Irish Funds Distribution Workshop 24 June 2016 Ken Owens - PwC 2 - PowerPoint PPT Presentation

Irish Funds Distribution Workshop 24 June 2016 Ken Owens - PwC 2

Introduction 24 June 2016 Ken Owens - PwC 3

About the IF Distribution Working Groups • Promote Ireland as a domiciled for internationally distributed investment funds.​ • Capture and promote key statistics regarding the distribution of Irish domiciled across the Investment Management community.​ • Ensure Irelands competitive advantages from a Distribution perspective are understood and marketed from a​ - Service ​ - Regulatory ​ - Tax Perspective​ • Identify new ways to facilitate ease of distribution for funds domiciled and services from Ireland​ • Identify and work to remove any barriers or obstacles to the successful distribution of Irish funds in all key markets 4 4

Distribution Working Groups Distribution Steering Group Chair – Ken Owens Working Group Chair 1 Asia James Chew – HSBC 2 Europe Emma Conaty – Maples & Calder 3 Latin America Patrick Coughlan – PwC 4 Switzerland Keith Milne - Metzler Ireland 5 UK Len Sutton – JP Morgan 6 North America Chris Christian – Dechert 5 5

Distribution – Key outputs • 2015 Irish Funds Distribution Brochure • UK – Manager Survey and Roundtable, Platform/IFA engagement ongoing • Europe – Manager Survey and AIFMD Passport Feedback to CBI • Switzerland – Paper on Distribution • Asia – Distribution guides for China, Hong Kong, Singapore and Taiwan, Manager Survey – Distribution brochure in Japanese for Tokyo IF event • Latin America – Manager survey via video conference 6 6

Top Fund Distribution Markets in 2015 Europe Country No of Registrations 1 Germany 8,220 2 Switzerland 6,823 3 France 6,478 4 Austria 6,476 5 UK 6,058 Middle East Country No of Registrations 1 Bahrain 576 2 Qatar 127 Asia Country No of Registrations 1 Singapore 2,980 2 Hong Kong 1,177 Americas Country No of Registrations 1 Chile 1,507 2 Peru 743 Africa Country No of Registrations 1 South Africa 196 2 Mauritius 65 Source Lipper 7 7

Breakdown of the number of registrations by investment strategy (top 15 strategies) Source Lipper 8 8

Distribution footprint Source Lipper 9 9

Top 5 markets for the registration of Irish UCITS Ireland 2015 2014 2013 United 2,128 1,880 1,673 Kingdom Germany 1,919 1,708 1,577 France 1,728 1,343 1,225 Switzerland 1,568 1,371 1,130 Netherlands 1,459 1,275 1,179 Top 5 markets 8,802 7,577 6,784 Total No. of 20,147 16,904 14,586 Registrations Source Lipper 10 10

A busy morning ahead! Agenda Time Topic 8.30am Opening 8.40am Asia 9.20am Europe 10.00am Ireland 10.30am Latin America 11.00am Coffee break 11.20am North America 12.00pm Switzerland 12.40pm UK 1.20pm Closing remarks 1.30pm Networking lunch 11 11

ASIAN FUND DISTRIBUTION THE CHANGING LANDSCAPE Moderator: James Chew, Senior Product Manager, HSBC Panellists: Paul Price, Head of Distribution, Morgan Stanley Investment Management Shane O’Donovan, Hong Kong Legal Counsel, Old Mutual Global Investors Shay Lydon, Partner Asset Management Group, Matheson 13 13

Europe Perspectives on Evolving Distribution Challenges in Europe Moderator: Conor Owens, Head of Product & Marketing, Mediolanum International Funds Panellists: Lorcan Murphy, Director, Brook Green Capital Keith Saladanha, Head of EMEA Retail Sales Strategy, Blackrock Brian O’Rourke, Head of Manager Selection, Mediolanum Asset Management Sheenagh Gordon Hart, Principal, 2020 Regulatory Consulting 15 15

Mixed/Multi-Asset Fund Flows Dominate in Europe and Cross- Border Europe and Cross-Border Fund Net Flows 2015 Ytd-3/16 Equity [CATEGO 14% Other RY Other Bond 37% NAME] 25% 11% 38% [CATEGO [CATEGO RY RY Mixed NAME] NAME] 50% 9% 16% $401 Billion -$18 Billion Source: Strategic Insight Simfund; excludes money market funds, internal fund of funds and fund of hedge funds 18 18

Towards the Ninth Consecutive Year of $100+ Billion Flows into ETFs ETF Assets by Region ETF Flows by Region In $ Billion In $ Billion 400 3,500 350 3,000 300 2,500 250 2,000 200 150 1,500 100 1,000 50 500 0 -50 0 2008 2009 2010 2011 2012 2013 2014 2015 Mar- 2008 2009 2010 2011 2012 2013 2014 2015 Ytd- 3/16 16 Asia 18 -3 12 23 32 17 14 40 20 Asia 50 63 78 85 131 160 194 237 246 Europe/Cross-Border 78 52 48 22 33 18 61 80 12 Europe/Cross-Broder 153 248 310 300 371 419 461 513 528 US US 176 118 111 115 188 178 229 219 33 536 786 1,005 1,061 1,348 1,699 2,001 2,118 2,171 Source: Strategic Insight Simfund 20 20

Smart Beta: U.S. Leading the Way Smart Beta Fund AUM by Region In $ Billion 700 US Europe 600 500 400 300 200 100 0 2010 2011 2012 2013 2014 2015 2016E 2017E 2018E 2019E 2020E 21 21

Global Alternative Funds US vs. Non-US Assets US vs. Non-US Net Flows In $ Billion In $ Billion 90 600 US Non-US* US Non-US* 80 500 70 60 400 50 300 40 30 200 20 10 100 0 2011 2012 2013 2014 2015 Ytd-3/16 0 -10 2011 2012 2013 2014 2015 Mar'16 *Non-US data includes Local Europe, Cross-border, and Asia regions only. Source: Strategic Insight Simfund. 22 22

Top-Selling Alternative UCITS Funds Ranked by Ytd-3/16 Net Flows In $ Billion AuM Net Flows Rank Fund Name Manager Objective Launch Mar'16 Ytd-3/16 1 Old Mutual Global Equity Abs Return Old Mutual Group Alt - Market Neutral Jun-09 6.7 1.3 2 DNCA Invest Miuri Dnca Finance Alt - Market Neutral Dec-11 3.1 1.1 3 Schroder ISF European Alpha Abs Return Schroders Alt - Long/Short - Europe Feb-14 1.6 1.0 4 InRIS UCITS PLC-R Parus Innocap Alt - Long/Short - Global Jul-13 1.4 0.7 5 Amundi Fds Absolute Volatility Euro Equity Amundi Alt - Volatility Nov-06 1.8 0.7 6 Henderson Gartmore UK Abs Return Henderson Alt - Global Macro Mar-05 4.7 0.7 7 Nordea1 Stable Equity Long/Short Nordea Alt - Long/Short - Global Oct-12 1.3 0.6 8 Henderson UK Absolute Return Henderson Alt - Long/Short - UK Apr-09 1.9 0.5 9 BNY Mellon Absolute Return Equity BNY Mellon Alt - Long/Short - Europe Jan-11 3.1 0.4 10 PTR-Diversified Alpha Pictet Alt - Multistrategy May-14 1.6 0.4 11 Eurizon EasyFund Flexible Multistrategy Intesa Sanpaolo Alt - Multistrategy Jan-16 0.4 0.4 12 UBS (Irl) Inv Sel - Equity Opp L/S UBS Alt - Long/Short - Global Oct-10 0.9 0.4 13 Candriam Bonds Credit Opportunities Candriam Alt - Credit/Debt Aug-02 1.3 0.4 14 Amundi Fds Absolute Volatility World Equity Amundi Alt - Volatility Nov-07 1.1 0.4 15 UniAbsErtragnet Union Investment Alt - Multistrategy Apr-15 1.1 0.4 Total Above 32.0 9.3 Source: Strategic Insight Simfund; excludes money market funds, internal fund of funds and fund of hedge funds 23 23

Ireland Update on Distribution in Ireland Moderator: Munro O’Dwyer, Director – Tax, PwC Panellists: Eunice Dreelan, Head of Portfolio Management, Irish Life Diarmuid Kelly, CEO, PIBA 25 25

Distribution in Latin America Latin America Showcase Event Moderator: Patrick Coughlan, Manager, PwC Panellists: Liam Collins, Partner, Matheson Noel Ford, Independent Director, Governance Ireland 27 27

Introduction • Market Overview • Opportunities for Irish funds • Regulatory changes • Potential Obstacles 28 28

Market Overview • Seventh largest economy • Eight largest asset management industry • 2.8% of worldwide investment fund assets • As at April 2016 – domestic funds AUM €800 billion – 14,482 funds • Over 500 managers • Rapidly expanding upper and middle class – Middle class – 37.6% to 56% (2003 to 2013) – Upper class – 7.7% to 13.1% (2003 to 2013) – LatAm – highest concentration of HNW individuals • $17.3 billion FDI into Brazil in 2015 29 29

Expected growth for Latin America 30 30

Opportunities for Irish Funds • Post 2008 – investors move from unregulated to regulated product • Brazil regulatory changes • Managers seeking increased regional and sector diversification • Political uncertainty domestically • Underperforming economy 31 31

Regulatory Changes • CVM Resolution 555 • Relaxes rules on foreign investment • Facilitates investment in UCITS • Qualified or Professional investor funds – investment without limit in foreign investment funds – Qualified Funds – • at least 67% of NAV in foreign financial assets • Invested vehicles must be subject to extensive regulation and supervision by recognised foreign authority • Retail Funds – – Increase from 10% to 20% in investment in foreign assets 32 32

Obstacles • High returns from Brazilian domestic fixed income products • Distribution channels concentrated in big banks • Concentrated asset management market – 88% of AUM in top ten managers – consider alliances with local managers and distributors • Brand recognition • Complex tax regime 33 33

Questions? 34 34

Latin America – One Region – Multiple Markets 35 35