ICAVs dominate new business in Ireland for 2022
New findings from the 28th 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 decreased by 12.1% in US Dollar, reaching a market size of US$3,731.2bn as at 30th June 2022 (from US$4,242.7bn in 2021). This equates to a decrease of 3.5% in Euro compared to 2021. During this period, the number of Irish funds and sub-funds has grown by 7.4% to 6,443 (from 5,998 in 2021).
The total market share of Irish domiciled and serviced funds decreased by 8.8% in US Dollar, reaching a market size of US$5,316.4bn. Allowing for FX rate fluctuations, In Euro, this would have represented an increase of 3.5%. The overall total number of sub-funds serviced in Ireland, increased by 9.0% and reached 11,377 from the 10,433 funds and sub-funds of the previous year.
Over 720 new Irish funds and sub-funds were launched during the period accounting for US$98.2bn. ICAVs were the most popular type of funds launched and accounted for 61% of the new Irish funds and sub-funds launched, made up of 448 funds and sub-funds and US$63.7bn. Overall, the inflow of new business for Irish, non-domiciled and newly reported funds and sub-funds came to US$192.0bn from over 1,324 funds.
The most popular type of products, within the newly launched funds during the period, were alternative investment with 327 fund and sub-funds and US$64.9bn of assets, accounting for 45.5%. They are followed by equities funds with 222 funds and sub-funds and US$28.5bn of assets, accounting for 18.7%
EU-SFDR data, newly reported as of 30th June 2022, revealed 176 Irish domiciled sub-funds were listed under Article 9 with US$48.0bn of assets and 1,261 sub-funds under Article 8 totalling US$1,022.9bn.
Among the largest fund promoters/initiators of Irish domiciled schemes, much the same as last year, BlackRock Financial Management maintain their lead position with total net assets of US$864.9bn. This year, Vanguard Group jump ahead and take the second spot with US$194.2bn, in front of PIMCO with US$180.2bn. For the promoters/initiators ranking of both domiciled and non-domiciled funds, BlackRock Financial Management maintain their lead position with total net assets of US$891.3bn, Goldman Sachs are in second place with US$215.3bn and Vanguard Group in third with US$194.2bn.
The top three positions for Management Company/AIFM, among Irish domiciled and combined results is the same ranking as for promoters/initiators above.
State Street maintain their top position in the following categories, being the largest player for administration, custody and transfer agency services with their assets totalling for each role as follows: assets under administration US$1,639.5bn, custody US$1,448.7bn and transfer agency US$1,624.3bn.
Tadhg Young, Country Head, Irelandat State Street, commented:
“State Street is very pleased to retain our position in the marketplace as the largest provider of fund administration and custody services in Ireland, across both domiciled and non-domiciled funds. State Street works in partnership with our clients as they develop their cross-border investment fund businesses across multiple products and geographies. This is a testament to our skilled and talented employees, leveraging innovative technology and implementing a broad suite of client-focussed solutions. It is especially encouraging to witness the continued success of our ETF and private market franchises, where particular focus in recent years has resulted in clear differentiation of State Street as the leader in these important market segments.”
In further detail, for fund administration services across both domiciled and non-domiciled funds, State Street Fund Services (US$1,639.5bn) continue to lead in the top spot. Northern Trust (US$586.1bn) maintained their second position, followed as last year by BNY Mellon (US$569.2bn) in third and JP Morgan in fourth position with US$439.6bn.
Among custodians of serviced funds, State Street Custodial Services rank first having the largest assets under custody (US$1,448.7bn), Northern Trust (US$580.8bn) are in second position ahead of The Bank of New York Mellon SA/NV, Dublin Branch (US$557.6bn).
In the transfer agents ranking of serviced funds, State Street Fund Services maintained first position with total net assets of US$1,624.3bn followed by Northern Trust (US$587.2bn) in second position and BNY Mellon (US$435.9bn) claim the third position this year ahead of JP Morgan.
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 serviced funds and assets auditing a total of 2,419 funds with US$1,263.0bn in assets. They are followed by KPMG with 1,952 funds (US$947.9bn) and Deloitte in third position with 1,766 funds (US$1,143.1bn).
For Irish domiciled funds, PwC also lead in number of funds and asset with 1,987 funds (US$1,113.1bn), followed by Deloitte in second place with 1,582 funds (US$1,100.1bn) and KPMG is in third position with 1,443 and US$821.8bn.
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. With recent economic headwinds we have seen some correction in asset prices over the last year. Despite the recent upgrading of global growth by the IMF, an easing of inflation and hopes that interest rates may peak this year, significant uncertainty remains. Asset growth continues to be tough and competition for market share is intense.
Looking for growth opportunities will be critical. ESG has become the most powerful driver of growth in asset and wealth management. PwC’s latest Asset and Wealth Management Revolution global report launched in October 2022 revealed that ESG assets, with a compound annual growth rate to 2026 of 12.9%, are on pace to constitute 21.5% of total global AuM in less than 5 years. This represents a dramatic and continuing shift in the asset and wealth management industry and underlines the importance that asset managers and institutional investors understand how to capture the shift to ESG as a counter-balance to potential portfolio underperformance.
Other sources of growth include the private markets which will play a critical role providing much needed alternative sources of finance in areas such as housing, infrastructure and renewable energy projects. ETFs are another asset class to watch where we expect continued robust growth.
Notwithstanding global geopolitical challenges, with our highly talented people and pro-business environment, 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 become a global centre for ESG, supporting the funds industry with continued growth in a low carbon environment.”
Among legal firms, for Irish domiciled funds, Matheson rank first with 1,238 funds followed by Dillon Eustace with 1,229 in second position and Maples Group in third place with 1,077. For the market share ranking by assets, Matheson continue to rank first for Irish domiciled funds with US$930.8bn. William Fry create the surprise and take the second place with US$778.8bn ahead of Dillon Eustace.
Tara Doyle, Partner and Head of Asset Management and Investment Funds Department, Matheson, said:
“2022 was a challenging year for the global funds industry given the significant market volatility impacting all sectors. Against that backdrop it was reassuring that the number of Irish domiciled funds established by our clients, and the market more generally, continued to grow.
We are delighted to have retained our number one ranking for Irish domiciled funds by number of funds for the third year in a row and by AUM for the 12th year in a row. It was particularly pleasing to see growing interest in the Irish investment limited partnership (ILP) structure and to have acted for one third of the ILPs established to date. 2022 was also a busy year for new ESG product launches, with Ireland reinforcing its position as a leading European centre of excellence for the domicile and servicing of ESG funds.”
For the 10th consecutive year, Maples Group is first for the market share ranking of serviced funds. Maples Group continue to lead as the largest legal adviser by funds serviced in Ireland providing legal advice to 1,532 funds, followed in second place by Dillon Eustace with 1,317 funds and Matheson with 1,245 in third position.
For the market share ranking of serviced funds by assets, Matheson leads with US$936.0bn, again William Fry snap second place with US$778.8bn ahead of Dillon Eustace.
Eimear O'Dwyer, Co-Head of the Irish Funds & Investment Management practice at the Maples Group, commented on the results:
"We are delighted to once again retain our position as Ireland's leading legal adviser to Irish serviced funds for the tenth consecutive year. This is a testament to the hard work of our exceptionally talented team and demonstrates the trust, confidence and loyalty that clients have in both the quality of our services and calibre of our lawyers.
As the largest Funds & Investment Management team in Ireland, we have had the privilege of supporting clients on a number of industry 'Firsts' including advising on the first regulatory approval for Irish funds to obtain exposure to cryptocurrencies.”
She added, "We expect ESG/impact funds to continue to be a dominant theme in 2023. While the past few years brought challenges, it also forced us to pivot and review our service offering in certain areas.
The addition of dedicated financial services regulatory and governance expertise and the recent launch of our new ESG solutions was a natural evolution of our offering and a complement to our existing legal, fund, fiduciary, regulatory compliance and entity formation and management services offered across the Maples Group."
Karine Pacary, Managing Director at Monterey Insight commented:
“We are delighted to reveal the new results of the Irish Fund Industry in our 28th edition of the Monterey Irish Fund Report 2022. Under the current market climate, the Irish fund industry has remained resilient to the many challenges which have occurred since 2021 and continues to place Ireland as a global centre of excellence for both domiciled and international funds.
It is interesting to see that ICAV vehicles dominate the type of Irish funds launched during 2022. They become the most popular type of product in existence after UCITS and are now clearly ahead of Designated Investment Companies.
Our new collection of data on EU SFDR classifications revealed that 176 funds were listed under Article 9 accounting for US$48.0bn. This should prove to an interesting new data component of our report and should enable easier monitoring of the exponential growth of ESG products.“
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 2022, 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 2022 Fund Report