Contributing Firms:
It is not often that one can say that a particular year has been a game changing one, but the consensus from the panel in this latest issue of the Finance Dublin Funds Monitor is just that - and the reason is Ireland’s adoption of the ELTIF 2.0 regime, with particular Irish characteristics facilitated by the proactive role of the Central Bank of Ireland in delivering a new rulebook for the new product. Already, Ireland has accounted for one quarter of authorisations of ELTIFs in the EU is its first year of operation, compared to none under the operation of the old regime (ELTIF 1.0). The continued strong growth of the Irish domiciled investment funds industry, evidenced by the fact that net assets of Irish-domiciled funds reached EUR 4,482bn, in June 2024, the seventh consecutive quarter of growth in assets. and up by EUR399 bn, or 17.3% on the June 2023 total of EUR 3,820bn. However, while there is success, and optimism about the future, (as shown in this edition) there is also a clear and realistic sense amongst the contributors as well, with frank recognition on a number of fronts of the limitations of the irish funds industry, and indeed, limitations that is some instances are self-inflicted, due either to lethargy, lack of imagination, or simply inability to capitalise on clear opportunities. The Irish Government’s Report Funds 2030, published as one of the last acts of the outgoing administration, sets up a range of possibilities for the industry that an incoming administration committed to the future development of the Irish funds industry can facilitate, support, and encourage.
Since the coming into force of the enhanced ELTIF regime, ELTIF 2.0, Ireland has accounted for one quarter of new authorisations in the EU, as referenced in the August issue of Finance Dublin. With promoters and investors continuing to familiarise themselves with the updated ELTIF and with the Regulatory Technical Standards for open-ended ELTIFs being finalised, what are you expectations and hopes regarding the future development of ELTIFs business?
In the August issue of Finance Dublin, the CEO of Irish Funds, Pat Lardner, wrote, ‘A gap exists in Ireland’s provision of tools for managing investments in private assets. Closing this gap via a mixture of legislative and regulatory changes will ensure Ireland remains competitively strong, thus enabling the industry’s future growth. Please comment.
The (forthcoming) Irish Government's funds industry review, Funds Sector 2030 What are your expectations in relation to changes to and innovations in the investment funds and asset management infrastructure coming from the forthcoming Funds Sector 2030 review, and the extensive consultative process that has taken place with the industry this year, under the aegis of the Department of Finance?
With AIFMD II creating a harmonised framework for loan originating activities across the European Union, how well positioned is Ireland’s funds industry to take advantage of this enhancement to the market?
What are the prevailing challenges the funds industry faces currently and what solutions are being considered by market practitioners in response?
In terms of new product developments we are seeing advancements in areas including ETFs, tokenisation, crypto, retailisation of private funds, moves towards digitalisation of assets and funds, as well as native digital assets and funds. Looking at the pace of new product developments do you see the next 5 years as being critical to the development of the Irish, EU and global funds industries?
A recent survey* of senior executives at financial institutions identified private debt as the most likely to be the first asset class to be tokenised and routinely traded, while respondents identified infrastructure funds as the type of tokenised alternative assets their firms are most interested in. How has your firm approached the opportunities that asset tokenisation offers to date? In what asset types and services and from which types of investors do you expect to see the most activity in the area of tokenisation? *Global Digital Finance survey
In its response to the Central Bank of Ireland’s consultation paper on Macroprudential Policy for Investment Funds BlackRock writes, “We believe investor protection and financial stability are not just complementary objectives, but rather that investor protection is a necessary precondition for financial stability.” Do you agree, and do you think that prioritising investment funds for macroprudential regulation will have a material impact on overall financial stability in adverse market conditions?
ELTIF 2.0: Since the coming into force of the enhanced ELTIF regime, ELTIF 2.0, Ireland has accounted for one quarter of new authorisations, as referenced in the August issue of Finance Dublin. With promoters and investors continuing to familiarise themselves with the updated ELTIF and with the Regulatory Technical Standards for open-ended ELTIFs being finalised, what are you expectations and hopes on the future development of ELTIFs business?
Private assets: In the August issue of Finance Dublin, the CEO of Irish Funds, Pat Lardner, wrote, ‘A gap exists in Ireland’s provision of tools for managing investments in private assets. Closing this gap via a mixture of legislative and regulatory changes will ensure Ireland remains competitively strong, thus enabling the industry’s future growth.’ Please comment.
Irish funds industry statistical overview: Latest figures from the Central Bank of Ireland show that at the end of June 2024 net assets of Irish domiciled funds reached €4,482bn, the seventh consecutive quarter of growth in assets. Assets were up 9.8% on the end of 2023 total of €4,083bn, by €399 bn, and 17.3% up on the June 2023 total of €3,820bn. Can you comment on the trends?
Funds Sector 2030: What are your expectations in relation to changes to and innovations in the investment funds and asset management infrastructure coming from the forthcoming Funds Sector 2030 review, and the extensive consultative process that has taken place with the industry this year, under the aegis of the Department of Finance?
AIFMD II – Loan Origination: With AIFMD II creating a harmonised framework for loan originating activities across the European Union, how well positioned is Ireland’s funds industry to take advantage of this enhancement to the market?
Funds industry challenges: What are the prevailing challenges the funds industry faces currently and what solutions are being considered by market practitioners in response?
Fund product evolution: In terms of new product developments we are seeing advancements in areas including ETFs, tokenisation, crypto, retailisation of private funds, moves towards digitalisation of assets and funds, as well as native digital assets and funds. Looking at the pace of new product developments do you see the next 5 years as being critical to the development of the Irish, EU and global funds industries?
Tokenisation: A recent survey* of senior executives at financial institutions identified private debt as the most likely to be the first asset class to be tokenised and routinely traded, while respondents identified infrastructure funds as the type of tokenised alternative assets their firms are most interested in. How has your firm approached the opportunities that asset tokenisation offers to date? In what asset types and services and from which types of investors do you expect to see the most activity in the area of tokenisation?
Macroprudential policy: In its response to the Central Bank of Ireland’s consultation paper on Macroprudential Policy for Investment Funds BlackRock writes, “We believe investor protection and financial stability are not just complementary objectives, but rather that investor protection is a necessary precondition for financial stability.” Do you agree, and do you think that prioritising investment funds for macroprudential regulation will have a material impact on overall financial stability in adverse market conditions?