Cross-Border Distribution of UCITS

A CACEIS PRODUCT DEVELOPMENT PUBLICATION - 2011

CONTEXT

Graph 13 displays the evolution of total net assets of Irish-domiciled funds over the last decade.

Graph 13: Evolution of total net assets of Irish domiciled funds (2000-2010)

500 400 300 600 700 800 900 1,000 in € bn

963

808

749

730

The breakdown by assets classes in the Irish fund industry is not available

647

587

435

363

304

285

208

0 100 200

2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2000

Source: Central Bank of Ireland

Nonetheless, the international banking crisis was not the only thing to strike Ireland since then: The country suffered from an over-dependence on property revenues, domestic credit expansion and so forth, up to the point when, at the end of November 2010, the Irish govern- ment set a four-year austerity plan in motion named “National Recovery Plan” to reduce Ireland’s deficit to 3% of GDP by the end of the year 2014 18 . The national emergency seems not to have impacted the fund industry so far as the government was smart to quickly imple- ment regulation facilitating local business, among which the welcome re-domiciliation law, attracting a significant number of funds from offshore domiciles. This legislation coupled with the low Corporate Tax rate continues to attract business to the country and recent statistics show that Ireland is still up and running as a state-of-the-art financial centre. A few factors have historically boosted the fund servicing activities of Luxembourg and Ireland, such as their membership of the European Union and the Euro zone, the countries’ legal and fiscal framework and their strong attractiveness for well-educated young gra- duates coming from all over Europe and willing to relocate in those two countries offering high standard of living. Luxembourg benefits from its well-known reputation of being an attractive place to work, with low unemployment rates, stable government, stimulating financial sector environment “grounded in the principle of investor protection” 19 . Hence, the success of the country at- tracts a multi-lingual workforce, employed by many international promoters from 42 dif- ferent countries 20 worldwide that set up their funds in the Grand Duchy. According to the CSSF 21 , at the end of March 2011, the United States accounted for 22.7% of total assets, from Germany 17.2%, from Switzerland 15.1%, United Kingdom 12.9%, France 8.3% and so forth. Italian, Belgian, Dutch and Swedish promoters all have a good proportion of total assets domiciled.

18 For more details on the “National Recovery Plan 2011-2014” please refer to the website www.budget.gov.ie 19 Source http://www.lff.lu/legal-environment/legal-and-regulatory-environment/ 20 Source: ALFI, August 2010 21 “Commission de Surveillance du Secteur Financier”, the prudential supervisory authority in Luxembourg

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