Over the course of the last 20 years, Ireland has earned a reputation as one of the most attractive jurisdictions in which to establish an investment fund, ranking amongst the most flexible and advantageous international fund domiciles due in no small part to the wide variety of funds (from traditional long only to sophisticated alternatives) which may be established under the Irish legal and regulatory system as well as Ireland's ability to react promptly to the demands of both fund promoters and investors.
One of the latest developments in Ireland's offering is the new re-domiciliation process introduced by the Companies (Miscellaneous Provisions) Act, 2009 (the "Act") which enables funds from the following jurisdictions to re-domicile to Ireland in an efficient manner:
The British Virgin Islands The Cayman Islands Jersey Guernsey Bermuda The Isle of Man The new regime enables re-domiciled funds to be authorised in Ireland as either UCITS or non-UCITS, principally as Qualifying Investor Funds ("QIFs"), provided that they meet the relevant criteria for the chosen fund structure.
The QIF is the most frequently used vehicle for hedge funds, FoHFs, private equity and real estate funds in Ireland due to its few investment restrictions, absence of borrowing or leverage limits, its fast track authorisation process and various liquidity options (open-ended, limited liquidity and closed-ended).
The UCITS structure is regarded as the European gold standard fund structure and once authorised in Ireland can be sold without further authorisation into the other 26 EU Member States. It is also sold in Asia (mostly Hong Kong, Japan, Korea), in Latin and South America and the Middle East. UCITS can house a variety of strategies provided liquidity, diversification and certain additional criteria are met.
Reasons for Re-Domiciling an Investment Fund to Ireland
There are many reasons why fund promoters may make the decision to re-domicile their investment fund to Ireland, including the desire to be based in a regulated jurisdiction, the desire to leverage off the availability of experienced and highly professional service providers or simply as a reaction to investor demand.
In the post-Madoff environment, there has been a significant trend for fund promoters to establish their new investment funds in highly regulated and well supervised jurisdictions such as Ireland, rather than in those which traditionally have been regarded as being less regulated.
In addition, many hedge funds and...