Citizenship by Investment

More Funds in Ireland and a growing demand for ESG investing

Articles, Funds Industry, Irish Funds

March 8, 2021

Over 600 funds or funds of funds were registered in 2020 with over US$ 90 billion in assets being injected into the Irish ‘fundsscape.’ There was a double digit growth in the funds industry as more fund promoters and managers chose Ireland as their funds domicile. Notably, investors are now tending to be drawn to ESG funds which provide environmental, societal and financial returns.

The Irish funds industry has been faring well over the past year with many more funds being registered in Ireland than in previous years. Due to its attractive and established funds offering – Ireland is drawing the attention of non EU fund managers keen to attract European investors using Irish fund vehicles.

Recently, the Investment Limited Partnerships (Amendment) Bill 2020 (ILP Bill) was enacted making Ireland an ever more attractive funds jurisdiction. The ILP Bill now allows for investors to serve on any investment board/committee and removes the requirement for unanimous approval for investment decisions which historically were prohibited. It also has increased beneficial owner reporting requirements and brings the Investment Limited Partnership in line with EU and international AML standards. Being one of the few common law funds hub in the world, the Investment Limited Partnership is an alternative fund vehicle.

The Minister of FInance Mr Donahoe stated that the ILP will;

“allow Ireland to better compete for global private equity investment, with the aim of creating employment and securing Ireland’s reputation as an attractive location for the funds industry, which is subject to a robust and transparent regulatory regime.”

Who are the key funds players in Ireland?

A recent funds research report was prepared by Monterey Insight who are “a leading independent fund industry research company that provides the only comprehensive report of service providers for all investment funds serviced in UK, Luxembourg, Ireland, Jersey and Guernsey. Based in London, the company’s research covers around 37,000 investment funds within these jurisdictions”. It provides insightful reading for fund administrators, custodians, fund managers and registrar and transfer agents working in the European funds sector.

Monterey Insight Ireland Fund Report highlights the exponential growth of circa 10% in the Irish Funds industry with over US$4.2 billion worth of assets under management by Irish funds. Interesting to note that the leading Irish funds players were State Street Fund Services. They have over US$ 1.38 billion net assets that they administer as well as similar amounts for value of assets the funds they offer custody or transfer agents services to have. The leading funds auditor was PWC with 2,360 funds – a definite leader – compared to the other Big Four auditors who had between 1,311 to 1,828 funds on their books.

Law firms that were ranked as key legal advisers for domiciled and serviced funds included Maples Group, Matheson, Arthur Cox and Dillion Eustace. The leaiding Management Companies/promoters were BackRoch Financial Management, PIMCO and Vanguard Group.

Notably a global trend that was also evident in Ireland was an interest for funds to invest in ESG (Environmental, Social and Governance). Internationally ESG funds drew in US$51 billion in 2020 which is well over double than that recorded in 2019. The surge in interest in ESG investing is increasing as funds are adapting and steering their investment strategies to reflect the interests of their investors. Whether funds now invest a greater proportion in renewable energy or healthcare – or seek measurable impact on key issues like gender diversity or carbon emissions – impact investing is certainly a trend that is here to stay.

#fundmanagers #irishfunds #europeanfunds #impactinvesting #investinireland