irish funds industry. This helps explain Ireland’s performance as the fastest growing European UCITS domicile in recent years. It also helps explain why we are now seeing a clear trend of funds moving to Ireland from competing European domiciles such as Luxembourg.
“I am especially pleased to see the global nature of the preference for Ireland. We have long been aware that Ireland is the domicile of choice for US and UK managers, but it is particularly pleasing to see that Ireland is also now the clear favourite amongst managers in Western Europe along with growth areas such as Latin America and the Asia Pacific region. Indeed, Ireland leads across all regions surveyed.”
The Economist Intelligence Unit asked 200 global asset managers to identify the European domiciles they would now choose if starting afresh with their fund ranges. It also asked questions about the most important factors when choosing a domicile and anticipated growth.
Ireland was the preferred domicile across all criteria surveyed: 73% of global managers ranked Ireland as a top-3 domicile in terms of its legal and tax framework. 72% ranked Ireland top-3 as regards business conditions for domiciling funds. 67% of respondents ranked Ireland as top-3 in terms of regulatory conditions.
Liam Quirke, managing partner at Matheson said, “This report represents a significant investment by Matheson in maintaining Ireland’s competitiveness as a leading domicile for international investment funds. In addition to being a good news story on Ireland’s current performance in this very important global business sector, it contains detailed and important market data concerning the most important business needs of the international asset managers who promote and establish such funds and how Ireland can position itself to meet those needs better than competing jurisdictions.”
The survey asked what the most important decision-making factors are for fund managers when choosing a European fund domicile:
- As regards financial and business factors, managers ranked the cost of doing business as of greatest importance, followed by tax treatment of fund vehicles and presence and range of double tax treaties.
- In terms of market and distribution factors, managers ranked as most important speed to market, followed by investors’ perceptions of a specific jurisdiction and its reputation and longevity as a funds centre.
- Amongst the legal and regulatory factors, managers ranked the approach to implementing the AIFMD as most important. This was followed by the sophistication of the national regulator and the approach to implementing the UCITS Directive.
The survey asked managers to predict what their Europe-domiciled assets under management would be by mid-2016:
- Fund managers say the value of their funds located in Europe will grow significantly by 2016 - in terms of both UCITS and alternative funds.
- 56% of managers predict that their firm will have over $1 billion in UCITS assets under management in Europe by 2016 - up from 41% today.
- 29% predict that their firm will have over €1 billion in European alternative investment funds, by assets under management, by 2016 - up from 16% today.