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Irish funds sector worth E2.5 trillion

Tuesday, March 05 14:12:12

The value of the Irish funds industry will surpass the E2.5 trillion mark for the first time in 2013 despite the challenging regulatory and economic environment.

That's according to BNY Mellon's Head of Offshore, Rachel Turner who sees the funds industry in Ireland, which currently employs in excess of 22,000 people, retaining its position as a global leader in fund administration.

"We are still seeing a huge appetite from investors to place money in Ireland... Assets serviced by the Irish funds industry reached an all-time high of E2 trillion in 2012. The industry continues to lead the way when it comes to additional flows, with over 40pc of UCITS asset flows in Q1 2012 coming through Irish vehicles, and over 10pc growth in net assets of UCITS in the first half of last year. This is down to the fact that Ireland is still seen as a good place to do business from a funds perspective, despite the financial crisis, so I am optimistic that we will reach E2.5 trillion in assets serviced by the Irish funds industry by the end of 2013," said Ms Turner.

The next six months will see a number of pieces of legislation crucial to the future of the funds industry here being debated at EU level. Turner believes that the Irish administration, during the course of the EU Presidency, has a unique opportunity to help shape this legislation.

"One of the greatest challenges facing the Irish funds industry in 2013 is increased regulation at both a global and local level. How quickly the industry in Ireland adapts to these changes will be critical to maintaining the upward growth trajectory the industry has enjoyed in recent years. "Ireland's EU Presidency in 2013 presents Ireland with a unique opportunity to influence and shape future regulatory direction for the wider funds industry. No other EU country has the in-depth knowledge and experience of the funds industry built up over a number of decades and the inclusion of a number of key agenda items of consequence to the industry will give us a front row seat over the next six months."

While the Irish funds industry has experienced significant growth in recent years based mainly on business from the US and UK, Turner sees the next wave of growth coming from further afield.

"The Irish funds industry is well known in the US and in the UK and we will continue to attract new investors from these regions in 2013. In order to continue to grow however, Ireland needs to begin to target emerging distribution markets such as South America and the Middle East, in addition to continuing to raise its profile in Asia."

"The financial world has changed, and Ireland has been able to adapt quickly to a number of challenges over the years because we have had the intellectual capital at our disposal to cope with some of the more complex funds in the market - this has been the success story of the Irish funds industry. Increased regulation will further test our capability to be innovative, however if we can continue to stay ahead of the curve and adapt quickly, and continue to work with a regulator that is cognisant of the complexities of the funds industry, we will continue to thrive."

Recent research from Monterey Insight positioned BNY Mellon as the largest administrator in Ireland by total net assets ($400.7bn) for fund administration services across domiciled and non-domiciled funds, followed by State Street ($356.2bn) and JP Morgan ($239.6bn).

Fund assets serviced in Ireland rose by 2.3pc to reach $1,925.5bn at the end of June 2012, up from $1,882.2 the previous year.

Irish domiciled funds represented $1,444.4bn up from $1,396.1bn compared to June 2011. The total number of subfunds was 6,715, of which 3,673 are domiciled in Ireland.