Irish Funds San Francisco Seminar

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2 Irish Funds San Francisco Seminar

3 Irish Funds San Francisco Seminar 2016 PREMIUM EVENT SPONSORS 3

4 Welcome Anthony Bassili Chapter Executive CAIA

5 Irish Funds Overview Kieran Fox Director Business Development Irish Funds

6 Who/what we are. industry association for all aspects of regulated cross border funds in Ireland representative function promotional function 114 member firms, located both in and outside Ireland key link to the authorities & policy makers in Ireland and beyond the industry s representative in Europe and globally a platform for collaboration, information sharing and driving outcomes & improvement

7 The Irish funds industry supports managers from all over the world full range of services for Irish domiciled funds as well as providing expert services for funds domiciled outside of Ireland Fund Manager Irish Administered Funds solutions are provided to managers across the full spectrum of investment strategies Irish Domiciled Funds UCITS Non Domiciled Funds AIFs

8 Long track record of delivery Total Assets under Administration, Euro billions Source: Central Bank of Ireland and Irish Funds

9 Scale, Diversity and Momentum to support you Irish Domiciled Funds Product Breakdown Euro billions Source: Central Bank of Ireland and Irish Funds

10 Irish Domiciled Funds: AIFs Qualifying Investor Alternative Investment Funds (QIAIFs) QIAIFs Net Assets and Number of Funds Source: Central Bank of Ireland

11 US Promoters of Irish Funds 123 US promoters of with >1,500 Irish domiciled funds (35% of total) & 7 German promoters of with 96 Irish domiciled funds & $47 billion in AUM > $1 trillion in AUM (50% of total) 81 UCITS funds 15 AIFs >1,100 UCITS funds >400 AIFs Index Tracking Equities, 7% Exchange Traded Bonds, 9% Asset Allocation of US managed Irish Funds Index Tracking Alternative Bonds, 3% Investment, 6% Equities, 11% Mixed Equities/Bonds, 2% Cash/Short-Term, 27% Bonds, 20% Source: Monterey Ireland Fund Report 2015 Exchange Traded Equities, 11%

12 What does the industry in Ireland provide? EU Single Market Access: product & service passports Investor Access: European Market and beyond 7th IMD WORLD COMPETITIVENESS 2016 YEARBOOK Service Excellence Low Costs Low Tax Environment 1 st FLEXIBILITY AND ADAPTABILITY OF PEOPLE Regulatory Environment Commitment from Government Infrastructure : language/legal/telecommunications 1 st IN EUROPE FOR COMPLETION OF 3 RD LEVEL EDUCATION

13 Brexit Update Pádraig Brosnan Partner Maples and Calder

14 Brexit Update Key Topics Brexit and possible implications AIFMD, UCITS, MIFID II, EMIR and MAR Possible solution? Establishment of Irish AIFM/UCITS Management Company ("Super ManCo")

15 Brexit Update Brexit Implications Background 23 rd June U.K. Referendum 24 th June result announced: 52% voting to leave the EU U.K.'s FCA release statement regarding U.K. law and EU legislation Following the result: Value of pound dropped Share prices slumped U.K. lost "Triple A" rating Interest rates cut David Cameron resigned, with Theresa May succeeding him as PM

16 Brexit Update Steps to Leave the EU U.K. invokes Article 50 of the Lisbon Treaty Theresa May last Sunday U.K. to invoke Article 50 by March 2017 Commences two year negotiation period Brexit by Q Withdrawal agreement needs approval from 20 countries Two year period can be extended with unanimous consent If no extension, U.K. ceases to be a member state

17 Brexit Update Imponderables There are a number of key uncertainties that remain in respect of Brexit, such as the form that Brexit will take Difference between "Hard Brexit" and Soft Brexit" What will the U.K. seek to retain of EU overlay?

18 Brexit Update Post Brexit What is Affected? Impact on U.K. Offices of U.S. Managers and U.K. limited partners AIFMD UCITS MIFID II European Markets Infrastructure Regulation ("EMIR") Market Abuse Regulation ("MAR") Tax Considerations

19 Brexit Update Post Brexit Solutions An Irish management company can obtain authorisation as: (i) a UCITS management company; or (ii) an AIFM; or (iii) a dual authorisation, i.e. both UCITS management company and AIFM (a "Super Manco") The Super ManCo can also extend its licence to perform MiFID individual portfolio management functions (management of non-fund portfolios, investment advice etc.)

20 Brexit Update Establishing a Super ManCo Should a client establish a 'Super ManCo' this structure could be used for both ICAV and UCITS structures. There are effectively 3 forms of Super ManCo: 1) Establishment of proprietary Super ManCo; 2) Appoint a third party/delegated Super ManCo; or 3) Utilise 'Designated Persons' to augment a proprietary Super ManCo. Application Process Timeline

21 Brexit Update Substance requirements for Super ManCo There are no express requirements on the type of staffing model to be applied to the Super ManCo. The discharge of functions and delegation structure are considered on the basis of qualitative criteria. Irish Super ManCos are permitted to delegate key functions out of Ireland to EEA and global based entities. It is common for such delegation to include tasks such as portfolio management, risk management, certain administration activities and distribution. The Central Bank has a clear and fast-track procedure for approving delegates who are authorised by other EEA competent authorities or globally recognised counterparts (including the major regulators in the U.S., Asia, EMEA region, LatAm andaustralia).

22 Brexit Update Delegation Model Option for Super ManCo Separate to establishing your own Super ManCo, there is the option of utilising a third party Super ManCo to act for both your AIFs and UCITS products. Hosted Super ManCo

23 Brexit Update Expertise Pádraig Brosnan Partner Direct: Pádraig specialises in advising leading international financial clients on the establishment, operation and regulation of all types of investment funds including UCITS, AIFs, hedge funds, private equity funds and other bespoke specialised fund products. In addition to advising the investment managers on the structuring of such funds in Ireland, he also advises other fund services providers including administrators, depositarys, investment advisers and prime brokers.

24 Irish Funds Update Panel Moderator Dan Forbes, DMS Governance Panellists Dervilla Lannon, Blackrock David Walsh, Dillon Eustace Niamh Geraghty, Deloitte

25 Distributor Interview Who is buying in Europe and what are they buying? Rob Drake Bury Street Capital Interviewer: Andrew Thorne BBH

26 Closing Remarks

27 Irish Funds San Francisco Seminar 2016 PREMIUM EVENT SPONSORS 27

28 Irish Funds San Francisco Seminar

29 Disclaimer: The material contained in this document is for marketing, general information and reference purposes only and is not intended to provide legal, tax, accounting, investment, financial or other professional advice on any matter, and is not to be used as such. Further, this document is not intended to be, and should not be taken as, a definitive statement of either industry views or operational practice. The contents of this document may not be comprehensive or up-to-date, and neither Irish Funds, nor any of its member firms, shall be responsible for updating any information contained within this document. 29