Funds industry brings almost €840m to exchequer – report

The Irish funds industry contributes nearly €840 million in direct taxes annually to the exchequer and employs more than 16,000 people, a new industry-commissioned report has found.

The study by consultancy Indecon found there were 7,290 Irish-domiciled funds worth in excess of €2.5 trillion established and serviced here as of the end of last year, confirming Dublin’s and Ireland’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.

Indecon's Economic Impact Assessment report was launched by the Minister of State for Financial Services, Michael D'Arcy, and Pat Lardner, CEO of Irish Funds, the lobby group for the industry.

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It found that the growth in the sector brings with it a €14 billion contribution to Irish economic output.

The study comes ahead of the Government's Investment Limited Partnership (ILP) Bill, which is designed to make it easier for private equity investors to invest in funds, and ahead of Brexit, which is expected to result in further business for the industry. However, there are also fears of a clampdown on financial services across the EU in the absence of the UK, its chief advocate.

Irish Funds is in the process of setting up an office in Brussels to beef up its European Union advocacy ahead of Brexit.

Journey

"This has been a 30-year journey and one we want to build on. If we can grow the industry in Ireland, we see no reason why we would not be looking at direct employment closer to 20,000 and a tax contribution of €1 billion annually," Mr Lardner said.

The funds industry is a vital sector in our overall international financial services sector

“We should not forget, however, that we operate in a highly competitive global market. While we have earned the right to compete and serve our customers, we should never take this for granted,” he said.

Also launching the report, Mr D’Arcy said: “The funds industry is a vital sector in our overall international financial services sector.”

“The ecosystem for funds has been built up over 30 years and now represents a recognised global centre of excellence. Today’s assessment, which was completed by Indecon, is a welcome addition to the information and research on the investment funds industry in Ireland, which we will strive to continue to grow and diversify through the ‘Ireland for Finance’ strategy,” he said.