Fund Services & Management Companies Market Update Q2 2017
The funds market in Ireland continues to have an upward trajectory as we move into Q3. So far, this year the level of funds under administration stands at roughly €4.1 trillion. This is split between international funds that are domiciled in Ireland and abroad. This comes off the backdrop of Ireland solidifying its position as a leading hub for back-office functions for hedge funds. Despite global economic uncertainty, it is expected that assets under administration in Ireland will continue to rise to €4.7 trillion by the end of the decade.
The Fund Services market is currently in a resilient state with opportunities available in global 3rd party administrators and boutique fund administrators. The key areas for hire remain to be Fund Accounting, Investor Services, Risk & Compliance and Regulatory professionals. With these skills in demand, salary levels have grown for Funds professionals and this is turn has led to a rise in counter offers.
Despite global economic uncertainty, it is expected that assets under administration in Ireland will continue to rise to €4.7 trillion by the end of the decade.
During Q2, many candidates returned to the market following their company’s payout of bonuses in Q1. The bonuses tended to be between 5-10% for junior/mid-level and 10-15% for more senior roles. The main reasons for candidates changing roles remain to be a strong benefits package, work/life balance, a clear path for career progression as well as the opportunity for either flexible working hours or to work from home.
The first half of the year has highlighted, there is an increased demand for Fund Accountant roles across all levels, in particular for Fund Accountants with 1-2 years’ experience and Senior Fund Accountants with 2-4 years’ experience. Keeping with this trend, the requirement for specialist skills such as hedge, private equity and hybrid funds experience still remains.
Similar to fund accounting, there is a steady rise in demand for Investor Services professionals. This is largely due to Fund Administrators winning new mandates in Q1 which puts immediate pressure on a business to hire Investor Services professionals with A-Z experience and onboarding exposure.
Risk & Compliance
The requirement for Risk & Compliance professionals continues to show no sign of abating. This is a result of businesses needing to be more transparent in order to be fully compliant with the latest EU directives. Many candidates in operational roles have seen this increase as an opportunity to up-skill and side-step into a compliance function.
Lastly, another area of skills which remain in demand is the role of Regulatory professional’s due to a more stringent regulatory environment by the Central Bank. Ireland continues to have a strong reputation for robust and efficient regulations that aid the Fund Administration market, as well as be seen as the destination for businesses as their EU hub post-Brexit. The Central Bank’s ruling on risk and disclosure are considered sage and the Irish regulatory framework provides for independent, regulated administration and trustee/custodian functions.
Dublin Growth Post- Brexit
Prior to the decision to activate Article 50, Ireland has seen a number of businesses enter the market such as Opus, Alter Domus and Virtus. Following on from the activation of Article 50, this trend sets to continue as companies such as FundRock and Legg Mason have also decided to set up an Irish operation. Likewise, JP Morgan is looking to increase their foothold in Dublin and are currently looking at additional office space. Bank of America Merrill Lynch has said it views the Irish capital as its default EU Centre, given it has a banking license here and employs more than 600 people across two locations.
The Rise of the Manco’s
The third-party management company is a concept originating with UCITS. It has taken its evolutionary step with AIFMD. The traditional model has to evolve from focusing on regulatory compliance to emphasising on asset class and actual operations. Third-party, or ‘rented’, Mancos are used by fund firms that need to establish a material presence in EU jurisdictions to meet regulatory governance requirements for traditional and alternative funds.
The Manco industry is readying itself for an expected increase in demand from UK-based asset managers who will require access to the EU market after the UK completes its departure.
In Ireland, roughly comparable data shows there are 149 fully authorised alternative investment fund managers (AIFMs), 554 AIFMs operating in Ireland on a cross-border basis, and 83 UCITS Mancos.
Over the course of the past 2 years, Ireland has seen a lot of activity in the ManCo space. For instance, KB Associates, Bridge Consulting, DMS Offshore, GoodBody and Carne have continued to grow as well as FundRock who is a new entrant to the market. The global investment banks in Dublin are also in the process of setting up ManCo’s as they see it as an area of growth.
We predict the volume of Fund Accounting, Transfer Agency, Risk & Compliance and Regulatory roles will continue to increase for the remainder of 2017 and through to 2018. Due to this rise in business in Fund Services, it is essential that companies utilise their back-office support to keep up in this competitive market. Candidates now have more options available to them, let the fight for talent continue!
If you would like more market information and would like to look at your options for a career move, for a confidential discussion please contact me on firstname.lastname@example.org or call 01 661 0444.