Dublin `could become fund centre' in EU
Dublin could become a centre for fund management following the introduction of the euro, according to the Irish Association of Investment Managers (IAIM).
Speaking at a debate on the future of the industry in Dublin yesterday, IAIM chairman Mr Gavin Caldwell argued that Irish-based investment groups would withstand the increased competition from foreign counterparts following Economic and Monetary Union (EMU). He said that Dublin was well placed to establish itself as a centre of excellence for fund management within the EU.
"Irish asset management firms will be able to compete successfully in the new euro environment with the advantages of an ongoing supply of qualified personnel, the existence of an equity-oriented investment culture, and the support of an historically superior investment performance using international benchmarks," he said.
The association points to the smaller teams, by international standards, employed in the Irish investment market and the long tradition of investing a substantial part of portfolios in other markets as offering considerable advantages.
His confidence was not shared by Mr Shane Whelan, director of Friends First Asset Management, who predicted that pension funds would increasingly be managed from centres such as London and Europe, with the introduction of the euro. He asserted the single currency would create a pan-European fund management industry which would undermine the Irish pension funds industry.
"With history, geography and economics hostile to the future of our industry, a little bit of bad luck will push the industry here under critical mass. There may be no chance if Irish funds under-perform those managed from other European centres in the early years of the euro," he said.
He suggested the investment community here would find itself unable to compete with the larger European groups which, through their size, could yield higher rates of return on investments.
Mr Willie Cotter, Bank of Ireland Asset Management chief executive, took issue with these comments, dismissing factors such as location and size as a posing a potential disadvantage.
"We shouldn't underestimate just how sophisticated the international investment marketplace has become in this context. The fact that an investment manager is based in Dublin is of no consequence. What counts is the quality of investment expertise and the track record that a manager can demonstrate and that's not a location issue, its an investment talent issue.
"In this regard Ireland competes very favourably with anyone in the global marketplace."