Since the foundation of the IFSC Ireland has been chosen by asset managers as the domicile of choice for their funds. There are now more than 6,200 regulated Irish funds authorised by the Central Bank of Ireland with over €1.9 trillion of assets under management. The growth in alternative fund launches has been a key driver of the continued success of the Irish funds industry. Over recent years we have seen growth in areas such as real estate and private equity.
It is clear that the global economic crisis has led to greater scrutiny of the international tax and regulatory environment, sparking a flurry of activity from national regulatory and tax authorities as well as supra national bodies such as the OECD and the EU Commission. The introduction of AIFMD, as well as Common Reporting Standard (CRS) and the OECD BEPS Action Plan has demonstrated the commitment of regulators and governments to creating a robust regulatory and tax environment in which asset managers must operate. Sophisticated investors and other key stakeholders have minimal tolerance of reputational and other exposures that a lesser approach could create.

The changes noted above - attitudinal as well as regulatory - have posed challenges for everyone, including asset managers. But despite this the asset management industry in Ireland continues to grow at a rapid rate.

This is because, driven by investor demand as well as tax and regulatory change, many offshore financial centre products have moved onshore into a range of regulated products. Asset managers now view the domicile of their fund products as conferring a competitive advantage. For the reasons set out above, Ireland is winning a significant amount of redomiciliations and fund launches by asset managers who understand the demand and need for well-established 'onshore' locations.

In the case of private equity structures, historically these were largely set up as unregulated limited partnerships and offered to highly sophisticated investors. Therefore, robust investor protection was not viewed as essential. Along with the need for efficient tax management, this traditionally resulted in private equity structures often being set up in offshore jurisdictions.

Now, however, these investors are attuned to the changing macro-economic environment and to the benefits they can derive from the changes discussed above - driving private equity managers increasingly towards regulated structures.

Ireland has long been front and centre as a jurisdiction of choice for asset managers; it is now well placed to deliver the same benefits to private equity managers. With further changes proposed for our existing suite of regulated structures to entice more private equity managers to Ireland, this trend should continue.