DUBLIN has topped the league in a survey of the offshore fund businesses of Dublin, Guernsey, the Isle of Man and Jersey. At the end of 1995 the IFSC in Dublin had $21 billion (£13.22 billion) under management in 612 funds. The closest competitor was Guernsey with $15.5 billion in 121 funds, while Jersey came last with $18 billion in 384 funds.
Luxembourg, the only other country which can attract the cross border investments, is still the major player in Europe, however, and is way ahead of Dublin with $350 billion of assets.
The funds come from a variety of sources. The bulk, or almost 60 per cent of assets, from cross border investments in the European Union. Pension fund money and institutional investment accounts for just under 20 per cent and individual savers' money for almost 25 per cent.
According to the survey from Fitzrovia International, a London based investment fund research and consultaacy company, Dublin has transformed into a powerful European investment centre over the last five years. During 1994, the average number of new fund launches exceeded three per week. "This is an amazing statistic for any fund centre," according to Mr Paul Moulton, managing director of Fitzrovia.
1992 was the year that Dublin started to take off as a fund management centre. Large funds operated by GT, Bankers Trust and Coutts were all authorised that year.
Last year, although the number of scheme authorisations fell back, it was still comfortably ahead of the number for 1990 or any year previously, and around the same level as 1993.
Dublin may even be on its way to catch up with Luxembourg, according to Mr Moulton.
"Luxembourg's growth has been static for 18 months, while Dublin is still growing. It is only a matter of how far and how fast Dublin can go."
The survey identified 117 promoters of funds authorised in Ireland. Measured by assets, the top 10 of these are GT, Morgan Grenfell, Barings, Commerzbaak, Dresdner Bank, AIG, Bankers Trust, Singer & Friedlander, Bank of Ireland and Chase. These 10 account for 55 per cent of total assets.
The total market by number of funds is more evenly divided. The same 55 per cent share is divided among the top 18 rather than the top 10 promoters. As a result the largest promoter by fund number AIB with 33 funds is only the 14th largest by assets with $437 million. The average size of its funds is just over $13 million, compared to GT's average of $97 million.
Almost 45 per cent of all the funds' assets originate in Britain with the US and Germany on 20 per cent and 12 per cent respectively. The survey classes GT, Morgan Grenfell and Barings as of British origin, even though their parent companies originate from Liechtenstein, Germany and the Netherlands respectively. These three are the largest promoters by assets.
However the real measure of who does the business in the IFSC can be judged by looking at who administers and acts as custodians for funds here. There are just 15 custodians of investment funds in Dublin. The custodians hold the assets as a safeguard to the original company simply disappearing They also deal with the share certificates and hold the cash balances and this is thus one of the main fund management businesses carried out in the IFSC.
Interestingly a US bank, Chase Manhattan is the largest with a 22.5 per cent share just beating Bank of Ireland which has a 20.6 per cent share and $4.34 billion under custody. A future merger with Chemical Bank's custody business will boost Chase Manhattan's market share of fund numbers by 54 per cent but its market share of assets by just 11 per cent. Bank of Ireland manages more funds, but they are smaller funds on average than Chase Manhattan's.
Allied Irish Bank is in fifth place. It manages a 9.2 per cent share of the custody market with 1.94 billion of funds. Other major players are Morgan Grenfell with $3.23 billion and Barings with $2.40 billion.
The other key day to day involvement with the funds is in administration. The administrators maintain the share register and value the funds on a daily or weekly basis.
Bank of Ireland is top of the administrators table with a 15.8 per cent share. Morgan Grenfell is second with 15.3 per cent and Barings third with 11.7 per cent. AIB does not figure in the top 10 administrators although it is in fourth place in terms of market share by fund numbers. Ulster Bank comes in fifth with a 6.4 per cent share and $1.35 billion.
The IFSC is also vital to the wider financial community in Dublin, generating substantial business for professional companies. Coopers & Lybrand has almost 37 per cent of the auditing market with $7.76 billion under its supervision. KPMG comes in second place with 29 per cent, comfortably ahead of Price Waterhouse in third position with almost 14 per cent of the market. The top two change places when share is measured in terms of fund numbers.
A&L Goodbody wins the lion's share of the legal advice market by assets with almost 45 per cent of the market and an average fund size of $57 million. Arthur Cox and Dillon Eustace come a close second and third on 18.8 per cent and 17.4 per cent of the market respectively. All three are closely matched in terms of market share by fund numbers. But legal advisers have little involvement on an ongoing basis as they mostly get involved with the setting up of a fund.
Many of the funds want to gain respectability through a stock exchange listing. Around 59 per cent of fund numbers and 66 per cent of total assets within Dublin funds are listed on the stock exchange. Among sponsoring brokers NCB is completely dominant with almost 70 per cent of assets and just under 60 per cent of the number of funds. Davy Stockbrokers is in second place and Goodbody third.
The sponsoring broker introduces and arranges the initial contact with the exchange.
The funds analysed include all authorised unit trusts, Ucits funds and designated investment companies.
The Dublin, Guernsey, Jersey and Manx volumes each contain approximately 450 pages of analysis and cost £399 plus £29 delivery each. They can be contacted by telephoning 44-171-224-3284.
