While the lasting impact of the current crisis remains uncertain, many expect to see a temporary downturn within the Irish funds industry. Industry leaders in Northern Ireland (NI) and the Republic of Ireland are therefore looking to their neighbours for closer alignment and collaboration between the two regions in a post-coronavirus world.
Opportunities lie in four key areas: funds industry service provision, technology, portfolio and risk management, and fund governance.
Many speculate that the current crisis will lead to a review of global supply chains. Managers are now considering the possibility of localising their supply chain or re-shoring some of their key functionality closer to home. Here, managers are able to combine the technical expertise and strong relationship management skills to facilitate direct interaction with clients as opposed to before.
Remote working, cost pressures and the need to adopt greater agility to respond to clients are driving the funds industry to look further into technological solutions to overcome business challenges. Due to the pandemic, efforts will progress faster than ever before and will be seen especially in audit, risk and compliance and fund documentation.
As trade talks between the UK and EU continue, it remains uncertain as to what will happen to EU portfolio or risk management. However, managers could look to establish a NI hub for their delegation requirements as way to maintain access to both UK and EU investors while supporting operations in Dublin and London. Risk management will become increasingly important as external oversight continues to be integral to the alternative funds industry in the EU.
Currently, the Central Bank of Ireland (CBI) requires two locally resident directors for Irish-domiciled funds. However, this rule has caused capacity problems. Allowing individuals who are resident in NI, with the skills and experience, to be regulated by the CBI as local directors of Irish funds, would greatly alleviate current capacity problems.
Last month I, among industry leaders from the Republic of Ireland and NI, discussed the above key areas in an e-Seminar hosted by IFI Global and Catalina Consulting. These discussions provided valuable insights for the new All-Ireland Alternative White Paper, which details how the aforementioned four areas could facilitate both regions working collaboratively post COVID-19. The paper also outlines early practical steps in achieving this alignment. Click below to read the white paper in full: