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FUNDS


Dublin. Left: the Cayman Islands


Ireland’s net asset value of domiciled funds reached an all-time high of €963bn in December 2010


also expected to lead to major changes in the geographic mapping of fund vehicles and investment advisers – and, again, the Channel Islands may benefit.


Transatlantic shift In the British Virgin Islands, the Securities and Investment Business Act (2010), which came into force in November 2010, has required all investment firms to obtain licenses from the Financial Services Commission (FSC), and this is expected to lead to an exodus of investment advisers seeking lighter regulation. Fund vehicles, based in less-regulated


offshore centres such as the Cayman Islands, British Virgin Islands and Bermuda, have already been seeking domicile in European centres with better regulation to enhance their appeal to EU investors. “We have seen a couple of funds


migrating to Guernsey from Bermuda, and also from the Bahamas,” says Davy. Devenport, however, points to possibly


the main beneficiary of the legislation. “We have not really seen a big movement away from the Cayman Islands to Jersey,” he says.


34 businesslife.co April/May 2011


“Although a small number of funds have relocated to Ireland.” Indeed, despite its economic difficulties,


Ireland has been a key beneficiary of the relocation of fund vehicles from the Caribbean. Its net asset value of domiciled funds reached an all-time high of €963bn in December 2010 – up nearly a third from €748bn at the end of 2009. “The main focus of our fund activity in


Ireland is as a domicile for investment fund entities and the servicing of those entities,” explains Gary Palmer, Chief Executive Officer of the Irish Funds Industry Association. “About 43 per cent of hedge fund vehicles are serviced in Ireland, including a large proportion of those domicile in the Caribbean.” He explains that growing awareness of


Ireland’s expertise in servicing alternative investments has helped it attract fund vehicles from offshore centres. “In December 2009, we also introduced new legislation to ease the redomiciling of investment funds into Ireland, and this clearly assisted funds looking to move here. There is also a growing trend towards greater regulation, and because of investors’


demands here, fund managers have sought to set up fund vehicles in Ireland.” In 1996, Ireland also started offering


incoming funds the opportunity to structure as Qualifying Investor Funds, regulated investment fund vehicles, which, it claims, already comply with most AIFMD requirements. “This was the first regulated vehicle for


alternative investment funds, and over the last 15 years the framework has evolved and developed,” adds Palmer. However, although Ireland has a small


domestic fund management industry, and would like to attract more fund managers, it is unlikely to benefit from any relocations driven by AIFMD. “Ireland needs to comply with AIFMD, and right now many funds will be wondering whether or not they need it, so there is still uncertainty,” says Kirkby. One thing that does seems quite certain,


however, is that the map of the global funds industry is set to continue to change for the next couple of years at the very least. n


Liz Salecka is the former Editor of European Banker


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