www.irishfunds.ie
Irish Funds Frankfurt Seminar 2016 Hosted by: 2 2 www.irishfunds.ie www.irishfunds.ie
Welcome Mr Markus Buechter Deutsche Bank AG www.irishfunds.ie
Introduction Mr Frank Dornseifer Managing Director Bundesverband Alternative Investments e.V. (BAI) www.irishfunds.ie
BAI – the cross-asset and cross-product association for Alternative Investments BAI/Irish Funds Event: Ireland meets Germany: new trends in the European alternative funds industry FRANKFURT, 12 September 2016 www.irishfunds.ie
BAI – key facts (1) • Founded 1997 in Bonn – based in Germany, European focus. • At present, BAI counts 165 member companies from all areas of the alternative investment industry. • BAI is a “ catalyser ” between German institutional investors and suppliers of alternative investment products worldwide (infrastructure, private equity, hedge funds, real assets, etc.). Our goal is to enhance the environment for German professional investors when diversifying their financial assets into Alternative Investments, especially as many of those investors are responsible for safeguarding long-term retirement pensions. 6 www.irishfunds.ie
BAI – key facts (2) • Another objective of the association is to increase the awareness level and the understanding of these asset classes and strategies in public (c.f. BAI Fact Sheet series, BAI science award). • 2012 establishment of BAI Investors Committee with representatives of relevant investor groups (insurance companies, pension funds, pension schemes, corporates, etc.). 7 www.irishfunds.ie
CONTACT RA Frank Dornseifer Managing Director Bundesverband Alternative Investments e.V. (BAI) +49 228 969870 dornseifer@bvai.de www.irishfunds.ie
Ambassador’s Address H.E. Michael Collins Ambassador of Ireland to Germany www.irishfunds.ie
Irish Funds Overview Kieran Fox Director – Business Development Irish Funds www.irishfunds.ie
Who/what we are…. • industry association for all aspects of regulated cross border funds in Ireland – representative function – promotional function • 113 member firms, located both in and outside Ireland • key link to the authorities & policy makers in Ireland and beyond • the industry’s representative in Europe and globally • a platform for collaboration, information sharing and driving outcomes & improvement www.irishfunds.ie
The Irish funds industry • supports managers from all over the world Fund Manager • full range of services for Irish domiciled Irish funds as well as providing expert services Administered Funds for funds domiciled outside of Ireland Irish Domiciled Non Domiciled • solutions are provided to managers Funds Funds across the full spectrum of investment strategies UCITS AIFs www.irishfunds.ie
Long track record of delivery Total Assets under Administration, Euro billions 4,000 3,806 3,760 3,375 3,500 3,000 2,722 EUR Billion 2,500 2,199 1,883 1,886 2,000 1,394 1,398 1,443 1,500 965 1,000 838 1,664 1,899 1,917 636 1,227 1,344 488 759 500 964 807 748 728 646 584 434 362 0 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 June- 16 Net Assets Domiciled Net Assets Non Domiciled Source: Central Bank of Ireland and Irish Funds www.irishfunds.ie
Scale, Diversity and Momentum to support you Irish Domiciled Funds – Product Breakdown Euro billions 2,500 2,500 1,917 2,000 2,000 1,899 1,664 EUR Billion 1,500 1,500 1,344 EUR Billions 1,227 1,055 964 1,000 1,000 807 748 728 1,447 646 584 968 1,275 1,447 362 434 1,044 500 500 759 759 285 343 463 583 647 517 597 0 0 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 June- 16 UCITS Non Ucits Source: Central Bank of Ireland and Irish Funds www.irishfunds.ie
Irish Domiciled Funds: AIFs Qualifying Investor Alternative Investment Funds (QIAIFs) QIAIFs Net Assets and Number of Funds 450 2,500 400 1,902 1,961 1,965 2,000 350 1,849 1,664 300 EUR Billion Total No. of Funds 1,500 1,420 250 1,174 1,217 1,115 200 1,028 385 369 1,000 826 317 150 648 235 541 204 100 457 182 500 153 113 109 50 94 93 67 44 28 0 0 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 June- 16 Net Assets (EUR Billion) Number of Funds Source: Central Bank of Ireland www.irishfunds.ie
German Promoters of Irish Funds 7 German promoters of with 96 Irish domiciled funds & $47 billion in AUM 7 German promoters of with 96 Irish domiciled funds & $47 billion in AUM 81 UCITS funds 15 AIFs 81 UCITS funds 15 AIFs Asset Allocation of German Managed Irish Funds 3% 2% 1% 0% 3% 0% Cash/Short-Term 7% Exchange Traded Equities Equities Bonds 10% Mixed Equities/Bonds Convertibles Alternative Investment 73% Private Equity/Venture Capital Fund of Funds Source: Monterey Ireland Fund Report 2015 www.irishfunds.ie
What does the industry in Ireland provide? • EU Single Market Access: product & service passports 7th IMD WORLD • Investor Access: European Market and beyond COMPETITIVENESS 2016 YEARBOOK • Service Excellence • Low Costs 1 st FLEXIBILITY AND • Low Tax Environment ADAPTABILITY OF PEOPLE • Regulatory Environment • Commitment from Government 1 st IN EUROPE FOR COMPLETION OF • 3 RD LEVEL EDUCATION Infrastructure : language/legal/telecommunications www.irishfunds.ie
Brexit: Beyond the Referendum on EU Membership www.irishfunds.ie
Managers’ needs pre/post vote have not changed Objective to grow/scale their businesses cross-border by accessing passports for products and services Effective EU based national regulatory and taxation regimes are vital enablers Expert knowledge/skills across a range of providers covering the full breadth of investment strategies/asset classes very important Being able to conduct business efficiently is expected (language, legal system, service culture, cost) Ireland has done this very successfully for over 20 years www.irishfunds.ie www.irishfunds.ie
Why Ireland? Distribution and investor support Global Distribution of Irish Funds: 70 countries Sales Registration: Top 5 Markets for Irish UCITS 17% 24% 18% 22% 20% • broad mix of institutional and retail clients United Kingdom Germany • 30 languages supported France Switzerland • 23 currencies supported Netherlands Source: Lipper, PwC & Irish Funds, 2015 Source: Lipper, PwC & Irish Funds, 2015 www.irishfunds.ie
UK Referendum & “Brexit” • The outcome was a surprise to most • Things which are certain/clear: • Ireland remains a committed member of the EU • Irish domiciled funds’ access to the EU single market unchanged • UK remains a member of the EU for the foreseeable future • Big questions to which there are not yet clear answers • UK’s status at the end of the process? • When will the process start? • How long will the process last? • Questions we are being asked by managers - how can they work with Ireland to retain access to the EU in providing?: • Direct portfolio management services • Funds • Our members are helping managers and providing solutions www.irishfunds.ie
Assumption risk Assumption/ Reality Impact Noise Pre Will be close but UK will Narrow vote to leave Most entities Referendum vote to remain in unprepared Post Article 50 notification Seems to be moving Pre-exit period will Referendum will happen very quickly further away be very lengthy Passports and access Depends on strategies Staying informed remain unchanged until you manage/delivery important to know the UK actually leaves mechanisms/target where you need to act so little to do right now market(s), your now and to minimise business model future assumption risk and what clients want UK won’t implement EU Still full EU members Too early to tell regulations going and part of ESMA Equivalence as a 3 rd forward Country highly relevant www.irishfunds.ie www.irishfunds.ie
Key Focus Areas • UCITS – Product based passport linked to EU domicile – No equivalence or 3 rd Country rules – Pre-existing routes remain open • AIFMD – Two passports (management & marketing) – linked to manager – Passport (EU AIFMs) & Private Placement (Non-EU AIFMs) co- exist at present – 3 rd Country access, equivalence still a work-in-progress which complicates matters • MiFID – Passporting rights attach to EU based firms – Which services/clients are UK based MiFID entity working with? – MiFID2 on the way – again take care www.irishfunds.ie www.irishfunds.ie
Our activity since the vote • Engage with Irish government, regulator, agencies – Funds industry high on the agenda – Ireland ready and able to provide help to those who need it • Alongside our 39 Working Groups we are breaking the “big” question into a number of smaller ones – Identifying/working through positions which may arise in the negotiations – Develop specific communication and information aids – Engage with EU colleagues • Meeting with our members / handling inbound enquiry • Speak to other stakeholders / peers – Listening & acting responsibly • Ensure we can assist managers irrespective of their starting point www.irishfunds.ie www.irishfunds.ie
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