Adam Donoghue and Pádraig Brosnan of Maples and Calder explain why Ireland is the domicile of choice for EU alternative investment fund managers.
After several challenging years during which the alternative asset management industry has grappled with the impact of the AIFMD - the most comprehensive regulatory restructure in the industry's history - the fog appears to finally be clearing (in Ireland, at least). In the six months since the 22 July 2013 deadline for AIFMD implementation across EU member states, we have seen a notable growth (and an even more substantial pipeline) in new Irish regulated structures.
On the product side, the marketing appeal of EU-domiciled AIFs in the new regulatory paradigm (which under AIFMD can provide a pan-European product passport) has substantially increased. Ireland's Qualifying Investor Fund (QIF) had already developed a brand as a leading onshore regulated product for hedge and other alternative funds. As part of the re-tooling of the Irish regulatory regime, the QIF (now recast as the Qualifying Investor Alternative Investment Fund or QIAIF) has been substantially enhanced and updated, offering managers superior structuring flexibility while still retaining robust regulatory oversight and investor protection measures.
The increased demand for QIF/ QIAIF products has, therefore, not been a surprise. A more interesting development is the emerging trend of managers also choosing Ireland as the EU domicile in which to establish an authorised alternative investment fund manager (AIFM).
TRANSPARENT AND PR AGMATIC REGULATORY PROCESS
A great deal of credit for this must go to the Central Bank of Ireland (CBI). In its role as competent authority for Ireland's implementation of the AIFMD, the CBI has taken a proactive and reasonable approach, and provided much-needed clarity and transparency during a period characterised in most EU member states by regulatory uncertainty and opacity.
For more than a year leading up to implementation, the CBI carried out a thorough consultation with industry on how best to adapt the Irish regime for AIFMD compliance. It published drafts of its revised AIF Rulebook and application forms months in advance of the July deadline, to facilitate managers seeking to be authorised early to avail of 'first mover' advantage on the AIFMD marketing passport. Moreover, once it became apparent that the formal July deadline would not be met in practice by the industry, and by most EU...