The passing of the amended Irish Limited Partnership Act in December could see Ireland promoted to the “premier league” of domiciles for private assets.
Furthermore, the impact of the bill and its ability to attract more fund managers to Ireland could create an additional 3,000 jobs and $40 billion in assets by 2025.
These were some of the views expressed when we asked leaders in the Irish funds market for their thoughts on the year ahead.
PAT LARDNER, CHIEF EXECUTIVE, IRISH FUNDS
Ireland passed the Investment Limited Partnership (ILP) (Amendment) act in December 2020. What impact will it have on Ireland’s funds market?
The Act modernises Ireland’s partnership offering for strategies investing in private assets and supports our drive to be the premier location to support global investing. It will be especially welcome by those managers who want to use an EU-based, common law partnership structure which complies with AIFMD. It will attract managers to Ireland as a key base for European capital raises and will also help ensure that we are optimally positioned to develop as a centre for green financing and support the EU Green Deal.
The overall impact of these developments will be significant and felt country-wide – we estimate that it will create an additional 3,000 jobs by 2025 while attracting up to €20 billion per annum in global private capital.
MELÍOSA O’CAOIMH, HEAD OF NORTHERN TRUST, IRELAND
What alternative asset classes will be of most interest in Ireland in 2021?
Developments in Ireland’s regulatory landscape combined with global trends will see continued focus on alternative investment asset classes in addition to traditional cross-border distribution vehicles, such as the tax-transparent Common Contractual Fund.
Use of private debt and private credit fund structures will continue growing, spurred by factors including the ongoing low-interest-rate environment and volatile returns on traditional asset classes.
The enactment of the ILP act in December paves the way for significant growth across Ireland’s private equity, infrastructure, renewables and real estate offerings. The reform aligns Ireland more closely with other leading alternative fund jurisdictions, and coincides with the broader global trend for growth in private capital funds which offer the advantages of portfolio diversification away from volatile markets
DECLAN O’SULLIVAN, PARTNER, DECHERT
What are clients’ biggest regulatory concerns for 2021?
The most urgent concern is how managers incorporate ESG risks into their investment process before March 10. The largest concern is compliance with the CBI’s CP86 ‘Dear Chair’ letter. The review found that not all managers had fully implemented their framework and ensuring compliance will be a key focus and challenge.
Key areas of focus for the CBI in its work with the European Securities and Markets Authority are fund liquidity, leverage, performance fees and costs generally, and treatment of errors with an increasing threat of enforcement.
What impact will the updated ILP Act have on Ireland’s funds market?
It brings Ireland into the premier league when it comes to competing in the market for private equity, private credit and other real economy asset classes which are typically structured as partnerships. Obtaining brand recognition and ensuring regulatory support for the product will be critical to the success of the ILP in its first year. If this is achieved, it will have a major impact in allowing managers to domicile these funds in Ireland alongside their other product ranges rather than in Luxembourg or offshore.