Featured Article 22 Feb 2012

Ireland experienced the highest net inflows of UCITS of all fund domiciles in 2011 attracting some Eur 62 billion – almost Eur 50 billion more than the next most successful domicile.

In fact, Ireland attracted nearly twice as much as all the other jurisdictions put together during 2011 and experienced growth of 8 per cent.

The annual statistical report, Trends in the UCITS Market, from the European Fund and Asset Management Association (Efama) revealed that Ireland bucked the trend with most domiciles actually facing significant outflows of UCITS during 2011. France, Italy and Luxembourg suffered the biggest losses (Eur 91 billion, Eur 30 billion and Eur 24 billion respectively).

In the fourth quarter alone Ireland attracted an impressive Eur 26 billion in new monies. Gains by only four other domiciles were considerably less at Eur 3 billion, Eur 1 billion, Eur 1 billion and less than Eur 1 billion. Throughout the last quarter of 2011 some 20 countries registered net outflows.

These figures mean that Ireland continues to be the fastest growing UCITS domicile in the world and is rapidly outpacing all other domiciles in terms of growth. Over the past 11 years the net assets of Irish UCITS have grown more than 500 per cent and Ireland’s UCITS market share has increased to 14.5 per cent from 11.5 per cent at the beginning of 2011, according to Efama.

Ireland’s impressive gains in UCITS business were reinforced by figures from the Central Bank of Ireland at the end of 2011 which showed that Irish domiciled investment funds reached a record high, passing the €1 trillion mark for the first time - and up some 40 per cent from the end of 2009. Irish authorised UCITS account for almost 80 per cent of the assets of all Irish domiciled funds.

Ken Owens, Chairman of the Irish Funds Industry Association, said: “These figures demonstrate Ireland is rapidly growing its share of UCITS business and is clearly the managers’ choice for 2011. Importantly, this also emphasises that Ireland is able to provide all the solutions to the international funds industry whether in the retail or alternative sector.”

Mr Owens added: “We expect, that as the world moves to embrace further regulation such as AIFMD and FATCA, that Ireland will continue to be the natural choice for fund managers. This will largely be as a result of Ireland’s robust regulation; its regulation-ready product solutions with a proven track record and widest distribution capabilities; and its open environment with information exchange agreements in all of its tax treaties and a policy of cooperating in matters of tax transparency.”

Certainly, independent figures show that while Ireland is making impressive gains on the retail UCITS product it continues to drive forward on the alternative side also. Managers gearing up for AIFMD are ever more turning their sights to Ireland with figures for the jurisdiction’s AIFMD-ready Qualifying Investor Fund (QIF) soaring. Recent figures from the Central Bank of Ireland demonstrated that the number of QIFs had reached an all time high of 1,420 with assets also reaching a new peak of EUR 182 billion.

Ireland, which already administers approximately 40 per cent of the world’s alternative investments, has seen QIF assets grow more than 20 per cent in 12 months and 35 per cent in 2010.

Today Ireland services a total of almost Eur 1.9 trillion in assets, an increase of more than 30 per cent in the last 2 years.

All this growth in business means the Irish funds industry is playing an increasingly important role in Ireland’s economy creating more than 1,200 net new jobs throughout 2011.
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