US giant Legg Mason to set up fund firm in Dublin after Brexit

Central Bank receives at least 10 insurance applications as UK prepares to leave EU

Legg Mason has more than $710 billion of assets under management. Photograph: Andrew Harrer/Bloomberg via Getty Images

Legg Mason has more than $710 billion of assets under management. Photograph: Andrew Harrer/Bloomberg via Getty Images

 

Legg Mason, the global investment firm with more than $710 billion (€670 billion) of assets under management, plans to set up a fund management company in Dublin to maintain access to investors in the European Union after Brexit.

“The firm has a management company in the UK and will have one in Dublin to allow us flexibility to serve clients, as needed,” a spokeswoman for the US group told The Irish Times. “As the outline of Brexit becomes clearer, we are well-positioned to respond as needed to ensure we are ready to serve our clients.”

The spokeswoman declined to say how many jobs would be involved. Legg Mason has a range of Irish domiciled and regulated bonds and equities funds, but the management company, under which the funds can be marketed around the EU, is based in the UK.

The news comes a week after UK asset manager M&G Investments announced plans to set up a management company in Luxembourg, quashing speculation that it might choose Dublin.

Global fund assets

More than $2 trillion of global fund assets are domiciled in Ireland in an industry that employs about 14,000 people. While the Central Bank has authorised a number of management companies (ManCos) for EU-regulated funds, known as undertakings for collective investment in transferable securities (Ucits) and alternative investment funds (AIFs), many firms are understood to be weighing setting up so-called super ManCos.

Industry sources said a number of investment firms were now looking at setting up such structures in Ireland as the UK begins its negotiations to leave the EU. They would typically employ between 20 and 50 people to demonstrate that they have substantive operations and that the “mind and will” of the entities are in Ireland.

Meanwhile, the Central Bank’s head of insurance supervision, Sylvia Cronin, said her office had received five insurance authorisation applications in the past four months as firms prepare for Brexit, while a further five companies have signalled a “firm intention” to apply to be regulated in the State. A further 20 insurers have contacted the bank to discuss authorisation, she told an event in Dublin.

Additional staff

Lloyds of London insurer Beazley said it planned to hire additional staff in Ireland to establish a European insurance company in Dublin, while rival Hiscox is also believed to have shortlisted Dublin as it sets up a base to service EU clients after Brexit. Cardiff-based motor insurance group Admiral also signalled it may move business to Dublin.

However, on Wednesday, US insurance giant AIG, which employs 400 staff in Ireland, decided to relocate its European regional headquarters from London to Luxembourg instead of to Dublin.

Separately, Fine Gael deputy leader James Reilly added to Brexit speculation when he said at an Oireachtas committee hearing he knew “for a fact that there are 450 jobs coming to Ireland from a major financial services company”. He didn’t identify the firm.

Taoiseach Enda Kenny told reporters in Brussels as he arrived for an EU summit that he was “absolutely convinced we will win substantial” financial services business from Brexit.