56 financial firms entered or expanded Irish operations in 2020

Despite Covid cloud, financial services sector continues to enjoy Brexit-related growth

New York-based Neuberger Berman is one of the  56 financial firms that either entered the Irish market or expanded their presence here in the first half of 2020.

New York-based Neuberger Berman is one of the 56 financial firms that either entered the Irish market or expanded their presence here in the first half of 2020.

 

Some 56 financial firms either entered the Irish market or expanded their presence here in the first half of 2020, including UK-based Janus Henderson, French asset manager Amundi and New York-based Neuberger Berman, according to Irish Funds, the umbrella group for the industry.

This comes on the back of other high-profile entrants such as Legal & General Investment Management (LGIM), Eaton Vance, Morgan Stanley and Legg Mason.

While much of the economy remains under a cloud because of Covid-19, the financial services sector here is thriving. Much of the influx is related to Brexit and specifically the need to be able to sell products and services within the EU after the UK’s exit.

“In the midst of the negative news stories and announcements about the disruption and dire impact of the pandemic on a range of industries, there are segments of the Irish economy which have proven remarkably resilient,” Irish Funds chief executive Pat Lardner said.

“One such industry, Ireland’s asset management and investment funds industry, may not be universally known or understood, but it is staffed by professionals living across every county in Ireland and they have never been as busy,” he said.

The sector here now includes 150 firms, employing 16,000 people, and contributes more than €840 million annually in taxes to the exchequer, Mr Lardner said.

“While financial markets have been especially volatile since the pandemic struck, it hasn’t deterred investors from continuing to deploy their capital through Irish regulated investment funds,” he said. “From the beginning of 2020 up until the end of May, which incorporates both a significant sell-off in markets and subsequent rebound, an additional €46.4 billion has been invested via regulated funds based in Ireland.”

Importance of Ireland

The influx of financial firms here also highlights the importance of Ireland, which is now the only English speaking hub in the EU, according to Mr Lardner. “In a competitive global marketplace where every country is looking to re-build employment, this type of high-value activity, and the jobs which support it, is much sought after,” he said.

A study by consultancy firm Indecon, published last year, found there were 7,290 Irish-domiciled funds worth in excess of €2.5 trillion established and serviced here as of the end of 2018, confirming the Republic’s status as a major international hub for the industry.

It also found that Irish-domiciled funds were consistently attracting a high proportion of sales into European-domiciled funds, accounting for up to 38 per cent of all the net sales of investment funds in Europe from 2016 to 2018.

As well as Brexit, the Government’s Investment Limited Partnership Bill, which is designed to make it easier for private equity investors to invest in funds, is expected to further enhance investment here.