Irish fund service providers set out advantages of country as fund base
The financial stress on Ireland has been so tough it needed bailing out, and some banks have been nationalised. This led some onlookers to question if the country’s fund servicing industry might suffer ‘aftershocks’ from being in a related field.
John Donohoe, chief executive at business consultants Carne Group, says it has not. “The Irish banking crisis has no direct bearing on the funds industry. Most of the service providers operating in Ireland are international banks so there is no ‘counterparty’ risk as such to Ireland.
“It remains the leading fund servicing centre in the world for alternative investment, in addition to being the second largest servicing centre for Ucits funds after Luxembourg. We continue to see substantial growth in the this area.”
Rachel Turner, head of the Ireland fund servicing team at BNY Mellon, whose $404bn administration assets make it the country’s largest fund administrator, agrees: “Despite the ongoing economic challenges in Ireland, the funds industry continues to thrive and play an increasingly important role in the wider European industry, with client confidence steadily improving.”
For Paul Daly, managing director, global fund services at BNP Paribas Securities Services Ireland, the country’s strengths are “a highly-skilled work force with strong, well-established infrastructure including strong professional services firms, and a good regulatory framework.
“Ireland historically, has also gathered extensive experience and therefore expertise in the full range of fund structures, including Ucits and alternatives. Its language and convenient time zone are also key advantages”.
BNY Mellon’s Turner notes her firm’s continued investment in 1800 employees in Ireland. This commitment mirrored the expansion in Dublin in October of its rival GlobeOp Financial Services.
But it is not just Ireland’s service providers that are expanding.
In 2011 fund promotional body the Irish Funds Industry Association expanded with offices in Singapore and Tokyo. They would “play an important role in our efforts to expand business in Asia,” said Ken Owens, IFIA association chairman.
The IFIA earlier opened in Chicago, Boston, Atlanta and London, but Owens said Asia was “a crucial market for Ireland, we believe we can offer the solutions and services required by managers and promoters from the region.”
Practitioners say the continuing health in Ireland’s fund servicing industry is thanks to the continuing recognition of the Ucits brand both in and beyond its European birthplace; investors pressuring managers to move offshore funds onshore, or at least launch Ireland-domiciled parallel funds; and the diversity of service providers in Ireland.