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  • Andy Bissell

28% Growth of Irish Domiciled Funds Fuelled by Equity Products

New findings from the 27th edition of Monterey Insight Ireland Fund Report, the independent fund research company, reveal the market shares of all service providers in Ireland’s funds industry.

Irish domiciled funds rose by 28.1% reaching a market size of US$4,242.7bn as at 30th June 2021 (from US$3,311.8bn in 2020). The number of Irish funds and sub-funds has grown by 5.0% to 5,998 (from 5,715 in 2020).

Fund assets of non-domiciled funds and sub-funds reached US$1,584.0bn. Cayman Island vehicles hold the top position with US$592.9bn. A significant contribution to the non-domiciled business has been the inclusion of Luxembourg funds this year which contribute US$439.3bn with over 800 funds and sub-funds.

The overall total number of sub-funds serviced in Ireland, increased by 11% and reached 10,433 from the 9,402 of the previous year.

A surprising statistic was, for the first time among domiciled funds, equity products overtaking the ever popular money market funds. Equity funds enjoyed a stunning 43% increase compared to the previous year reaching US$783.7bn, a positive growth of US$227.0bn of assets with the top 50 sub-fund performers accounting for US$100.9bn of this increase. Money market funds take the second rank this year with a 4% increase to reach US$724.3bn, followed by bonds in third place with US$671.8bn.

For domiciled funds, ETF Equities surpass all above performances and come first in terms of asset increase with +76% totalling US$660.2bn (+ US$284.2bn compared to the previous year).

Unsurprisingly, this year again ESG continues to be on the rise and tops US$239.0bn for domiciled funds.

Over 700 new Irish funds and sub-funds were launched during the period accounting for US$127.1bn. Within these, new Irish schemes only (including their sub-funds) reached US$36.2bn from just in excess of 170 funds and sub-funds.

Among the largest fund promoters/initiators of Irish domiciled schemes, the top three positions remain the same as last year: BlackRock Financial Management maintain their lead and increase their total net assets to US$949.5bn, followed by PIMCO with US$246.1bn and Vanguard Group in third position with US$218.0bn.

The top three positions for Management Company/AIFM, among Irish schemes, including Irish UCITS and Irish Non-UCITS, results in the same ranking as for promoters/initiators above.

State Street maintain their top position in all categories, being the largest player for administration, custody and transfer agency services. and increasing their assets for each role: assets under administration US$1,770.8bn, custody US$1,651.0bn and transfer agency US$1,763.6bn.

Tadhg Young, Country Head, Ireland at State Street, commented:

“State Street is very pleased for yet another year running to rank first across all of our key focus areas of administration, custody and transfer agency services. That is great credit to our talented staff and to the confidence placed in State Street by clients with funds representing all asset classes and product types such as ETF’s, money market, tax transparent and ESG funds as well as hedge and private market vehicles. It is also a strong vote of confidence in Ireland as a trusted financial centre for onshore and offshore funds and from which State Street has been able to help clients distribute their products internationally.”

In more detail, for fund administration services across both domiciled and non-domiciled funds, State Street Fund Services (US$1,770.8bn) continue to lead in the top spot. Northern Trust (US$713.3bn) maintained their second position, followed as last year by BNY Mellon (US$592.4bn) in third and JP Morgan in fourth position with US$506.4bn.

Among custodians of serviced funds, State Street Custodial Services rank first having the largest assets under custody (US$1,651.0bn), Northern Trust (US$706.4bn) is in second position ahead of The Bank of New York Mellon SA/NV, Dublin Branch (US$588.9bn).

In the transfer agents ranking of serviced funds, State Street Fund Services secure first position with total net assets of (US$1,763.6bn) followed by Northern Trust (US$713.6bn) in second position and JP Morgan (US$484.4bn) in third position.

For serviced funds, among Ireland’s professional audit firms, as has been the case for a number of years, PwC hold the lead position in auditor’s rankings in both number of funds and assets auditing a total of 2,409 funds with US$1,700.7bn in assets. They are followed by KPMG with 1,960 funds (US$1,005.3bn) and Deloitte who maintain their third position with 1,589 funds (US$1,101.6bn).

Trish Johnston, PwC Ireland Asset & Wealth Management Leader, said:

"I am delighted that PwC continues to be the number one auditor to the asset and wealth management industry in Ireland. There continues to be phenomenal growth opportunities for Ireland’s asset management industry driven by three key factors:

We expect a paradigm shift in Environmental, Social and Governance (ESG) investing. ESG and sustainable finance is becoming a matter of survival to meet the needs of sustainability-conscious investors. In particular, PwC research shows that ESG assets are expected to account for over a third of Real Estate and Infrastructure’s total assets under management by 2025.

Secondly, the private markets will play a critical role in Ireland and globally, providing much needed alternative sources of finance for areas such as housing, infrastructure and renewable energy projects. For example, over a third (35%) of respondents in a recent PwC Ireland webcast said that private markets are now more important than traditional banks when it comes to sourcing finance. We expect assets under management in infrastructure funds to double by 2025.

Thirdly, according to PwC’s recent ETF report, global Exchange Traded Fund assets under management are expected to more than double over the next 5 years. Driven by product innovation and high digital engagement, we expect Ireland to continue to participate in this dramatic growth.

As the impact of the pandemic eases and, notwithstanding global geopolitical challenges, with our highly talented people, Ireland continues to prove itself as a global centre of excellence for international funds. And with this proven track record and tech capabilities, we can move to the next level and become a global centre for ESG, supporting the funds industry with continued exponential growth in a low carbon environment.”

Among legal firms, for Irish domiciled funds, Matheson rank first with 1,232 funds followed by Dillon Eustace with 1,203 in second position and Maples Group in third place with 1,008. For the market share ranking by assets, Matheson continue to rank first for both Irish domiciled funds with US$1,210.7bn and serviced funds with US$1,215.7bn. They are followed in second place by Dillon Eustace with US$765.4bn and US$784.9bn respectively.

Tara Doyle, Head of Asset Management and Investment Funds at Matheson, said:

“At a time of extraordinary growth for the Irish funds industry, we are delighted to have been able to support our clients during this period and to have again retained our number one ranking as Ireland's leading practice for Irish domiciled funds. The trends identified by Monterey’s survey are borne out by our clients’ experiences, and 2022 promises to be an even better and busier year, with continuing growth predicted in ESG products and compliance and significant interest in the Irish investment limited partnership product. We look forward to working with our clients and partners across the industry to reinforce Ireland’s position as the European centre of excellence for the domicile and servicing of investment funds.”

For both domiciled and non-domiciled funds, Maples Group continue to lead as the largest legal adviser by funds serviced in Ireland providing legal advice to 1,464 funds, followed in second place by Dillon Eustace with 1,302 funds.

Adam Donoghue, Co-Head of the Irish Funds & Investment Management Group at Maples and Calder, the Maples Group's law firm, commented on the results:

"Retaining our position as the leading legal adviser to Irish-serviced funds for the ninth consecutive year is a testament to our talented and experienced group of lawyers, and our market-leading clients whom we are privileged to represent.

With 16 partners and over 50 investment fund specialists in our Dublin, London, Hong Kong and Cayman Islands offices, our Irish funds and investment management practice has a unique global perspective and strength in depth. While 2021 was a successful year for us across the board, we are particularly proud of the team's industry thought leadership and work on innovative deals in key growth areas such as ILP/ private markets, sustainable finance, ETFs and digital assets."

Karine Pacary, Managing Director at Monterey Insight commented:

“The results of the latest Irish fund report are again excellent news for the Irish fund industry and continue to demonstrate the resilience of all in the fund business. Equity products drive the outstanding results and, for the first time, they overtake money market products.

Also, worth noting the new, comprehensive inclusion of Luxembourg funds with an appointed Irish ManCo or main Irish service provider show the large interactivity between markets where Ireland was able to capitalise on its position particularly in relation to Brexit.”

For more information, please contact:

Karine Pacary, Managing Director, Monterey Insight, Tel. +44 (0)845 625 3863

Notes to Editors

Monterey Insight is an independent fund research company that provides comprehensive statistical analysis of the Ireland, Luxembourg, Guernsey, Jersey and UK fund industries: the only complete reference of service providers for all funds serviced in these jurisdictions.

As at 30th June 2021, leading service providers for all funds serviced in Ireland (i.e. including non-domiciled funds under administration or custody in Ireland, except for one ranking table for legal advisers which contained Irish domiciled funds only) were as follows:

Source: Monterey Insight Ireland Fund Report.

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