Investment Funds and Ireland – December 2011

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invest-funds-euro-dec-11.JPG [Figures available here.]

Man, they do not make it easy.

According to the ECB (here):

“Investment funds” (IFs) are collective investment undertakings that: (i) invest in financial and non-financial assets, within the meaning of the European system of national and regional accounts in the Community (ESA 95), to the extent that the objective is to invest capital raised from the public; and (ii) are constituted pursuant to Community or national law.

Included within the definition of IFs are: (a) undertakings whose units or shares are, at the request of the holders, repurchased or redeemed directly or indirectly out of the undertaking’s assets; and (b) undertakings which have a fixed number of issued shares and whose shareholders have to buy or sell existing shares when entering or leaving the fund.

Regulation (EC) No 958/2007 of the European Central Bank of 27 July 2007 gives a more detailed definition (here).

The ECB gives a breakdown of the Irish-domiciled investment funds by type, for Q3 2011 the figures are here.

Bonds – 776

Equities – 1,544

Hedge – 642

Mixed – 771

Real Estate – 21

Other – 278

Total – 4,022

However, the spreadsheet of the investment funds listed in Ireland has 7,219 entries. The excel file is here on google docs, the funds by breakdown of address is here:

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A map of locations here:

The Irish Funds Industry Association states that in December 2011 there was just over €1 trillion in Irish-domiciled investments funds.

At this stage of the investigation, I have no idea as to the reason for the difference in the two sets of figures. Hopefully that’ll come with more digging. (Maybe the Irish Fund Industry counts money market funds in its figures?)

According to the Irish funds Industry:

Over the past decade, Ireland has become one of a select number of key locations in the world where fund promoters establish, launch and service investment funds… Over 380 fund promoters have Irish domiciled funds as part of their distribution strategy, including many of the world’s most significant players.

It’s correct about the ‘over the last decade’ part anyway.

In January 2000 the number of money market funds in Ireland was 17 – by December of that year the number was 129. It reached a peak in February 2009 with 279. (See figures for 2000 here and follow links for 2009.)

The explosion in credit institutions , however, took place over Christmas and new year, 2008/2009.

In November 2008 the number of credit institutions listed as domiciled in Ireland was 81.

One month later, December 2008, that number was 501 – and increase of over 600 per cent in just 4 weeks.

Ireland’s attraction as a tax haven no doubt held a certain attraction in the wake of the 2008 crisis. and going by the figures, a good proportion of the 390 investment funds mention by the Irish Funds Industry arrived here after November 2008.

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Photo of  5 Harbourmaster Place, IFSC, Dublin 1, where around 1,600 FVC products are administered courtesy of Daft.ie.