Cross-Border Distribution of UCITS

A CACEIS PRODUCT DEVELOPMENT PUBLICATION - 2011

CONTEXT

Dublin relies on its use of English to become the domicile of choice of Anglo-Saxon fund houses: According to Lipper’s “Ireland Fund Encyclopaedia”, published in June 2010, Ame- rican and British promoters total 84% of domiciled assets, 52% and 32% respectively. Of the € 963bn in Irish funds, € 759bn, equivalent to almost 80%, are UCITS funds. Moreover, both financial centres have specialised, or at least focused on different areas of expertise: Luxembourg was traditionally the place for long-only or plain vanilla fund as well as the stronghold of the German asset management industry. On the other hand, Dublin has been developing offshore products administered in Dublin and other hedge funds in general. Today, these characteristics tend to blend significantly as indicated in graph 14 that shows the widespread use of Luxembourg as domicile for sophisticated UCITS, with more and more hedge funds set up in Luxembourg and long-only UCITS set up in Dublin.

Both financial centres have specialised, or at least focused on different areas of expertise. Today, these characteristics tend to blend significantly.

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Graph 14: Country of domiciliation of sophisticated UCITS

LU 51% MT 1% AT 2% DE 3% ES 2% FR 13% GB 8% IE 20% IT 1%

Source: EFAMA “The evolving investment strategies of UCITS - EFAMA report on the so‐called “Newcits” phenomenon”, May 2011

Both are European “centres of excellence” for the set up of funds aimed at being sold worldwide. They currently account for nearly 90% of all worldwide cross-border funds (Luxembourg 75% and Ireland 14% - see Graph 11 “Evolution of Luxembourg and Ireland market share for cross-border funds registration”).

Cross-border distribution of UCITS | page 25