Ireland has emerged as the leading European domicile for investment funds, according to an independent Economist Intelligence Unit survey of global asset managers, "Choosing a European Fund Domicile: The Views of Global Asset Managers."
The survey, commissioned by Matheson, places Ireland far ahead of its nearest rivals and indicates that Ireland is poised to attract a growing share of investment from the thriving global funds industry.
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Overall, 71% of the 200 global asset managers surveyed and 76% of the US-based respondents said that they would now choose Ireland as one of their top-3 European fund domiciles, if starting over.
Combining the responses of all asset managers surveyed, 71% chose Ireland, while Germany and Luxembourg tied for second with 45% of managers choosing each as a top-3 choice, followed by the UK at 33%, the Netherlands at 27% and France with top-3 preferences from 23% of managers.
Ireland also led amongst US-based managers, with 76% choosing Ireland as a top-3 domicile. Luxembourg placed second for US managers with 46% giving it a top-3 preference, followed by Germany with 44%, the UK with 42% and the Netherlands, which was given a top-3 preference by33% of US managers.
Michael Jackson, head of Matheson’s Asset Management and Investment Funds group, said: "The value of Irish domiciled funds is currently $1.8 trillion and remarkable growth rates are now widely predicted for the global funds industry. If these materialize, Ireland is well positioned to attract a substantial share of that growth. 94% of the respondents to this survey already have funds domiciled in the EEA, while the remaining 6% plan to by 2016. For the vast majority of managers to choose Ireland as the favored funds domicile, it is a clear vote of confidence in the maturity and competitiveness of the Irish funds industry.
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By GlobalDataMr. Jackson also noted that the survey results helps explain Ireland’s performance as the fastest growing European UCITS domicile in recent years and why we are now seeing a clear trend of funds moving to Ireland from competing European domiciles such as Luxembourg.
"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.
Below are the key survey findings segmented by US asset mangers’ responses followed by the global survey results:
US Key Findings: European Domicile Preferences for US Asset Managers
Top three choices for domiciling investment funds in Europe in terms of best regulatory conditions:
- Ireland 76%
- Germany 52%
- United Kingdom 44%
- Luxembourg 43%
- Netherlands 30%
- Top three choices for domiciling investment funds in Europe in terms of best legal and tax framework:
- Ireland 75%
- Luxembourg 52%
- United Kingdom 44%
- Germany 37%
- Netherlands 33%
Top three choices for domiciling investment funds in Europe in terms of best business conditions, such as ease of doing business, service culture and local expertise:
- Ireland 78%
- Germany 44%
- Luxembourg 43%
- United Kingdom 38%
- Netherlands 37%
Global Key Findings: European Domicile Preferences for 200 Global Asset Managers across Latin America, Asia Pacific, North America and Europe
Top three choices for domiciling investment funds in Europe in terms of best regulatory conditions:
- Ireland 67%
- Germany 48%
- Luxembourg 43%
- United Kingdom 32%
- Netherlands 29%
Top three choices for domiciling investment funds in Europe in terms of best legal and tax framework:
- Ireland 73%
- Luxembourg 47%
- Germany 43%
- United Kingdom 33%
- Netherlands 25%
Top three choices for domiciling investment funds in Europe in terms of best business conditions, such as ease of doing business, service culture and local expertise:
- Ireland 72%
- Germany 45%
- Luxembourg 43%
- United Kingdom 32%
- Netherlands 29%
Most important decision-making factors for fund managers when choosing a European fund domicile:
- Regarding financial and business factors, 52% of 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, 25.5% of managers ranked as most important speed to market, followed by investors’ perceptions of a specific jurisdiction and its reputation and longevity as a funds center.
- Considering legal and regulatory factors, 21.5% of 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.
Predicting 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% in 2013.
- 29% predict that their firm will have over $1 billion in European alternative investment funds (by assets under management) by 2016 – up from 16% in 2013.
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."
