Contributing Firms:
The Finance Dublin Funds Monitor Second Quarter 2021
Roundtable

The Questions to the Panel

Question 1: New Product: Ireland - the ILP
Now that the ILP has been enacted and come into effect from February 1st, and with some predicting the first Irish ILP launch in H1, or even Q1, what particular benefits for promoters do you see it providing ? Please also indicate specific areas where you can see it having effect in clients’ business propositions. b) How would you evaluate it in comparison with legal frameworks/platforms available in the other principal jurisdictions offering investment funds platforms?

Question 2: ESG
With EU’s SFDR guidelines on the imminent agenda, and industry sources coming up with the idea of providing broader standards than envisaged in the SFDR guidelines, such as those of the CFA with its GIPS standard, (see below link) do you think that such broader approaches should also be embraced within EU27 and beyond it? Specifically do you think that offering the ability to deliver such wider standards on a voluntary level at individual institution level (such as your own) can help contribute to Ireland’s reputation as a jurisdiction that is not just about minimalist adherence to compliance standards such as SFDR?

Question 3: Covid Transition
Where do you see the largest permanent gains to the investment funds and asset management industry arising from Covid? With: (optional) referencing of the following aspects: - Realisation of the overall business process and its digitalisation - Strengthening of Cybersecurity, notably over distributed networks to enable WFH - Better marketing, Sales and Distribution Connectivity with Clients - Developments in Data Management and Capture

Question 4: Technology
Drawing on the experiences from within your own organisation, and from the lessons of the past year across the world, where do you see real advances in end client benefits from with the funds industry? Reference can be made to Big Data and AI in investment analysis, and, for example, Blockchain developments and applications in risk management solutions.

Question 5: Business Development
In which of the following areas do you see Asset Managers reaping the greatest rewards from outsourcing in the coming years, given increasing regulatory and risk demands in markets? Securities Lending FX Services Trade execution Collateral Management Transfer Agency Middle office Mancos or ACDs. Other

Question 6: Private Markets
Where does your company see developments in the next two years, citing examples from your company’s own business strategy. How can these offerings provide value for clients at the end of the distribution chain? Real Estate Infrastructure Private Equity Private Credit/Debt Other

Question 7: The short term, and longer term outlook

The Outlook I With interest rates low or negative globally, equities and real estate have been strong. This has been accompanied by strength in ETFs and private equity flows, yet issuers have been slow to resort to public markets, to the chagrin of regulators such as outgoing SEC chairman Jay Clayton. A possible sign of this since the start of 2021 has been the spectacle of small investors resorting to platforms such as Reddit and Robinhood and investments such as Gamestop to vent their frustrations, prompting a comment from another former SEC chair Harvey Pitt about the phenomenon: “You can sell garbage to the public as long as you say to the public ‘this is garbage’ and you’d be an idiot to buy it, but would you like to buy it”? How do you see the asset management industry playing the role it can to help bridge these potentially emerging gaps?

The Outlook II What do you think are the major risks for the industry in the next 3 years? (please comment referencing the below aspects) . The Impact of Social media on Investment Markets The Impact of Competition on Fee margins Failure to integrate ESG into workable business models Disruption to mainstream institutions by challenger funds promoters, boutiques, new entrants Cyber Security threats Post Brexit, in Europe, financial services regulatory nationalism (like the reported ‘vaccine nationalism’ we saw in early 2021). Distortion of Investment Markets by the Covid-19 economic recovery Distortion of Business Management and Cybersecurity by Covid-19 reorganisation matters

8. Ireland – Jurisdictional Overview.
Fund Management Companies (FMCs) in Ireland were asked by the Central Bank of Ireland to review, discuss and implement (at board level) the findings of the (C86) Thematic review of the governance framework for FMCs in Ireland by the end of Q1 2021. What conclusions going forward do you think firms in general might usefully implement to strengthen governance in the jurisdiction in the light of the Bank’s own observations, as set out in its ‘Dear CEO’ letter of October 20th 2021 ?

Funds Monitor Roundtable - The Answers

New Product: Ireland-the ILP

Question: Now that the ILP has been enacted and come into effect from February 1st, and with some predicting the first Irish ILP launch in H1, or even Q1, what particular benefits for promoters do you see it providing ? Please also indicate specific areas where you can see it having effect in clients’ business propositions. b) How would you evaluate it in comparison with legal frameworks/platforms available in the other principal jurisdictions offering investment funds platforms?

ESG

Question: With EU’s SFDR guidelines on the imminent agenda, and industry sources coming up with the idea of providing broader standards than envisaged in the SFDR guidelines, such as those of the CFA with its GIPS standard, (see below link) do you think that such broader approaches should also be embraced within EU27 and beyond it? Specifically do you think that offering the ability to deliver such wider standards on a voluntary level at individual institution level (such as your own) can help contribute to Ireland’s reputation as a jurisdiction that is not just about minimalist adherence to compliance standards such as SFDR? https://www.cfainstitute.org/en/ethics-standards/codes/esg-standards


Covid Transition

Question: Where do you see the largest permanent gains to the investment funds and asset management industry arising from Covid?

In this issue

In this issue

A brave new world for funds
The scope of change in funds and investment is captured as we advance further into 2021 by the contributions of seven leading figures in ireland’s funds industry, representing seven leading firms active in the Irish funds industry in this, the second issue of the Finance Dublin Funds Monitor. The challenges and opportunities arising through rapid tech and organisational change that is sweeping fund management is captured in their reponses to 10 contemporary questions posed by Finance Dublin in the first quarter 2021.


Funds Monitor Roundtable - The Answers

Technology

Question: Drawing on the experiences from within your own organisation, and from the lessons of the past year across the world, where do you see real advances in end client benefits from with the funds industry? Reference can be made to Big Data and AI in investment analysis, and, for example, Blockchain developments and applications in risk management solutions.


Business Development

Question: In which of the following areas do you see Asset Managers reaping the greatest rewards from outsourcing in the coming years, given increasing regulatory and risk demands in markets: Securities Lending; FX Services Trade execution; Collateral Management ; Transfer Agency; Middle office; Mancos/ACDs; ‘Other’?


Private Markets

Question: Where does your company see developments in the next two years, citing examples from your company’s own business strategy. How can these offerings provide value for clients at the end of the distribution chain: Real Estate; Infrastructure; Private Equity; Private Credit/Debt; ‘Other’ ?


The short term, and longer term outlook

Question: With interest rates low or negative globally, equities and real estate have been strong. This has been accompanied by strength in ETFs and private equity flows, yet issuers have been slow to resort to public markets, to the chagrin of regulators such as outgoing SEC chairman Jay Clayton. A possible sign of this since the start of 2021 has been the spectacle of small investors resorting to platforms such as Reddit and Robinhood and investments such as Gamestop to vent their frustrations, prompting a comment from another former SEC chair Harvey Pitt about the phenomenon: “You can sell garbage to the public as long as you say to the public ‘this is garbage’ and you’d be an idiot to buy it, but would you like to buy it”? How do you see the asset management industry playing the role it can to help bridge these potentially emerging gaps? Longer term, what do you think are the major risks for the industry in the next 3 years? (please comment referencing the below aspects) . The Impact of Social media on Investment Markets The Impact of Competition on Fee margins Failure to integrate ESG into workable business models Disruption to mainstream institutions by challenger funds promoters, boutiques, new entrants Cyber Security threats Post Brexit, in Europe, financial services regulatory nationalism (like the reported ‘vaccine nationalism’ we saw in early 2021). Distortion of Investment Markets by the Covid-19 economic recovery Distortion of Business Management and Cybersecurity by Covid-19 reorganisation matters.


Ireland – Jurisdictional Overview.

Question: Fund Management Companies (FMCs) in Ireland were asked by the Central Bank of Ireland to review, discuss and implement (at board level) the findings of the (C86) Thematic review of the governance framework for FMCs in Ireland by the end of Q1 2021. What conclusions going forward do you think firms in general might usefully implement to strengthen governance in the jurisdiction in the light of the Bank’s own observations, as set out in its ‘Dear CEO’ letter of October 20th 2021?


The ILP for private asset funds?

Question: Following the updates to ILP, CBI share class guidance updates for closed ended QIAIFs and introduction of Depositaries of Assets other than Financial Instruments (“DaoFI’s”) Ireland now presents itself as a compelling choice for domiciling private asset funds. What key considerations should Managers consider when choosing Ireland for the first time?


Analysis - Special Feature

How is COVID-19 impacting the UK and European real estate investment

A transformation is underway: as an asset class, real estate currently sits in an attractive position with income yields well above those of corporate bonds. "If this is the new normal, and low inflation and low-interest rates persist, then investor appetite for real estate is likely to stay strong," said Anne Breen, Head of Investment Strategy (Real Estate) at Aberdeen Standard Investments during a recent RBC Investor & Treasury Services (RBC I&TS) webinar.1 Private capital, principally real estate, however, is not immune to today's challenges. Managers with exposures to certain real estate sectors, such as retail, or markets whose recoveries are likely to be protracted may find the start of 2021 difficult.


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