Ireland set to overtake US and UK as fund domicile

Ireland is expected to overtake the US and the UK as a domicile for product distribution within the next five years, according to a survey published today.

The State Street 2018 Fund Strategy Survey found that 55% of asset managers plan to domicile their funds in Ireland over the next five years: a rise of 13% from 42% of fund firms currently.

The increase will propel Ireland from its current fourth position to second, overtaking the US and UK which will fall to fourth and third position respectively from their current second and third positions.

In the survey of 250 asset managers globally, Luxembourg is expected to comfortably retain its position as the top domicile for funds, with the proportion of asset managers saying they would use the grand duchy as a domicile for their products rising from 46% today to 62% by 2023.

The survey also found that 64% of respondents are planning to launch cross-border products over the next five years.

As the industry prepares for the still unclear implications of Brexit, 73% of respondents said they had either already taken action or are in the process of revising their distribution strategy.

A further 19% of respondents said they expect to revise their distribution model within the coming five years.

In addition, 28% of firms have either already hired staff in a new location or are in the process of doing so in preparation for the UK’s departure from the EU – with a further 54% expected to make hires in new locations within five years.

“As cross-border products are increasingly seen as the optimal path for growth, asset managers are looking for domiciles with an established regulatory environment,” said David Suetens, head of State Street in Luxembourg.

“Locations such as Luxembourg and Ireland that can meet regulatory obligations confidently and efficiently are seen as the natural choice by asset managers, allowing them to mitigate risk, achieve economies of scale and reach investors globally.”

©2018 funds europe

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