The shape of its international financial services industry has dramatically changed since its formation by the Irish Government in 1987, with a loss in banking jobs in contrast to big gains in fund administration, insurance, aircraft leasing and payments.
Total employment in the IFSC now stands at over 38,000, with 10,000 people employed outside of Dublin, paying over €1bn (£0.83bn) in annual corporate taxes and a further €1bn in payroll taxes.
As for the funds industry in Ireland, it continues to grow, with data from the Central Bank of Ireland (CBI) at end of December 2021 showing assets in Irish-domiciled funds surpassing €4trn for the first time, a 22.5% growth across all funds, with a growth of 42.1% in exchange-traded funds (ETFs).
In 2021 total net sales into Irish-domiciled funds reached €310.37bn, of which €131.3bn has been into ETFs. This represented more than 80% of all the net sales into European ETFs, which stood at €161bn for the year. Ireland continues to be a top European domicile for ETFs, with Irish-domiciled ETF assets representing 66% of the total European ETF market. Currently, Ireland is the domicile for 5.95% of worldwide investment fund assets, making it the third largest centre in the world.
The total number of Irish-domiciled funds, including sub-funds, reached 8,363 in December 2021, up from 7,962 in December 2020.
Sectoral growth has been buoyed by strong inflows and a favourable economic environment, as global economies continue to recover from the Covid-19 pandemic.
ublin’s International Financial Services Centre is booming as it celebrates its 35th year on the world stage, with plenty of cranes on the skyline visually indicating a growing presence of companies taking a strategic view of what this European Union member base has to offer.
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Mark Battersby hails the continuing success of financial services in Dublin and elsewhere in the country
We expect growth sectors such as fintech, alternative lending and sustainable finance to continue to be booming sectors in Ireland
Eimear O’Dwyer, Maples and Calder
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Eimear O’Dwyer, co-head of Maples and Calder's Funds & Investment Management team in the Maples Group's Dublin office, specialises in the structuring of UCITS and AIFs as ICAVs, ILPs and 1907 Limited Partnerships. She is also chair of the Irish Funds Legal Working Group and a member of the Irish Chapter of 100 Women in Finance.
Over the course of five decades, the Maples Group has grown from modest beginnings into one of the world's preeminent professional services firms, with operations in the Americas and Caribbean, Asia Pacific, Europe and the Middle East.
With investment management booming in the general banking and financial services, there are also a lot of changes going on too.
“Two big players, Ulster Bank and KBC bank decided to move out of the Irish marketplace as others have decided to move in. So, it's a dynamic market with a lot of things changing, but all good.”
Dublin is recognised
as the worldwide expert area for investment funds.
We have all of the legal and regulatory expertise here to
make it work for investment managers
Gráinne O’Farrelly, Kroll
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In common with many others, one of O’Farrelly’s biggest challenges is “certainly going to be continued to be remote working and most firms are going to move to a hybrid model.
“How are we going to make it work for both the employer and the employee alike? The impact that it has on firms cannot be underestimated because it's an enormous shift in working behaviours.
“We have been able to continue to evolve our product offering, revisiting certain structure on some of the funds that we launched many years ago.”
He highlights new investment solutions such as the circular economy amid more focus in ESG investing: “This has been another important year for us in continuing our journey towards sustainability.”
From its Dublin operations, Mediolanum’s extensive distribution network is through financial advisers in Italy, Spain and Germany, with particular success around its multi-manager product. The access to local talent and high quality of life are two big reasons why Pietribiasi favours Dublin as a base for its business, which continues a journey in working with investment boutiques.
“We expect one third of our assets to be managed by boutiques and we are working with them to establish close partnerships over time. After many years of discussion, we recently awarded a mandate to KBI Global Investors, which has strategies that are particularly attractive, like water and sustainable infrastructure.”
We've been building an agile team here in Ireland. We've got eight different nationalities in the team, which is brilliant, and we're bringing in other people, working with companies to effect change
Eve Finn, Legal & General
Investment Management Ireland
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Over at Legal & General Investment Management Ireland, managing director Eve Finn also highlights its focus on “ensuring that we're a sustainable investment partner for our clients” on net zero and climate-related goals. She says this year is seeing “ESG flavours coming through all of the products that we're launching at the moment.
“It’s really important for our business to demonstrate our ESG credentials. But we've been mindful that we have clients and lots of jurisdictions with different local requirements.
“And our programmes are focused in that local way to help us do that as efficiently as we can for our clients on making sure that we're demonstrating the value to them.
“We’ve been trying to come up with sort of comparable standards. We're all investors, and we're trying to pick out the ones that we like, that fit our profile – it's a complete minefield.”
LGIM is the asset management arm of the Legal and General group, headquartered in the UK but with a global footprint, and in the top 15 managers globally.
The Dublin business, which has been operational since 2018, serves clients within Europe: “We set this up as part of our Brexit planning, but also as part of our growth strategy into our wider plans around and increasing our footprints and becoming a larger player in European and institutional and retail markets.”
Finn says: “We've been building an agile team here in Ireland, very small, perfectly formed of nearly 40 people. We've got eight different nationalities in the team, which is brilliant, and we're bringing in other people, working with companies to effect change.”
We’re seeing really vibrant growth, not just over the course of 2021, but really the last couple of years
Pat Lardner, Irish Funds
Industry Association
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International Investment spoke to some of the key players on a visit to Dublin in this special anniversary year to explore the opportunities and challenges this international centre faces in turbulent world.
Pat Lardner, chief executive at the Irish Funds Industry Association, who represents over 150 members, said; “We’re seeing really vibrant growth, not just over the course of 2021, but really the last couple of years.”
“Managing that growth and building a large group with unified vision and culture within that unique environment will take innovation and a tailored approach for an evolutionary environment.
“Technology has rapidly accelerated over the pandemic period to accommodate our new virtual world and the needs of the industry – both clients and internal staff – has changed. To be competitive in both those areas we need to continue to break new ground to sustain the success that we have created over the last 18 years of the Apex Group’s history.”
What trends is he seeing developing in Dublin as an international financial centre this year and beyond? "A number of seismic events have contributed to change in Ireland over the last number of years. Brexit, the pandemic, growth in funds/technology in core service areas for Dublin, have all resulted in an ever-changing environment.
“Over the last 30 years Ireland has established itself on the world map as a centre of excellence for the funds industry, as well as a leading jurisdiction for international technology firms to base their headquarters.
“This trend is set to continue with strong economic growth. Despite an increase in the corporation tax rates to 15%, Ireland has proven itself as delivering a high-end skilled workforce with political and economic stability that is a strong incubator for international firms.
“We see a greater focus on energy supplies to keep up with this demand, and data centre requirements for these large corporations and schemes to attract international talent, along with opening visa schemes to some of the unregistered workforce already here.”
Over at Kroll, a global firm of almost 5,000 employees in 30 countries, Gráinne O’Farrelly, managing director Financial Services Compliance & Regulation, highlights its “huge” investment funds division in Dublin which looks after €5.4trn of assets for 15,000 funds with distribution to 90 countries.
“Dublin is recognised as the worldwide expert area for investment funds. We have all of the legal and regulatory expertise here to make it work for investment managers.”
Technology has rapidly accelerated over the pandemic period to accommodate our new virtual world and the needs of the industry – both clients and internal staff – has changed
John Bohan, Apex Group
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He highlights from its latest economic assessment report how the number of people employed directly by either investment managers or fund management companies leapt 40% during those two years to 3,500 people. And of the 17,000 direct employees, around 6,500 of them are located outside of the centre of the city or outside of Dublin, just under 40% of the total, up from around 10% previously.
“There's always a reference to Dublin as a financial centre. But we have a national industry now because we've effectively got four other clusters outside of the Dublin area that are employing in excess of 1,000 people.
“We're now in a situation that no county in the Republic of Ireland is without somebody in our industry working. So that's been a pretty big and significant change for us.”
Another key trend Lardner picks out is the size of the organisations, with a big uplift in the number of firms that are employing 50 people, a demonstration that those people who came over and planted a flag, or set up some form of operation, have expanded and diversified those operations.
As for this year, the association has a very big legislative and policy agenda, he says, specifically around AIFMD.
On 31 March, the Central Bank of Ireland (CBI) advised Irish Funds that they have approved in principle a Qualifying Investor Alternative Investment Fund (QIAIF) with a low level of exposure to cash settled Bitcoin futures traded on the CME.
“The latest notice that the CBI has approved, in principle, indirect crypto exposure for a QIAIF is a welcome first for the industry in Ireland. This is the first type of indirect crypto exposure approved for a QIAIF”, he comments. There is also the Irish government’s roadmap for sustainable finance, to which Irish Funds has contributed.
“We have three very different and strong work streams on that to enable the further developments of Ireland as a centre of excellence in the whole sustainable world.”
Against the backdrop of an extremely buoyant time for the industry and a raft of M&A activity, for John Bohan, co-founder and Country Head Business Development (Ireland), Apex Group, a key challenge is “managing the human resources side of the business in terms of scarcity and development within our group to ensure a unified culture”.
“In conjunction with that growth, we are exiting from a pandemic globally and potentially returning to work or, in a lot of cases, hybrid working scenarios.
We have been able to continue to evolve our product offering, revisiting certain structure on some of the funds that we launched many years ago
Furio Pietribiasi, Mediolanum International Funds
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“It does require real management skills to figure out how to motivate a team where they are coming into the office sometimes and where not everybody in the team is present.
“People are experiencing pandemic fatigue, I would say. And so, I think the next quarter is going to be very important in figuring out how to get that hybrid model right.”
Also tied into that are labour market shortages and increased wage inflation, and that's making it an employee's market.
“Employees can more or less name their price if they have if they're good candidates and they have good experience behind them.”
A key focus this year, adds O’Farrelly, is on networking in the industry again, now that's a possibility. “Building our partnerships with our clients, making sure that we can help them do what they need to do, given what's happened over the last couple of years and working on a strategy with them.”
Business development in the region is continuing apace, she says as “Ireland is very well placed obviously post-Brexit as well, because there are still a lot of firms in the UK that are figuring out the best way forward for them.
“As a pathway into Europe, it would be one of the first places they would look to. We obviously have competition in Luxembourg. But I do think that from the UK perspective, we're probably well-placed for UK asset managers to come here.”
Furio Pietribiasi, CEO of Mediolanum International Funds, echoes this view, adding: “I'm particularly proud of the fact that this has been one record year for us in terms of results, but not simply because we have good support from the markets. More important because we receive further confirmation of the trust of our clients, about our business and the solution that we provided to the market.
As of 31 October 2021, the Maples Group employs over 2,300 professionals worldwide, with over 440 professionals based in Ireland. The Group's Irish office was launched in 2006 and continues to serve as an important European hub for international clients doing business in and from Ireland.
O’Dwyer says: “Despite considerable logistical and other headwinds created by the pandemic since March 2020, we have remained very busy across our practice areas. Funds and Investment Management, Finance, Corporate, Tax, Employment, Financial Services Regulatory, Dispute Resolution and Insolvency and Projects and Construction have all proved resilient.
“The fact that we are a well-diversified and truly international business, with the right balance of transactional and advisory work, has definitely been an advantage to us. The team is also heavily focused on growth sectors such as fintech, alternative lending and sustainable finance. We expect these to continue to be booming sectors in Ireland.
“We also anticipate that the funds industry will continue to grow in 2022, especially as the appetite for investing in ESG funds increases and with the Investment Limited Partnership Act, which is a strong, positive example of how Ireland can compete at an international level for future investment opportunities. Striking the right balance between regulation and flexibility, it is ideally placed to meet the requirements of investors who require a regulated structure.”
The Irish Association of Investment Managers has really got an impetus and comes with common objectives clarified from a very strong group of financial companies
Sean Hawkshaw,
KBI Global Investors
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For his part, Sean Hawkshaw, chief executive of KBI Global Investors, points to a very dynamic and collaborative environment between CEOs, CIOs and investment teams around Dublin.
“The Irish Association of Investment Managers, which I'm involved in, has really got an impetus and comes with common objectives clarified from a very strong group of financial companies.
We want the Central Bank of Ireland to be the best national competent authority within the EU. We think that's supportive of the business and its growth
Pat Lardner, Irish Funds
Industry Association
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Another key focus is on working very closely with the CBI around its process for authorising products and making sure that the expertise pool is available and supporting the central bank.
“We ultimately want it to be the best national competent authority within the EU. We think that's supportive of the business and its growth.”
Lardner highlights here an inventory done in Q1 on the technology skills needed to support the industry. “We're also getting into areas like the financial literacy for the mid-teens, not just for financial literacy sake, but also to build an awareness of this now that our industry is national.”
This approach could lead to potential career opportunities “for kids from lots of different backgrounds, who will study lots of different things, not just traditional economics”. The training and development also extend to lifelong learning accredited designations for people working in the industry, because we know that their skills are going to change over time.
“We are running designated person forums as we have a community now of four to 500 designated persons, whether it be, for example, during the week on distribution, it could be on investment management on risk.
“We're engaging with members but also getting data and insight and information from them to support the advocacy work that we do because ultimately we're seeing the range of stakeholders that we're engaging with not only here domestically in Ireland, but critically because we have an on the ground presence in Brussels.”
He concludes: “We’re fortunate in that we have 600 people actively engaged across our 36 working groups, which gives us not only a collective firepower, but an inclusiveness around how we do things that I think is pretty well unparalleled.”
Building a future
Building a future
Speaking to International Investment, Hawkshaw said: "There are a lot of changes going on at the moment. Two big players, Ulster Bank and KBC Bank decided to move out of the Irish marketplace. It's a dynamic, changing space but going in the right direction."
"We've also seen existing players that have been here for many years, possibly just with management structures for funds, gearing up their activities, and putting more front of house investment management activity alongside the macro structure. There's a very dynamic and collaborative environment between CEOs, CIOs and investment teams around Dublin."
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ost Brexit, a lot of new entrants have swooped into the investment management sector of the Dublin marketplace, says Sean Hawkshaw, chief executive of Ireland-based KBI Global Investors.
There's a dynamic and collaborative environment between CEOs, CIOs and investment teams around Dublin
Sean Hawkshaw,
KBI Global Investors
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"So it's been quite dynamic in the last few years where everybody's seeing some salary pressures starting to come through, and it has become more difficult to hire, with greater turnover within the industry albeit, coming off from a low base."
He continued: "There are a lot of positives with that too. There's a very dynamic and collaborative environment between CEOs, CIOs and investment teams around Dublin, with a lot of them located in this area.
"The Irish Association of Investment Managers, which I'm involved in, has really got an impetus, and it comes with common objectives clarified from a very strong group of financial companies over the last five years.
He added: "It's a good place to work from that perspective. In terms of recruiting, at KBI we try to promote people internally, but we've also been able to augment that by bringing people in from overseas, either from the UK or from the US or elsewhere."
Hawkshaw also cited the importance of Dublin's "very strong" university presence with "some really exciting and innovative new programmes feeding into the financial services sector here".
Overall, "investment management is booming" across Dublin's financial services space, he says.
Focusing on the social
as ESG demand rises
Focusing on the social
as ESG demand rises
In this video interview, International Investment Publisher Gary Robinson speaks to KBIGI CEO Sean Hawkshaw as the company releases its first new investment strategy in recent years...
What is the appeal of Dublin as a place to live and work?
Dublin is a leading world financial centre, and it's the only speaking English hub left in the EU.
It's regarded as a good place to work and live. And whenever you've got that combination, it tends to attract the best people.
That's a big pull for Dublin and for us; it's about getting those people into our business to work for us, and retaining those people so we can offer good service and offerings to our customers.
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Dublin is a leading world financial centre and it's the only speaking English hub left in the EU
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What are the biggest challenges for Dublin-based financial services companies, particularly as it becomes more popular?
Dublin at the minute, because of what's happening with Brexit, is becoming even more attractive as a place to do business for a lot of international businesses.
Our main focus and concern at the minute is not business related or in relation to proposition or anything like that. It's around retaining our staff and attracting high calibre staff.
Right now, you have a number of international entities coming in to work in various different sectors. Those entities are after the best staff. So we're all competing for that in the financial centre. We recognise that our people and our success are related, and we would not be where we are from a success point of view without our people. Our customers are central to what we do, and our staff are central to delivering to our customers.
How important is it to have a real sense of community for those working at Canada Life International?
We recognise that people are central to this business succeeding and growing. And it's very important that we keep the right people and attract them for their talent. It's delivering for the business but it's also about making people happy and making them feel they can develop as a person and as professional with the business, and that's central to what we want to offer as well. And we're well placed to do that. I previously worked for a number of insurance entities, and I recognise it's common to this group that they are very people-focused in relation to not only customers but also to the staff, and that's why I’m still here and that's why I intend to be here for a long time.
I know that through this business and through this group there's an opportunity to build not only a good life but also a successful career, and that's a big thing. And other people in our business recognise that, which is why we've done so well as a group and certainly as a business.
What are you looking to achieve at Canada Life International throughout 2022 and beyond?
As an individual, I'm ambitious and as a result I fit well within the group and the business. And the international business, the Isle of Man business and the Dublin business are very, very ambitious. Off the back of 2021, where we've written over €1.2bn in new business flows, we want to build on that success in 2022. We intend doing that through offering a market leading proposition, strong service and the customer is central to everything we do.
Already in 2022, we're ahead of plan year to date and we intend to maintain that momentum as we move through 2022 and into the future.
Having a base in Dublin gives us that international presence in the EU to complement our Isle of Man offshore business. It also means that we have a dual jurisdiction offering that's attractive to our advisers and to our customers.
We have a five-star AKG rating for financial strength and we have strong credit ratings. We offer a market leading range of investment bonds and trusts offering tax advantages and flexibility that offshore investing is well known for. And as a business we offer market leading technical and service support. We're very focused on servicing the UK intermediary market, and that includes IFAs wealth managers and private banks.
It also offers strong policyholder protection through international and financial and regulatory standards, backed by the Central Bank of Ireland, which is the regulator there.
Worth touching on too is the advantage we have for any investment bond that's written to the Irish business, as DFM fees that are applicable would be exempt from VAT.
Why is Dublin such an important base for Canada Life International?
Dublin and Ireland are very important for the Canada Life group. The Canada Life and Irish Life brands have been in Ireland since 1993.
It's a very recognised and regarded brand in the insurance industry. International business itself has been operating across Dublin and the Isle of Man for over 30 years. The Dublin business has been running about 15 of those years.
With regards to strategy and where we are as a business, we're in it for the long haul. We have very well recognised and committed parents in Great-West Life and we have a strong post-Brexit operating model that's been reviewed by regulators in Ireland and the UK. Great-West Life is a traditional conservative insurance business with no private equity involvement.
The Central Bank of Ireland
A place to build a
career and a life
A place to build a
career and a life
Canada Life International MD Russell Keenan answers questions on the benefits and challenges of being based in Dublin
Hi Victor, tell us a little about yourself
I'm the owner and CEO of Abbey Wealth, which is a groups business. We've got two Irish companies, both headquartered out of Dublin in Fitzwilliam Square. We have been set out there since 2015. We've got an insurance mediation licence and in 2019 a MiFID licence as well, both direct. So two businesses, one that does insurance mediation for clients where they need insurance and the other one does investment advice. And both of those firms are directly regulated by the Central Bank of Ireland.
Why was Dublin your choice to set up the business?
I decided to set this up in Ireland; we had a look at quite a few different member states in the EU. Passporting was really important for us, but we also wanted to make sure that right in the heart of our offering, our clients are protected. For English-speaking expats there are very few European member states where your regulator is going to be speaking English.
Ireland is a country that's based around British law and has the same sort of protections as the UK. We've got an ombudsman here. We've got an investor compensation scheme. So if a company fails there are levels of protection for that. This is a really strong framework for customers. And I think that has to be at the heart of the proposition for financial advice.
Why is Dublin such an important base for Abbey Wealth?
It's a really excellent place to be based. It's one of Europe's major financial services centres. And that means you've got a pool of talent here. It's expensive to recruit people in Ireland – there's wage inflation because it's such a good place. But you get really high-quality advisors, compliance people, risk people, everything you need to run a really top drawer financial advice business.
The Brexit referendum took place on 23 June 2016. You were in the right place at the right time it seems… How important was that for Abbey Wealth?
That was a bit of luck. I woke up on the 24th of June 2016. Having cast my vote, and I personally was really quite shocked that our country decided to leave the EU but I suddenly realised that we were actually in a pretty good place as a business. I lived in the EU back then. And I knew we got lucky with where we set up because we had the ability to passport post Brexit.
What advantages does being in Dublin bring to a cross-border advice company? And why are there not more doing this?
It's very straightforward recruiting high-quality qualified advisors here in Ireland. The regulatory framework is very strong. So you can look at your business and make investments for the long term because you know the regulator has given great thought to how it wants markets to work.
Dublin is like London except it’s the world's biggest village. The networking opportunities are wonderful
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10 minutes with Victor France of Abbey Wealth
10 minutes with Victor France of Abbey Wealth
Victor France,
Abbey Wealth
And then Ireland is part of the EU member states so we can passport from here into every other member state. We have to go through a process but we can open branches in other member states so we've got a branch of our insurance mediation directive company in Spain. And we're working through opening a branch of our MiFID company too so you can set up in other countries dealing with one regulator rather than having to deal with different regulations in different countries. And [using] one single currency. People can travel easily around to different places visiting clients.
And then Ireland is part of the EU member states so we can passport from here into every other member state. We have to go through a process but we can open branches in other member states so we've got a branch of our insurance mediation directive company in Spain. And we're working through opening a branch of our MiFID company too so you can set up in other countries dealing with one regulator rather than having to deal with different regulations in different countries. And [using] one single currency. People can travel easily around to different places visiting clients.
What is Dublin like as a city to live and do business in?
It's like London except it’s the world's biggest village. Everybody knows everybody else. The networking opportunities in Dublin are wonderful. You can pretty well walk across the city hour or so in any direction so it's accessible. We've got world class accommodation.
We moved over in February of 2021, just after Brexit. We live in Wicklow mountains with amazing views, but we’re 10 minutes from the seaside and we're a half an hour from the Capital. I’m sounding like the Irish tourist board. It is a lovely place. But coming back to your last question. Why aren't there any other expat businesses here of any substance? The fact is that to be here requires a significant amount of investment in your business because it's an expensive city to work in.
We've got a really qualified pool of talent in the workforce. We have very, very high standards of regulation. So we need to have professional indemnity insurance. We have a number of levies that we've paid to support the regulatory framework and protect our clients, and a very, very strong reporting set of regulations making sure that our regulator, the central bank, knows that we're doing a really good job.
You are less than a year into the MBO, what was the thinking behind that? And what are the challenges and opportunities that 2022 and beyond brings for Abbey Wealth?
I worked for Abbey for seven years before we did the transaction and the management buyouts, so I really knew the business very well. The other two shareholders that I bought out had set up the company and had a very strong role in establishing Abbey, and they were ready to go on and do other things. I wanted to take Abbey forward and a lot of that was about a real focus on the EU and also looking after our clients outside the EU, and ensuring they've got the most fantastic service we can offer them as well.
Things are very, very unpredictable at the moment, Gary, in terms of the markets and I think you need to be a very financially strong firm with capability to move in different directions going forward, and we are just that.
We have a remote advising model so most of our clients get their advice through Teams, Zoom and telephone, and we've been using those technologies for 10 or 15 years. We're really good at engaging with customers when we’re not facing them. So I think our opportunity is to keep going in that direction and I know lots of other firms have started to move to a remote model during Covid because there was no option, but we're in a really good place with being an established firm that works in that in that way.
The biggest opportunity is to get more established with our customers. To become stronger financial planning businesses compared to being investment management businesses, so looking at a client's hopes and dreams, their objectives, and helping them to structure those in a way that can look after their generation but also then cascade through and make sure that their children and grandchildren are being looked after as well – generational planning.
Gary Robinson speaks to Victor France, CEO of Dublin-based cross-border advice firm Abbey Wealth, where they discuss the benefits of working and living in the Irish capital. And less than a year into an MBO, France reveals the challenges and opportunities that 2022 and beyond brings for Abbey Wealth
