PREMIUM SPONSORS. 30 March irishfunds.ie

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2 PREMIUM SPONSORS 30 March irishfunds.ie

3 SPONSORS 3 irishfunds.ie

4 Welcome Address Alan O Sullivan Brown Brothers Harriman, Irish Funds 4 irishfunds.ie

5 Keynote Address H.E Daniel Mulhall Ambassador of Ireland to Great Britain 5 irishfunds.ie

6 Panel Discussion Investing in Real Assets Moderator: Vincent Coyne, William Fry Panellists: Michael Humphreys, Davy Isabella Pacheco, Blackrock Alexander Kalis, Milltrust International 6 irishfunds.ie

7 Irish Funds Updates Moderator: Damian McAree, MUFG Panellists Panellists: CP86 - Michael Barr, A&L Goodbody Themes and trends in middle office servicing - Fergus McNally, EY Investment Limited Partnership - Adam Donoghue, Maples and Calder Common Contractual Funds - Philip Murphy, KPMG 7 irishfunds.ie

8 CP 86 Update Michael Barr A&L Goodbody 8 irishfunds.ie

9 CP 86 AND WHAT IT MEANS FOR YOU Background Overview of new requirements Timetable for implementation 9 irishfunds.ie

10 BACKGROUND TO CP86 Has been in germination for a couple of years Keeping up with and front running good corporate governance requirements Addressing the issue of substance Who does it apply to? Irish UCITS Mancos, UCITS, SMICs, AIFMs and internally managed AIFs (with limited impact on externally managed fund structures) Non-Irish UCITS Mancos and AIFMs passporting into Ireland are not affected 10 irishfunds.ie MAIN

11 OVERVIEW OF THE NEW RULES Streamlined managerial functions Organisational effectiveness role Supervision/location of directors and designated persons Rationale for board composition Retrievability of records 11 irishfunds.ie MAIN

12 TRANSITIONAL ARRANGEMENTS Rules and Guidance Fund ManCo Authorised before 1/11/2015 Fund ManCo Authorised between 1/11/2015 and 30/ (inclusive) Fund ManCo Authorised after 30/06/ Managerial Functions 1/07/18 Applicable from date of authorisation Performanceof the organisation effectiveness role Effective supervision requirement/ location rule Retrievability of records 1/07/18 Applicable from date of authorisation 1/07/18 1/07/18 The CBI will onlyauthorise entities that are organisedinaway that complies with these provisions. Guidance: Part I Delegate Oversight 4/11/15 Applicable from date of authorisation Guidance: Part II Organisational Effectiveness Guidance: Part III Directors Time Commitments Applicablefromthe datethat a Fund ManCo has appointed a person to the Organisational Effectivenessrole, or 1/07/18 at the latest. 4/11/15 Applicable from date of authorisation Guidance: Part IV Managerial Functions 1/07/18 1/07/18 Applicable from date of authorisation Guidance: Part V Operational Issues Retrievability of records: 1/07/18 Retrievability of records: 1/07/18 Dedicated address: Dedicated address: 30/06/17 (CBI looking for details of address 30/06/17 (CBI looking for details of by end April) address by end April) Retrievability of records: Applicable from dateof authorisation. Dedicated address: Applicable from date of authorisation. Guidance: Part VI Procedural matters Thisguidance is a reflection of the existing Fund ManCoguidance. Therefore no transitional arrangements apply. 12 irishfunds.ie MAIN

13 Themes and Trends in Middle Office Servicing Fergus McNally EY 13 irishfunds.ie

14 PE & Investment Limited Partnership Adam Donoghue Maples and Calder 14 irishfunds.ie

15 THE RISE OF REGULATED PE/ REAL ASSET FUINDS Growth of PE globally Increased familiarity with outsourcing EU promotion of non-bank financing Post-2008 onshore drift Rise of hybrid strategies 15 irishfunds.ie

16 IRELAND AS A LOCATION FOR PE FUNDS Many leading PE managers already active in Ireland Irish AIF regulatory framework already allows key PE fund mechanics: Carried interest Multiple and longer initial closings Distribution waterfalls Capital commitments, drawdowns and partly paid shares Excuse and exclude allocation of assets Ability to assume management control over an issuer ICAV is so flexible that it can cater for most PE features BUT Vehicle of choice in PE/ RE industry is limited partnership Ireland does have LP options, but outdated (1907 and 1994) and less flexible than other leading domiciles 16 irishfunds.ie

17 PROPOSED LEGISLATIVE REFORM Government fully supportive: LP reform is a stated priority in its IFS 2020 strategy Investment Limited Partnership (Amendment) Bill is on 2017 legislative programme. Many proposals reflect equivalent recent amendments to UK s 1907 LP Act Amendments expected to include: - Streamlining of redemption procedures - Conforming liability of service providers with other fund models - Expanding scope of permitted safe harbour activities by LPs - Ability to make non-material changes to LPA without investor consent - Ensuring appropriate level of access to register and details of LPs - Ability to create umbrella partnerships - Expanding scope of eligible GPs and LPs 17 irishfunds.ie

18 Common Contractual Funds Philip Murphy KPMG 18 irishfunds.ie

19 Common Contractual Funds an overview History First established for UCITS funds in 2003 Extended to non-ucits in 2005 Purpose Regulated asset pooling fund structure Designed to allow pension fund and other institutional investors avail of advantages of collective investment, without withholding tax disadvantages of investing via a regulated fund vehicle Legal & tax status Unincorporated body established by an Irish management company Transparent from an Irish legal and tax perspective each investor treated as a tenant in common deemed to hold a proportionate share of the underlying assets in a co-ownership capacity Position to date Over 70 funds created since 2003 Tax transparency confirmed in over 20 investment jurisdictions including Australia, Canada, Germany and the US 19 irishfunds.ie

20 Common Contractual Funds overview of tax efficiencies Intention of a CCF is to ensure investors are subjected to the same tax treatment in a collective investment vehicle, as if they held underlying assets directly Dutch pension fund Dutch pension fund Distributions 0% WHT Irish corporate fund (ICAV) Dividends 30% WHT Irish CCF Dividends 0% WHT US Equity US Equity US equity US Equity US Equity US equity Indirect investment via corporate fund Irish fund subject to 30% US dividend withholding tax, which represents an ultimate cost and drag on return to the pension fund Indirect investment via an Irish CCF 0% withholding tax rate applicable under the US- Netherlands Double Taxation Agreement applicable, given transparency of the CCF from investor and investment jurisdiction perspectives 20 irishfunds.ie

21 Common Contractual Funds other advantages Risk diversification from collective investment Established infrastructure in Ireland intellectual and IT Potential VAT savings Track record in existence over 10 years More efficient governance for pension trustees 21 irishfunds.ie

22 Common Contractual Funds & Alternative Investments While CCFs were initially designed for pension funds, they may be used by any entity, other than individuals, seeking to avail of a tax transparent structure. CCFs may in some case represent a suitable regulated collective vehicle for aggregating interests of investors requiring a regulated transparent structure. In a post BEPS world, treaty access of corporate regulated funds may be more difficult to manage in practice CCFs may represent a suitable alternative in some instances! 22 irishfunds.ie

23 Coffee Break Kindly sponsored by Intertrust 23 irishfunds.ie

24 Ireland Strengthening our partnership in a post Brexit world Moderator: Kieran Fox, Irish Funds Panellists: Denis Curran, IDA Manish Vekaria, Credit Suisse Lara Aherne, SSGA 24 irishfunds.ie

25 Panel Discussion De-mystifying Brexit Solutions in Ireland Moderator: Pete Townsend, Norio Ventures Panellists: Ross Thomson, Fundrock Gayle Bowen, Walkers 25 irishfunds.ie

26 Structuring options: detail SMIC Super ManCo w/ Delegates ( v1 ) Super ManCo w/ Add-on Authorisations ( v2 ) Authorisation timeline 3-4 months 3-4 months 4-6 months 5-9 months MiFID Firm Activities (PM = portfolio management, RM = risk management) Manage other fund umbrellas? Manage/advise Segregated Mandates? Retain oversight of PM & RM but delegate day to day activities Retain oversight of PM & RM but delegate day to day activities Performs day-to-day PM & RM No Yes Yes Yes No No Yes, via add-on licenses without need for MiFID delegate Full range of services Yes Substance requirements 2 Irish-resident directors 2-3 Designated Persons Irish-resident directors Designated Persons Irish-resident directors 2-3 Designated Persons 1 Chief Investment Officer / Managing Director Head of Risk/Compliance and Finance, internal audit. 2 Substantive presence required in Ireland 3 Specific roles based in Ireland 2 : Legal & compliance Financial control Risk Management Delegation / Outsourcing CBI permits delegation of day-to-day PM and/or RM activities CBI permits delegation of day-today PM and/or RM activities CBI permits delegation of day-to-day PM and/or RM activities Outsourcing allowed (including to other EEA states or 3 rd countries) if in line with applicable law and best practice 1. Designated persons not all required to be Irish resident and can be directors or employees of the Investment Manager. For low PRISM rated firms, half of the directors and at least 2 Designated Persons performing half of the managerial functions are required to be EEA-resident. For medium PRISM rating firms, 3 directors or 2 directors plus 1 designated person should be Irish resident. 2. The need for specific roles may differ on a case-by-case basis. 3. Substantive presence for MiFID: the firm s board and management run the firm from Ireland and make decisions in Ireland with sufficient staff and resources to manage the risks. 26 irishfunds.ie

27 Structuring options: pros & cons SMIC Super ManCo w/ Delegates ( v1 ) Super ManCo w/ Add-on Authorisations ( v2 ) MiFID Firm Capital Required 300,000 initial capital (which can be met using shareholder funds) One quarter of its total expenditure in its most recent annual accounts and 125,000 plus an additional amount of up to 0.02% of any AUM exceeding 250m whichever is greater, subject to a maximum amount of 10million One quarter of its total expenditure in its most recent annual accounts and 125,000 plus an additional amount of up to 0.02% of any AUM exceeding 250m whichever is greater, subject to a maximum amount of 10million Will be calculated in accordance with CRD IV / CRR requirements Pros Works well if no other funds managed Less staff on the ground Can manage multiple fund umbrellas Can passport to other EEA jurisdictions Less staff on the ground than v2 or MiFID option Can perform full PM activities or delegate Can manage multiple fund umbrellas & mandates Can passport to other EEA jurisdictions Less staff on the ground than MiFID option Wide range of permissions/potential business lines available Can passport throughout EEA without seeking additional authorisations Cons Cannot perform all PM activities Cannot manage or advise mandates Must delegate to regulated investment manager Cannot perform all PM activities Cannot manage mandates More staff on the ground than SMIC or v1 option Add-on authorisations possible, which may be subject to local review when passporting to other EEA jurisdictions More staff on the ground Subject to CRD IV / CRR requirements MiFID 2 changes in Jan irishfunds.ie

28 Networking Drinks Kindly sponsored by Capita Asset Services 28 irishfunds.ie