[ U P D AT E ]
Ireland expected
to overtake
UK and US as
favoured fund
domicile
MANY CUSTODIANS, FUND
ADMINISTRATORS AND MAR-
KET INFRASTRUCTURES ARE
PLANNING TO EXPAND THEIR
OPERATIONS IN THE COUNTRY
TO MEET THE GROWTH OF
IRISH-DOMICILED FUNDS.
I
reland is expected to overtake the UK and
US as the second top fund domicile for
asset managers within five years, according
to new research from State Street.
Of 250 asset managers surveyed globally
by the Boston-based global custodian, 62%
of funds will be domiciled for distribution in
Luxembourg within five years, followed by
Ireland with 55%.
This compares to the 46% of funds that
are domiciled in Luxembourg today, and
42% in Ireland.
Meanwhile 51% of asset managers plan
to distribute their funds in the UK, up from
42% today, and 50% in the US, up from
46% today.
“As cross-border products are increasingly
seen as the optimal path 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 Ire-
land that can for meet regulatory obliga-
tions confidently and efficiently are seen as
the natural choice by asset managers, allow-
ing them to mitigate risk, achieve econo-
mies of scale and reach investors globally.”
The study shows how Ireland is set to
become more popular with asset managers
to launch domestic funds in the face of the
UK’s looming exit from the EU.
To meet this trend, many custodians, fund
administrators and market infrastructures
are planning to expand their operations
in the country. JP Morgan, Northern Trust,
Apex and Clearstream have all announced
plans to expand staff in Ireland.
In addition, the survey found 64% of asset
managers are planning to launch cross-bor-
der products in the next five years.
“As cross-border strategies rapidly gain
traction, asset managers will seek scale and
efficiency in a cost-pressure environment by
choosing domiciles where they can dis-
tribute across jurisdictions, structures and
governance frameworks,” added Liz Nolan,
chief executive officer, EMEA, State Street.
55%
of the 250 asset managers surveyed
by State Street said they will be
domiciled for distribution in
Ireland within five years compared with
42%
which are there today.
The Hedge Fund Annual 2018
globalcustodian.com
15