Mixed fortunes for Ireland and Swiss alternatives industries

Ireland’s fund industry continues to grow despite the country’s financial problems while the Swiss Funds Association reports a fall in fund volumes blamed on volatile and downward trending markets.

Two of Europe’s hedge fund centres have reported mixed results so far in 2011. Ireland’s fund industry is set to create 700 jobs over the next six months with the value of funds under administration (AUA) in the country, growing to €1.9 trillion ($2.6 billion) this year, up €500 billion ($673 billion) on 2010.

Switzerland, however, has seen the total volume of assets in the investment funds industry fall by just under 2% month-on-month in August to Sfr608.3 billion ($669.9 billion). The decline is due to persistently difficult markets and the sharp downward trend on the stock markets, according to the Swiss Funds Association (SFA).

Swiss funds for institutional investors accounted for 36% or Sfr217 billion ($239 billion) of the total, according to data compiled by SFA and Lipper. The strength of the Swiss franc and negative market developments led to a depreciation in assets under management of around Sfr11.2 billion ($12.3 billion) or 2% in August, less than in July.

Net outflows of Sfr3.4 billion ($3.7 billion) in August were attributed to profit-taking in the bond fund segment of the market.

The other funds category posted a performance gain of Sfr2 billion ($2.2 billion) while bond funds were Sfr1.1 billion ($1.2 billion). Equity funds had the heaviest losses at Sfr10.6 billion ($11.7 billion) followed by asset allocation funds.

However, other funds attracted the most new money, Sfr258.2 million ($284.3 million), with commodities in demand. Money market funds attracted Sfr154 million ($169.6 million) in net assets while Sfr2.9 billion ($3.2 billion) was withdrawn from bonds funds.

Those funds denominated in Swiss francs were particularly hit hard, with outflows of Sfr1.1 billion ($1.2 billion) as investors took profits. Equity funds posted net outflows of around Sfr420 million ($462.5 million) compared with Sfr550 million ($605.7 million) for asset allocation funds.

Most of the top 10 providers on the Swiss fund market saw volumes fall in August compared with July, with only two reporting a slight increase in AUM.

Meanwhile, Ireland’s fund services industry grew 26% in the last year and now manages assets worth €1.9 trillion ($2.6 trillion). The growth has led to 400 new jobs created in 2010. An additional 1,000 jobs are expected to be created in the fund administration sector by March 2012, according to accountancy and finance recruiter Marks Sattin.

Salaries, which dipped as a result of the financial crisis, are rising at all levels with fund accountants receiving 12.5% rises this year on average and heads of operations gaining 8%, according to Marks Sattin.

Bonuses, negligible following the credit crisis, have risen to an average of 12%. For those earning over €90,000 ($121,176), the average 2011 bonus was 20%. This means total remuneration for top positions is over €159,000 ($214,078).

These pay rises follow salary cuts in the fund services sector in 2008 and 2009 during which salaries fell by between 10% and 20%.


This article was first published on Hedge Funds Review

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