The Hedge Fund Law Report

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By Topic: Qualified Investor Funds

  • From Vol. 5 No.31 (Aug. 9, 2012)

    Considerations for Launching Qualified Investor Funds in Ireland: An Interview with Pat Lardner, Chief Executive of the Irish Funds Industry Association

    The popularity of Undertakings for Collective Investment in Transferrable Securities (UCITS) funds as well as the impending effectiveness of the Alternative Investment Fund Managers (AIFM) Directive has heightened the popularity of Ireland as a domicile for organizing hedge funds and alternative retail funds.  In 2011, Ireland experienced net inflows of approximately €62 billion in assets in UCITS funds, approximately €50 billion more than the second-place domicile, representing 8 percent growth over 2010.  Additionally, according to figures from the European Fund and Asset Management Association and the Central Bank of Ireland (Central Bank), Ireland-domiciled non-UCITS funds have experienced considerable growth in recent years, up 35 percent in 2010; 15 percent in 2011; and 4.3 percent in the first quarter of 2012.  Assets in Ireland-domiciled non-UCITS funds are up from €200 billion in 2010 to €250 billion as of June 2012.  Additionally, as of June 2012, the number of qualified investor funds (QIFs) climbed to an all-time high of 1,420, and assets have grown to €182 billion.  In light of this growth and the consequent importance of Ireland as a hedge fund jurisdiction, The Hedge Fund Law Report recently interviewed Pat Lardner, Chief Executive of the Irish Funds Industry Association.  The general purpose of the interview was to enable Lardner to elaborate on considerations for hedge fund managers in establishing funds and managing investments and operations in Ireland.  In particular, our interview covered, among other things: the process for organizing a UCITS fund; the service provider and reporting requirements applicable to Irish UCITS funds; the comparative advantages and disadvantages of establishing UCITS funds in Ireland; measures taken to make Irish UCITS funds more attractive to Asian and Latin American investors; recent developments impacting the appeal of UCITS funds; common mistakes made in organizing UCITS funds; advice for managers establishing Irish UCITS funds; a description of the QIF regime and the organization and fund authorization process; who constitutes a “qualifying investor” eligible to invest in a QIF; governance, service provider, reporting and regulatory examination requirements applicable to QIFs; comparative advantages and disadvantages of the QIF regime; advice for fund managers looking to establish QIFs; the new SICAV corporate structure in Ireland; and various related topics.  This article contains the full transcript of our interview with Lardner.

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