Irish Fund Market Positive About Private Markets

A well-attended UK Private Assets Seminar in London last month, organised by Irish Funds was a good indication that the market remains positive.

Following recent regulatory changes relating to AIFMD II and with an eye on emerging opportunities in the private markets space, Jon Masters, Senior Director – Fund and Corporate, and Lloyd Collier, Senior Director – ICS UK and Ireland, at JTC examine the current optimism in the market and where the future lies:

If the sentiment at the recent Irish Funds seminar in London is anything to go by, there is optimism in the Irish funds sector in early 2025, as it looks to embrace regulatory change and an evolving investor landscape to seize opportunities in the private markets space.

While Ireland has always traditionally been a leader in the liquid funds space, ETFs in particular, private capital is increasingly moving centre stage, and the Irish funds sector is ready to compete with other European jurisdictions already in that space.

“The feeling is that Ireland has all the right ingredients to be a major force in the European private markets space. It has a really strong professional service provider infrastructure, a fantastic regulatory framework, and an attractive tax and structuring landscape,” says Lloyd. “The Irish Limited Partnership in particular continues to appeal to managers, offering all the benefits of a typical offshore partnership model, including flexibility which is increasingly important.”

Disrupting the status quo, however, is no easy feat, with managers comfortable to stay in known locations where they have existing relationships – meaning that for Ireland, the focus is on new managers and new structures. Playing on the benefit of the Anglo-Saxon language, for instance, Ireland is seeing growing success in attracting US managers looking to market into Europe.

“The Central Bank is a key supporter of these efforts,” explains Jon. “They’re very focused on making this a success and ensuring registration is as easy as possible whilst at the same creating a framework that is safe and robust.”

With that in mind, it’s clear that driving innovation is key to enhancing Ireland’s role in mobilising private capital. As alternatives become an increasingly important component of the product toolkit for institutional and retail investors, Ireland is focused on ensuring access to these opportunities.

This is particularly evident as Ireland is making strides in a burgeoning private credit sector.

“The Central Bank has confirmed it will align its regulations with AIFMD2,” says Lloyd. “That means that all the loan origination rules are now the same throughout the EU fund centres. In particular, the confirmation of no gold plating has been welcomed by the market.”

In addition, Ireland has considerable experience with the sort of special purpose vehicles (SPVs) frequently used in credit fund structuring.

“Managers are increasingly appreciating the importance of that experience,” explains Jon. “In particular the Section 110 carve out creates the opportunity to establish robust tax neutral vehicles to support this sort of structuring. That’s a big draw. In addition, the workforce in Ireland is very stable and very experienced in working with these vehicles compared to other centres.”

With the private markets set to continue to expand and evolve, create new opportunities for investors and help drive capital into the real economy, the Irish funds market has an eye on the long-term. Its ability to continue to evolve its infrastructure and proposition will be pivotal ensuring it can meet the future needs of invertors and gain a bigger share of the European private markets business.

JTC in Ireland offers AIFM, Fund Administration, Depositary and Corporate Services. To found out more, visit our dedicated page: Ireland