PwC webcast discusses opportunities for Ireland as global centre for Asset Management and FinTech

12 November, 2020

67% of global asset managers plan to increase their presence in Ireland or relocate key activities to Ireland in the year ahead, according to participants of a recent webcast of industry professionals hosted by PwC. Attended by over 150 global and Irish leading fund managers in 14 countries, the PwC-hosted webcast “Ireland as a leading global asset management centre” provided some essential insights into repositioning the industry for a post-Brexit world and what this may mean for Ireland as a leading global asset management centre. 

Samuel Becket Bridge and the convention centre at night.

Hosting the webcast, Andrew O’Callaghan, PwC Asset Management Partner,  said: “The survey result highlights that there’s significant growth opportunities for asset management and fintech firms in Ireland. The advantages are clear: highly talented individuals having deep industry knowledge, well established regional hubs, continued access to the EU market and a similar common law jurisdiction as the UK with the benefits of the Common Travel Area between the two jurisdictions. 

“And with over 170 Asset Management and FinTech firms having already chosen Ireland over the last two years, Ireland has a significant opportunity to be a leading asset management centre, particularly for high value funds and FinTech activity, in a post-Brexit world.  Overall,with the correct focus, we anticipate an increased job potential for Ireland in asset management and related financial technology and payments sectors to be in excess of 6,000 over the next 18 months.”    

‘Terrific future but Ireland needs to attract high value portfolio management activity’, says leading global fund manager 

These growth ambitions were reiterated by leading global asset manager, Martin Gilbert, co-founder and former Chief Executive of Aberdeen Asset Management.  Addressing the event, he said: “Ireland has so many advantages - including very talented people with language skills - and has a terrific future as a world class centre for funds management. 

He commented that “While Ireland to date has done very well as a fund administration and processing centre, it needs to work out how to attract asset managers to locate here, so funds can be managed directly from Ireland.” According to Gilbert, if it does that then “Ireland will be one of the biggest beneficiaries from Brexit.”  

“At the same time, further consolidation in the industry is expected. And with expected growth in personal savings and the move to private credit, the industry will play a key role in refinancing the global economy following the pandemic, alleviating the pressure on government debt. All of this will present further opportunities for asset management firms operating in Ireland.”  

Ireland: a bridge to Europe 

Also addressing the webcast, David Clarke, Policy Director and founder of the Scottish-Irish Finance Initiative, said: “By deepening its linkages and relationships, Ireland can become the bridge into Europe in a post Brexit environment, serving UK, US and Asian investors.  The Irish Government should embrace the important role of representing the fund management industry in Europe.  Both Ireland and the industry will prosper if the Government can incentivise asset managers to develop their core functions here.”   

The webcast noted two further opportunities for the asset management industry: 

  • ESG funds, focusing on investing with strong environmental, social and governance (ESG) principals, are among the fastest-growing areas in the investment world. However, the webcast highlighted that investing in ESG needs to move to Sustainability, providing investors with products where the impact is clear, where companies are ‘doing good’. The role of impact investing and performance will become really important in the future and will be boosted by the generational shift. 
  • With even more margin compression likely in the future, the use of technology to take out cost will become even more important.  Using digitisation to constantly disrupt the business model and build customer loyalty will be critical going forward. 

Andrew O’Callaghan concluded: “Capable of offering market access and a deep English speaking talent pool, Ireland’s fund management industry is strategically positioned to be a progressive truly cross-border industry.  We need to continue to work together, building skills and linkages in our markets while providing smooth market access to the EU for our non EU colleagues.”  

Further to this, PwC Ireland has identified five key steps for asset fund managers to undertake now before the impact of Brexit fully hits (refer to Notes to Editor below). 

Ends

Notes to Editor:

About the webcast

The webcast hosted by PwC Ireland, took place on 14 October and was attended by over 150 asset managers based in 14 countries including in Ireland.

Five key Brexit considerations for asset managers 

  1. The UK and EU equivalence regulatory and supervisory regime has not happened.  However, the EU has adopted a time-limited decision to give EU financial market participants 18 months to access three UK-based central counterparty (CCP) clearing houses under the European Market Infrastructure Regulation (EMIR). This decision expires on 30 June 2022  and the EU is strongly encouraging EU financial market participants to reduce their reliance on UK CCPs during this period.
  2. As of 30 September 2020, the UK Temporary Permissions Regime (TPR) reopened and will remain open until 31 December 2020. This regime will come into effect from 1 January 2021. Therefore, EU managers who wish to market, or continue to market, into the UK after 31 December 2020 will need to apply to the TPR to enable this activity to continue, if they haven’t already done so.
  3. There has been some recent market noise about delegation as a result of the European Securities and Markets Authority (ESMA) letter to the Commission concerning the AIFMD review. However, it is important to note that the necessary Memoranda of Understanding (MoUs) are in place to enable delegation of portfolio management to the UK to continue after the end of the transition period. 
  4. In the case of a hard Brexit on 31 December 2020, data processing and data flows between the UK and the EU may require additional specific contractual requirements.
  5. It is essential to consider any changes that may be required to fund documents as a result of Brexit and to implement any necessary changes before the end of the transition period. 

For more information, click here: https://www.pwc.ie/industries/asset-management/insights/five-key-brexit-considerations.html 


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Andrew O'Callaghan

Partner, PwC Ireland (Republic of)

Tel: +353 1 792 6247

Johanna Dehaene

Corporate Communications, PwC Ireland (Republic of)

Tel: +353 1 792 6547

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