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IFSC Funds Group Asset Management Task Force Report



This report, produced by the Task Force on Asset Management, represents a considered response to an earlier report, Opportunities for a Broader-based Institutional Asset Management Business in Ireland, drafted by members of the IFSC Funds Working Group. 

In this report, the Task Force explores and puts forward recommendations on the finding in the earlier report that a viable opportunity exists to develop further the asset management business in Ireland.  That finding was set within the context that more higher value-added jobs and businesses can be further encouraged and developed by building on the unique range of factors already in place that make Ireland an attractive location for asset management activities.  In particular, it was recommended that current potential would be maximised through further reform in the areas of regulation, fiscal issues, marketing and education.   

Industry Background

Asset Management has grown over the last 15-20 years to become a major segment of the Global Financial Services Industry.  In 1999, global assets under management were estimated at €33 trillion.  The growth of the asset management industry has been based on the need to service the monies of individuals, governments, public agencies, banks, pension funds, insurance companies and charities, to name but a few.  Asset Management Companies are the interface between the individual on the one hand, and the financial markets and the companies on the other. 

The table set out on page 4, taken from an independent research report commissioned by the European Asset Management Association by Professors Julien Ranks and Colin Moyer Risks and Regulation in European Asset Management, details the assets managed on behalf of pension funds, insurance companies and mutual funds in the seven main European countries and the USA in 1999.  The total assets detailed in this table €23.7b - account for over 70% of the estimated total of €33 trillion at that time. 

Assets under management for eight Countries, 1999 (€ billion)


Pension Funds

Insurance Companies

Mutual Funds





































The Industry in Ireland

The latest estimate of assets under management in Ireland is circa €240b.  This includes assets managed by members of the Irish Association of Investment Managers of €226b, and an estimated €14b from other participants, licensed by the Central Bank under the Investment Intermediaries Act 1995. 

For the purpose of this report, it is important to differentiate between  

  • Assets managed in Ireland on behalf of Irish residents (or liabilities)

  • Assets managed in Ireland for non-domestic clients (or liabilities)

  • Assets relating to Irish residents (or liabilities) which are managed outside Ireland.   

The amount of assets managed by Irish based asset managers has been boosted by the arrival of Pioneer (previously named Europlus), which established an operation in Ireland under an IFSC licence in 1998 and also Bank of Ireland Asset Management (BIAM) which, as an indigenous business, has successfully gathered assets from non resident sources for management in Ireland.    

Assets under management on behalf of Irish residents (or liabilities) are less than €100 billion and increasingly there is a trend for such assets to be managed outside Ireland.  Three asset management companies, who are members of the Irish Association of Investment Managers, have recently transferred to their London offices, all or part of their assets relating to Irish residents.  In addition, more than 80% of the National Pension Reserve Fund has been allocated to asset managers based outside Ireland.  Also, there is an increasing trend whereby multinationals are restructuring the assets of their pension funds in European countries and the retention of these assets by Irish based asset managers is dependent on their ability to compete to a global standard.  

The asset management industry in Ireland is faced with the threat that this seepage of assets, to be managed elsewhere, will continue more than €15b of assets relating to Irish residents (or liabilities) are estimated to be managed outside of Ireland at this time.  Yet Ireland has proved to be a productive centre of asset management, based on all the arguments produced in the initial report referred to above.  And the success in either attracting new corporate entities (e.g. Pioneer) or client monies by established Irish based managers (e.g. BIAM) confirms the appropriateness of Ireland as a centre for this activity.  

In recent years, there has been increasing development of the management of Alternative Investments e.g. private equity funds and hedge funds.  The value of all hedge funds is now estimated to exceed $500 billion.  Dublin is seen as an attractive location for the management of such assets and asset management teams recently established in Dublin currently manage in excess of €400 million.  The presence of such boutique style managers of assets provides another opportunity to grow the asset base managed in Ireland. 

Asset management is a key component of the financial services industry and it creates potential for leverage, by attracting suppliers to the industry e.g. custodians, stockbrokers and investment bankers, as well as senior executives of investee companies.  The larger the pool of assets in a location, the greater the frequency of visits by leading corporate executives to that location to meet with investors and potential investors.  This in turn has the potential to provide many new introductions to Government/IDA as part of their foreign direct investment marketing programme.   In 2001 alone, the CEO and other senior executives representing 282 multinational corporates visited Ireland to meet with existing or potential institutional investors.   

Against this background, the report has focused on the key catalysts for strengthening the asset management business in Ireland, either by supporting the industry which is in place or encouraging new financial institutions, or existing financial institutions with other activities in Ireland, to build and develop their asset management capability here. 

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