May 2012

FUND SERVICES (IRELAND): Irish influence

IrelandIreland’s reputation in fund management and services is still rebuilding after the financial crisis, Nicholas Pratt profiles ten people who are among those most able to influence the country’s image abroad. Ireland’s funds industry has continued to grow over the past four years despite the dire state of the domestic economy and banking sector. This is largely because the funds industry’s focus is on establishing Ireland as a pan-European jurisdiction to rival Luxembourg. However, while the funds industry may be insulated from its domestic woes, it is not immune. The decision to seek a European Union/International Monetary Fund bailout in 2010 could have ramifications for the sector – not least the threat to the 12.5% corporation tax rate that has attracted so many international financial firms to the country. The industry’s efforts to attract support from overseas will be crucial as will the role of the regulator as it seeks to balance accommodating legislation with robust supervision. This list of professionals is not designed to be a definitive ranking but to reflect the challenges and opportunities facing the industry, to recognise the years of work done over the past 20 years to establish Ireland as an international funds centre, and to underline the challenges that lie ahead in ensuring Ireland continues to compete with long-term rival Luxembourg and other European domiciles as the jurisdiction of choice for international investment managers. Patrick Lardner – chairman, Irish Fund Industry Association
Lardner was appointed as the IFIA’s new chief executive in March 2012, taking over from Gary Palmer, who had held the role since 1999. At a time when many of Ireland’s population are heading to Australia, Lardner is returning after a six-year stint as a managing director at Melbourne-based Hastings Fund Management. Lardner’s appointment comes at an important time for the Irish funds industry. The IFIA has more than 100 members and associate members and is responsible for more than €1.3 trillion of assets, but many feel that the association has underperformed in relation to its Luxembourg equivalent Alfi (Association of the Luxembourg Fund Industry) and they will be looking to Lardner to redress the balance. John Bruton, chairman, Irish Financial Services Centre
It is 25 years since the IFSC was established on the north bank of the river Liffey, and it remains as important as ever in attracting international financial services firms on the promise of low corporation tax and availability of an experienced, well educated work force. Bruton has been chairman since May 2010 and has been busy promoting Ireland overseas as a place to invest in. Recently, he was in Boston and New York during the St Patrick’s day weekend, heading up a delegation of senior figures in the funds industry. As a former Taoiseach (Irish prime minister), Bruton will be well acquainted with the importance of St Patrick’s day missions to the US, and his ambassadorial cheerleading role in general. Deirdre Power – partner, Deloitte
Taxation continues to play a crucial role in the Irish funds industry and the number of  well established advisers in Dublin are of continued importance to the industry’s success. As a tax partner of more than ten years, Power is a respected and experienced figure who not only advises investment management clients but also holds a number of roles in industry bodies at a national and international level. She is a former chair of the IFIA and has been appointed to the Taoiseach’s Pan European Pensions Taskforce and the Expert Group on the taxation of income from savings established by the European Commission. Other advisers of note include IFIA chairman Ken Owens of PwC and Gareth Harman of Ernst & Young, who chairs the industry’s technical committee. Michael Jackson – partner, Matheson, Ormsby, Prentice
Wherever new regulation is involved, lawyers are sure to be there, too. In 2010, a number of international law firms set up offices in Dublin hoping to benefit from the new legislation for redomiciling funds in Ireland. But one of the most important lawyers in the Irish funds industry is Michael Jackson, partner in the asset management and investment funds group at Irish law firm Matheson, Ormsby, Prentice. Jackson has been much to the fore in the development of new legislation and is actively involved in both the IFSC as chairman of the legislative sub-group and the IFIA, where he was chairman between 2009 and 2010. He is also considered one of the most knowledgeable sources on Ucits funds. Willie Slattery – executive vice president, State Street
If anyone could be considered the father of the Irish funds industry, few would have stronger claims than Slattery. He spent 23 years at the Central Bank, including eight years overseeing the IFSC from its inception in 1987 before joining Deutsche Bank in London. He returned to Ireland in 2001 with State Street, where he currently heads up the group’s asset servicing business in Ireland, Luxembourg and the Channel Islands. He continues to be an active participant in industry bodies and is currently the chairman of the executive steering committee of the IFSC. Robert Richardson – chief executive, Pioneer Investment Managers
Pioneer is one of the largest fund managers operating in Ireland employing over 400 full-time staff and 100 investment professionals in its Dublin office and managing more than €165 billion in assets. As chief executive, Richardson was responsible for establishing Pioneer's initial presence in Ireland which now serves as the firm's European investment hub. Richardson is also a director of the Irish Association of Investment Managers, whose chief executive Frank O’Dwyer deserves a mention, having previously served as the association’s chairman, and is also part of the Taoiseach's IFSC Clearing House Group. Eoin Fitzgerald – managing director, Morgan Stanley
Alongside Slattery, there are others, such as Carin Bryans at JP Morgan and Sean Pairceir at Brown Brothers Harriman, that have developed an international role and responsibility as a result of a long and distinguished career in the Irish funds industry. Fitzgerald, who heads up Morgan Stanley Fund Services, may have fewer years in the industry but as a council member of the IFIA and current chair of its Alternative Investment Committee, he is leading some important work on the Alternative Investment Fund Management Directive (Aifmd) which could prove to be vitally important in encouraging more managers to launch or redomicile funds in Ireland. Sean Casey – managing director, New Ireland Assurance
New Ireland is one of the largest institutional investors in Ireland with more than €10 billion of funds under management and a 20% market share of new business. Owned by the Bank of Ireland, New Ireland is also a 17% shareholder in the National Asset Management Agency, a special purpose vehicle created by the Irish government in 2009 to act as the country’s “bad bank”. Casey was promoted from finance director to managing director at New Ireland Assurance in January 2010. With extensive experience of the life and pensions market, Casey is one of the most senior figures in the institutional investment industry and is a regular presence on industry boards, including membership of the Consultative Industry Panel to the Financial Regulator. Matthew Elderfield – head of financial regulation, Central Bank
Well-balanced regulation is crucial to the reputation of the Irish funds industry. While the regulator has been receptive to the creation of new fund types such as the qualified investor fund, the structure’s robustness was called into question in the aftermath of the financial crisis. Elderfield, a former chief executive officer at the Bermuda Monetary Authority and department head at the UK Financial Services Authority, was appointed in October 2009 at a time when Ireland’s domestic banking sector was in chaos and the regulator was under fire for its lacklustre investigation into the secret directors’ loans scandal at Anglo Irish Bank. Since his arrival, Elderfield showed he was not afraid to make tough decisions when he placed Quinn Insurance into administration. He has also overseen the launch of Prism, a new risk-based supervision model for Ireland. Although much of his focus remains on the embattled domestic banking sector as opposed to the funds industry, the ongoing investigation into the collapse of Dublin-based investment firm Custom House Capital will be viewed with interest. Lou Jiwei – chairman, China Investment Corporation
Ireland’s funds industry may be chiefly concerned with attracting US asset servicing firms to its shores and establishing itself as an international distribution centre for Ucits funds. But, like everyone else, it is also looking to attract investment in its own assets from emerging markets, such as China. The memorandum of understanding signed by the National Treasury Management Agency and China Investment Corporation International in March allows the subsidiary of China’s sovereign wealth fund to invest in a range of Irish assets, including infrastructure and property. Ireland will be hoping that the agreement sets up a framework for future co-operation with China and a flourishing two-way investment process. ©2012 funds europe

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