Investment management platforms: Easily enter the Irish funds market

Irish markets abound with opportunity – but navigating the country’s robust financial regulations can be a daunting prospect. Learn how well-established investment management platforms supply a smooth path to success in this jurisdiction and in opening distribution channels into Europe.

The Irish market is thriving and drawing a lot of interest from fund managers looking for growth and an entry point into the EU.

As of September 2023, the total net assets of Irish-domiciled funds reached 3.85 trillion euros according to Irish Funds Industry Association statistics, and the number of Irish funds and sub-funds grew by 5% from the year prior to 8,766.

New entrants to the Irish market, however, often find themselves directing a significant amount of time and energy towards meeting the country’s rigorous financial regulations – specifically in regard to qualifying investor alternative investment funds (QIAIFs) and the Undertakings for Collective Investments in Transferable Securities funds (UCITS).

In this feature, we’ll look at how investment management platform solutions give managers a much easier means of accessing Irish fund structures and distribution channels into Europe – including managers of 40 Act funds in the U.S.

What is a fund platform?

Managers looking to enter the Irish marketplace often find that a fund platform provides the best solution.

“A fund platform is a turnkey investment structure with a regulated manager (AIFM or UCITS ManCo) appointed that provides a plug-and-play point of entry into the Irish marketplace,” explains Breda Sullivan, U.S. Bank WCIB head of depositary, custody and banking international. “It enables managers to launch European products with a ready-made, regulatory-compliant funds infrastructure.”

Ireland’s regulatory framework is a brand leader for Europe, but it requires fund infrastructure beyond what’s required in other jurisdictions, including the UK and the U.S.

“These regulations can be daunting to fund managers who want to distribute in Europe,” says Ken Somerville, head of U.S. Bank Global Fund Services – Ireland. “So a key objective for global service providers, like our team at U.S. Bank, is to implement solutions that make it simpler for managers to enter this market and work within these parameters.”

The key fund structures available on a platform are UCITS funds – fundamentally a long investment vehicle – and QIAIFs, which facilitate launching a fund across the range of alternative asset classes. Each requires a unique, jurisdiction-specific infrastructure, including a depositary and an EU-regulated management company.

A platform solution is an established, easy-to-understand concept. It helps fund managers bypass the cost and infrastructure hurdles of having to set up their own regulated management company. A platform provider establishes a funds structure, UCITS or QIAIF, and appoints all necessary service providers – lawyer, auditor, management company, custodian, administrator and depositary. That structure is then available for asset managers to use if they need a UCITS or QIAIF but lack the time, expertise and/or bandwidth to establish the structure themselves. The platform provider can just open up a new sub-fund and appoint the asset manager as investment advisor.

There are already a number of such platforms in the market in Ireland – some established by third-party management companies, and some set up by specialist firms with expertise in specific strategies or market sectors. In all cases, the platforms bring speed-to-market, ease of execution and a ready-made infrastructure complete with specialist service providers attached. In many cases, the platform provider also brings expertise in distribution or product strategy that can be difficult to secure otherwise.

Where U.S. Bank can help

While relatively new to Ireland, the platform concept has been in effect in the U.S. for quite some time in the guise of the multi-series trust. As the market leader in the servicing of multi-series trusts, our team at U.S. Bank has the expertise and technology to help you manage a platform with multiple individual investment advisors attached.

We also serve as the fund administrator, depositary and global custody provider to several fund platforms in Ireland. As mentioned earlier, these can provide an easily accessible channel to new growth opportunities for U.S. 40 Act fund managers. We expect this space to grow significantly in Europe just like we’ve been seeing the multi-series trust become the go-to model for building a fund business among small to medium sized asset managers in the U.S.

“Ireland is a concentrated market, and there are a limited number of independent institutional platforms here,” says Breda. “By offering platform solutions through a leading European third-party management company and consultant in the funds industry, we act as a conduit into a reputable, established model. This delivers the ideal mix of time to market, regulatory compliance and cost effectiveness that’s well-suited – transformational even – for our existing managers in the U.S. who want to distribute in Europe.”

Easier access to growth opportunities

Net assets of UCITS and AIFs reached a 20 trillion euro milestone in 2021. And now, managers now have better tools than ever to tap into these growth markets. If you’re looking for new opportunities in Ireland and Europe, a platform solution could be your perfect point of entry.

“You want to distribute in Europe?” says Ken. “You want a plug-and-play entry point into that marketplace? You enjoy the strength and stability of working with your existing provider? Well now you can have all of the above.”

Here are several of the benefits this option provides clients:

•  It enables them to easily enter the Irish marketplace, secure access to capital and open distribution channels into Europe.

•  It allows them to avoid many of the difficulties of navigating the Irish regulatory landscape on their own.

•  It’s specifically aligned to the needs of European investors in a regulated structure.

•  It supplies confidence and reliability grounded in the platform management company.

“We strive to help our clients on both sides of the balance sheet – revenue growth and cost control,” Ken continues. “We help them grow revenue by supporting them as they find new markets and distribution for their products. And we help them control costs by delivering more efficiencies into their operating model.”

At U.S. Bank, we offer the following AIF and UCITS services as part of our comprehensive offering:

•  Administration

•  Depositary

•  Custody

•  Foreign exchange

•  Financial and regulatory reporting

Whether you’re a large, established firm, or a specialized advisor looking to take your business to the next level, we have a full spectrum of fund servicing solutions to help accelerate your success. To learn more, visit our website, contact our team and check out these other resources:

•  The view from Europe: UCITS and ETFs in a changing world (webinar video)

•  Liquidity management: A renewed focus for European funds