Ireland’s updated Investment Limited Partnership (ILP) legislation will drive strong growth in private funds in 2021, according to Intertrust, a provider in specialised administration services. The ILP Bill in Ireland has passed all stages of the parliamentary process and is now awaiting final sign off by the president. The modernisation of the ILP Act 1994 is a “longstanding priority” of Ireland for finance strategy and will enhance the development of Ireland’s international financial services sector, Ireland’s Department of Finance explained. When enacted, the bill will serve as a means to promote investment, secure Ireland’s competitiveness and enhance Ireland’s regulatory environment in international financial services. Commenting on the updated legislation, the minister for finance, Paschal Donohoe TD, said: “The bill will allow Ireland to better compete for global private equity investment, with the aim of creating employment and securing Ireland’s reputation as an attractive location for the funds industry, which is subject to a robust and transparent regulatory regime.” The minister of state at the department of finance Seán Fleming noted that the legislation provides an opportunity to align transparency requirements that apply to other Irish investment fund vehicles. He explained the bill will also “ensure the highest international standards are met across Irish fund vehicles, in order to enhance our reputation as a well regulated financial centre”. Meanwhile, Intertrust highlighted the new ILP legislation makes Ireland an even more competitive jurisdiction for private investment funds and will likely see not only new business flow into Ireland but also established managers in other jurisdictions move domiciles. “We expect that the ILP amendments will drive strong activity in January 2021 and across the new year. It makes Ireland a highly attractive jurisdiction for private capital asset managers – especially those based in the UK, US, Europe and Asia,” commented Imelda Shine, managing director Ireland at Intertrust Group. Shine suggested the new legislation will result in further private investment fund structures being set up in Ireland. She said: “The country’s already a leading jurisdiction for both domiciled and non-domiciled funds – Ireland administers 40 percent of the world's alternative investment funds, for instance – but this new legislation could see that number rise significantly.” Among other benefits, the ILP regime and the pending updates to the alternative investment funds (AIF) Rulebook offer greater flexibility and cost-efficiencies. Intertrust explained this will allow improved operation of ILPs for managers and investors (including excuse and exclude provisions and stage investing) and a more straightforward process for capital withdrawals and distributions. In addition, it offers additional advantages such as the ability to establish umbrella ILPs and the possibility to migrate a limited partnership to Ireland. Elsewhere in Ireland recently, Universal-Investment Group has strengthened its market position as a European fund service platform by entering into the Irish fund market with the acquisition of Metzler Ireland. Keep an eye out for Asset Servicing Times’ next issue on 6 January to discover more about the funds industry in Ireland.
