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

The Questions to the Panel

Question 1: Market trends
With Irish domiciled investment funds reaching an all time record NAV value of €3,683bn at end-June 2021, as shown in the attached statistical release by the Central Bank, it seems that the jurisdiction remains very successful, but buoyed by strong markets globally. This seems apparent, given the strong performance of equity related funds, as distinct from MMFs, which were relatively static in the year to June. Could you comment on the trends? Note for Respondents: Investment Fund Statistics – Q2 2021 The attached chart shows that equity assets have risen fastest, followed by bonds, and, MMFs, traditionally a big component of the Irish total, virtually at a standstill over the previous 12 months.

Question 2: Irish Fund Structures
The Central Bank latest data also show the latest (mid year) figures for Specialist Irish funds structures, with, by end June 385 ICAVs, 25 CCFs, and 6 already established (by then) Irish Limited Partnerships. Fund data for June 2020 Could you comment on this, making reference perhaps to the relative advantages of the different structures, e.g. the expense of establishing CCFs, the success of ICAVs, and the progress to date of ILPs?

Question 3: ETFs
One trend in the market recently has been the conversion of traditional UCITS to ETPs/ETFs. Do you think that at the retail end, that traditional UCITS will remain as popular with investors, and will there be an increasing demand for low cost ETFs, real assets and other alternatives?

Question 4: Fund transfer process
Speeding up the fund transfer process across Europe and the UK is fast becoming the focus of regulators and fund firms as better investor outcomes become increasingly important. A survey published last month (by Calastone) of 32 leading fund managers and distributors across Europe and the UK found fund transfers delays are common place and unnecessary. Many firms are searching for ways to overcome the need for manual processing. The majority of firms cite connectivity and standardisation as the major issues. Can you comment?

Question 5: ESG
ESG: ‘Greenwashing’, and new regulatory requirements and references to ESG – e.g. at EU level are continually developing. What are your overall observations on the trends that the asset management industry must address most urgently for the coming twelve months?

Question 6: Regulation
Regulation. With PCF regulations (regarding Pre Approved Functions, notably in the asset management sphere) just issued by the Central Bank in the last month, and SEAR legislation in the works, what priorities are and should the industry be making to address the future requirements of the industry?

Question 7 - 8: Two ‘Wildcard’ Questions. Questions of your Choice.


Funds Monitor Roundtable - The Answers

Irish market trends

With Irish domiciled investment funds reaching an all time record NAV value (of €3,805bn at end-August 2021), it seems that the jurisdiction remains very successful, but buoyed by strong markets globally. This seems apparent, given the strong performance of equity related funds, as distinct from MMFs, which were relatively static in the year to June. Could you comment on the trends?


The Irish vehicles

Latest Central Bank data show the (mid year) figures for Specialist Irish funds structures, with, by end June 385 ICAVs, 25 CCFs, and 6 already established (by then) Irish Limited Partnerships. Could you comment on this, making reference perhaps to the relative advantages of the different structures, e.g. the expense of establishing CCFs, the success of ICAVs, and the progress to date of ILPs?


AIF Distribution

Changes to EU law on the cross-border distribution of AIFs came into effect on 2 August 2021. How do you see these changes impacting Ireland?


Technology

With technology holding the potential to redefine the investment industry in the coming years, where should asset managers focus their digital investments to modernise their architecture? To what extent will open architecture platforms play a role in delivering fit for purpose applications and services?

In this issue

In this issue

On the crest of the wave
The roundtable panel in this latest Quarterly edition of the Finance Dublin Funds Monitor gives insight into the latest investment fund market trends, on fund structure, fund type and investment strategy levels, as Irish-domiciled investment funds reach an all time record NAV. The range of Irish fund structures and the different roles they play as part of Ireland’s funds eco-system are also examined. Our experts also comment on the all-encompassing topic of ESG as regulators and investor demand continue to reshape the asset management industry’s approach and drive innovation in the services provided across front, middle and back office operations. Other major topics covered include: regulatory changes and the early steps that can be taken by FSPs and executives; outsourcing, technology and the impact of changes to AIF marketing rule


This Month's Roundtable - The Answers

Outsourcing

What is the current status of the Proposed Central Bank Guidance on Outsourcing? What are the various implications for Fund Service Providers and their delegation arrangements?


ETFs

One trend in the market recently has been the conversion of traditional UCITS to ETPs/ETFs. Do you think that at the retail end, that traditional UCITS will remain as popular with investors, and will there be an increasing demand for low cost ETFs, real assets and other alternatives?


Fund transfer process

Speeding up the fund transfer process across Europe and the UK is fast becoming the focus of regulators and fund firms as better investor outcomes become increasingly important. A survey published last month (by Calastone) of 32 leading fund managers and distributors across Europe and the UK found fund transfers delays are common place and unnecessary. Many firms are searching for ways to overcome the need for manual processing. The majority of firms cite connectivity and standardisation as the major issues. Can you comment?


Diversity and Inclusion

Traditional activities to foster diversity, equity and inclusion usually assume that people work together in the same physical space. COVID-19 crisis, however, challenged that assumption forcing companies across the globe to find new ways to create inclusive and engaging virtual/hybrid working environment. Drawing on the experiences from your organization, in what way has the virtual work environment impacted diversity and inclusion efforts and what has proven successful in creating a diverse and inclusive work environment during the COVID-19 crisis?


ESG

'Greenwashing’, and new regulatory requirements and references to ESG – e.g. at EU level are continually developing. What are your overall observations on the trends that the asset management industry must address most urgently for the coming twelve months?


Regulation

With PCF regulations (regarding Pre Approved Functions, notably in the asset management sphere) just issued by the Central Bank in the last month, and SEAR legislation in the works, what priorities are and should the industry be making to address the future requirements of the industry?


COP26: expectations of a turning point

The scale of the transition to a decarbonised global economy is enormous, writes State Street’s Richard Lacaille, but world leaders should look at the 19th and early 20th century roll out of railway systems for inspiration in transforming the energy system, he says.


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