PREMIUM SPONSORS 30 March 2017 2 irishfunds.ie
SPONSORS 3 irishfunds.ie
Welcome Address Alan O’Sullivan Brown Brothers Harriman, Irish Funds 4 irishfunds.ie
Keynote Address H.E Daniel Mulhall Ambassador of Ireland to Great Britain 5 irishfunds.ie
Panel Discussion Investing in Real Assets Moderator : Moderator Vincent Coyne, William Fry Panellists Panellists : Michael Humphreys, Davy Isabella Pacheco, Blackrock Alexander Kalis, Milltrust International 6 irishfunds.ie
Irish Funds Updates Moderator : 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
CP 86 Update Michael Barr A&L Goodbody 8 irishfunds.ie
CP 86 AND WHAT IT MEANS FOR YOU • Background • Overview of new requirements • Timetable for implementation 9 irishfunds.ie
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 10 irishfunds.ie MAIN-35410888-1
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 11 irishfunds.ie MAIN-35410888-1
TRANSITIONAL ARRANGEMENTS Fund ManCo Authorised before Fund ManCo Authorised between Fund ManCo Authorised after 30/06/2017 Rules and Guidance 1/11/2015 1/11/2015 and 30/06 2017 (inclusive) 6 Managerial Functions 1/07/18 Applicable from date of authorisation Performanceof the organisation 1/07/18 Applicable from date of authorisation effectiveness role TheCBIwill onlyauthorise entities that are Effective supervision requirement/ 1/07/18 1/07/18 organisedinaway that complies with these locationrule provisions. Retrievability of records Guidance: Part I Delegate Oversight 4/11/15 Applicable from date of authorisation Applicablefromthe datethat aFundManCohas appointed a persontotheOrganisational Effectivenessrole, or 1/07/18 at the latest. Guidance: Part IIOrganisational Effectiveness Guidance: Part III Directors’ Time 4/11/15 Applicable from date of authorisation Commitments Guidance: Part IV Managerial Functions Applicable fromdateof 1/07/18 1/07/18 authorisation Retrievability of records: Applicable Guidance: Part VOperational Issues Retrievability of records: 1/07/18 Retrievability of records: 1/07/18 fromdateof authorisation. Dedicated email address: Dedicated emailaddress: Dedicated emailaddress: Applicable 30/06/17 (CBI looking for details of address 30/06/17 (CBI looking for details of from dateof authorisation. by end April) address by end April) Thisguidance is a reflection of the existing Fund ManCoguidance. Therefore no transitional arrangements apply. Guidance: Part VIProcedural matters 12 12 irishfunds.ie MAIN-35410888-1
Themes and Trends in Middle Office Servicing Fergus McNally EY 13 13 irishfunds.ie
PE & Investment Limited Partnership Adam Donoghue Maples and Calder 14 14 irishfunds.ie
THE RISE OF REGULATED PE/ REAL ASSET FUINDS Growth of PE globally Increased familiarity EU promotion of with outsourcing non-bank financing Rise of “hybrid” Post-2008 strategies “onshore drift” 15 15 irishfunds.ie
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 “Excuse and exclude” allocation of assets Distribution waterfalls Capital commitments, drawdowns and Ability to assume management control partly paid shares 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 16 irishfunds.ie
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 17 irishfunds.ie
Common Contractual Funds Philip Murphy KPMG 18 18 irishfunds.ie
Common Contractual Funds – an overview • First established for UCITS funds in 2003 History • Extended to non-UCITS in 2005 • Regulated asset pooling fund structure Purpose • 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 • Unincorporated body established by an Irish management company Legal & tax status • 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 • Over 70 funds created since 2003 Position to date • Tax transparency confirmed in over 20 investment jurisdictions including Australia, Canada, Germany and the US 19 19 irishfunds.ie
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 Dutch pension fund pension fund Distributions 0% WHT Dividends Irish Irish CCF 0% WHT corporate fund (ICAV ) Dividends 30% WHT US Equity US Equity US equity US Equity US Equity US equity Indirect investment via an Irish CCF – 0% Indirect investment via corporate fund – Irish withholding tax rate applicable under the US- fund subject to 30% US dividend withholding tax, Netherlands Double Taxation Agreement applicable, which represents an ultimate cost and drag on given transparency of the CCF from investor and return to the pension fund investment jurisdiction perspectives 20 20 irishfunds.ie
Common Contractual Funds – other advantages Risk diversification from collective investment Established infrastructure in Potential VAT Ireland – savings intellectual and IT Track record – in More efficient existence over 10 governance for years pension trustees 21 21 irishfunds.ie
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 22 irishfunds.ie
Coffee Break Kindly sponsored by Intertrust 23 23 irishfunds.ie
Ireland Strengthening our partnership in a post Brexit world Moderator : Moderator Kieran Fox, Irish Funds Panellists Panellists : Denis Curran, IDA Manish Vekaria, Credit Suisse Lara Aherne, SSGA 24 24 irishfunds.ie
Panel Discussion De-mystifying Brexit Solutions in Ireland Moderator Moderator : Pete Townsend, Norio Ventures Panellists Panellists : Ross Thomson , Fundrock Gayle Bowen, Walkers 25 25 irishfunds.ie
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