IFSC Funds Group Asset Management Task Force Report

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IFSC Funds Group Asset Management Task Force Report

  1. 1. IFSC Funds Group Asset Management Task Force Report May 2002 20
  2. 2. Contents: Page No: Introduction 3 1. Education Issues 6 2. Regulatory Issues 12 3. Marketing 15 4. Fiscal Issues 17 5. Next Steps 18 Conclusion & Main Recommendations 19 Appendix A – Asset-Investment Management Courses in Ireland 21 Appendix B – The Chartered Financial Analyst (CFA®) Program & The Certificate in Investment Management 37 Appendix C – IDA Marketing Plan – Asset Management Sector 40 Appendix D – Asset Management Task Force Membership 49 2
  3. 3. Introduction This report, produced by the Task Force on Asset Management, represents a considered response to an earlier report, Opportunities for a Broader-based Institutional Asset Management Business in Ireland, drafted by members of the IFSC Funds Working Group. In this report, the Task Force explores and puts forward recommendations on the finding in the earlier report that a viable opportunity exists to develop further the asset management business in Ireland. That finding was set within the context that more higher value-added jobs and businesses can be further encouraged and developed by building on the unique range of factors already in place that make Ireland an attractive location for asset management activities. In particular, it was recommended that current potential would be maximised through further reform in the areas of regulation, fiscal issues, marketing and education. Industry Background Asset Management has grown over the last 15-20 years to become a major segment of the Global Financial Services Industry. In 1999, global assets under management were estimated at €33 trillion. The growth of the asset management industry has been based on the need to service the monies of individuals, governments, public agencies, banks, pension funds, insurance companies and charities, to name but a few. Asset Management Companies are the interface between the individual on the one hand, and the financial markets and the companies on the other. The table set out on page 4, taken from an independent research report commissioned by the European Asset Management Association by Professors Julien Ranks and Colin Moyer Risks and Regulation in European Asset Management, details the assets managed on behalf of pension funds, insurance companies and mutual funds in the seven main European countries and the USA in 1999. The total assets detailed in this table – €23.7b - account for over 70% of the estimated total of €33 trillion at that time. 3
  4. 4. Assets under management for eight Countries, 1999 (€ billion) Country Pension Funds Insurance Companies Mutual Funds France 66 830 705 Germany 129 673 515 Ireland 47 32 150 Italy 65 169 412 Netherlands 397 220 83 Spain 32 62 219 UK 1270 1266 345 Total 2006 3252 2429 USA 7225 2403 6388 The Industry in Ireland The latest estimate of assets under management in Ireland is circa €240b. This includes assets managed by members of the Irish Association of Investment Managers of €226b, and an estimated €14b from other participants, licensed by the Central Bank under the Investment Intermediaries Act 1995. For the purpose of this report, it is important to differentiate between • Assets managed in Ireland on behalf of Irish residents (or liabilities) • Assets managed in Ireland for non-domestic clients (or liabilities) • Assets relating to Irish residents (or liabilities) which are managed outside Ireland. The amount of assets managed by Irish based asset managers has been boosted by the arrival of Pioneer (previously named Europlus), which established an operation in Ireland under an IFSC licence in 1998 and also Bank of Ireland Asset Management (BIAM) which, as an indigenous business, has successfully gathered assets from non resident sources for management in Ireland. Assets under management on behalf of Irish residents (or liabilities) are less than €100 billion and increasingly there is a trend for such assets to be managed outside Ireland. Three asset management companies, who are members of the Irish Association of Investment Managers, have recently transferred to their London offices, all or part of their assets relating to Irish residents. In addition, more than 80% of the National Pension Reserve Fund has been allocated to asset managers based outside Ireland. Also, there is an increasing trend whereby multinationals are restructuring the assets 4
  5. 5. of their pension funds in European countries and the retention of these assets by Irish based asset managers is dependent on their ability to compete to a global standard. The asset management industry in Ireland is faced with the threat that this seepage of assets, to be managed elsewhere, will continue – more than €15b of assets relating to Irish residents (or liabilities) are estimated to be managed outside of Ireland at this time. Yet Ireland has proved to be a productive centre of asset management, based on all the arguments produced in the initial report referred to above. And the success in either attracting new corporate entities (e.g. Pioneer) or client monies by established Irish based managers (e.g. BIAM) confirms the appropriateness of Ireland as a centre for this activity. In recent years, there has been increasing development of the management of Alternative Investments e.g. private equity funds and hedge funds. The value of all hedge funds is now estimated to exceed $500 billion. Dublin is seen as an attractive location for the management of such assets and asset management teams recently established in Dublin currently manage in excess of €400 million. The presence of such boutique – style managers of assets provides another opportunity to grow the asset base managed in Ireland. Asset management is a key component of the financial services industry and it creates potential for leverage, by attracting suppliers to the industry e.g. custodians, stockbrokers and investment bankers, as well as senior executives of investee companies. The larger the pool of assets in a location, the greater the frequency of visits by leading corporate executives to that location to meet with investors and potential investors. This in turn has the potential to provide many new introductions to Government/IDA as part of their foreign direct investment marketing programme. In 2001 alone, the CEO and other senior executives representing 282 multinational corporates visited Ireland to meet with existing or potential institutional investors. Against this background, the report has focused on the key catalysts for strengthening the asset management business in Ireland, either by supporting the industry which is in place or encouraging new financial institutions, or existing financial institutions with other activities in Ireland, to build and develop their asset management capability here. 5
  6. 6. Chapter 1: Education Issues 1. Introduction This chapter sets out recommendations on possible initiatives to be taken in the education area, to increase the output of skilled personnel who might work in the industry, and to support the development of asset management. As part of their work, members of the Task Force consulted with informed sources on current educational provision in the area of asset management, and possible strategies for the future. However, it should be emphasised that, in view of the time-scale for its work, the Task Force did not engage in widespread consultation with higher educational institutions. While the Task Force is confident that the recommendations made below are appropriate strategies for the development of the asset management sector, they also recognise the value and the importance of ensuring that any changes introduced into the educational sector should be accompanied by an appropriate process of consultation with the institutions themselves. 2. Background The Task Force notes the following features of the higher education sector insofar as it relates to asset management. • There is a considerable range of educational courses in Irish higher education institutions, which deal in full or in part with the issue of asset management, both at an under-graduate and post-graduate level. (A list of relevant courses is at Appendix A.) • The structure of higher education provides a number of opportunities for the consideration of further strategies to support the asset management sector, as follows: A new designated module with a particular focus on asset management could be created for under-graduate students in their final year. Such a course could be tailored for regulatory recognition. 6
  7. 7. A designated post-graduate course could be created which would focus on education in the area of asset management. This could be provided on both a full and a part-time basis. The part-time basis would allow persons already at work in the industry, or persons who are working in related areas and wish to move into the industry to undertake further and specific education in the area of asset management. A research-oriented function could be created in an existing educational institution. This function would be headed by a figure with an international reputation in the area of asset management, and with proven academic and research capability. This function would develop a reputation as a centre for excellence and would provide the basis for a number of PhD students to carry out investment research. 3. Discussion of Options Each of the issues raised above has both benefits and possible costs. These are discussed below. 3.1 Under-graduate module and the Certificate in Investment Management The under-graduate module offers the possibility of making a large segment of business students aware of the asset management industry and acquire some competence in the basic operation of that industry. The Society of Investment Analysts in Ireland (SIAI) delivers the Certificate in Investment Management (CIM – See Appendix B) for this very purpose. There are 250 CIM holders in Ireland plus 70 registered students. It is delivered by Dublin City University Business School on behalf of the SIAI. The Central Bank, as regulator for the industry, has indicated its willingness to consider some form of ratification for the CIM in the event that the Irish Association of Investment Managers decides to apply such an educational requirement to employees of discretionary portfolio management companies. This could be the first step to regulatory recognition but is likely to begin life as a guide in a voluntary code of practice for employers in the asset management industry pertaining to the engagement of qualified staff. 7
  8. 8. Recommendations The Task Force recognises that the current provision at under-graduate level including the provision of CIM, provides the sort of support for the development of asset management that might be expected. The Task Force considers however that there is an opportunity for an on- going dialogue between the SIAI and educational institutions to assist them in ensuring that programmes and curricula take account of up to date practice in the asset management industry. The Task Force considers that a further objective which should be addressed is provision for better awareness of asset management at under-graduate level. The SIAI has a marketing campaign planned for the CFA charter (see paragraph 3.2) which will involve at least one national press advertisement. A campaign to contact employers and various meetings are also planned. This might also be done in connection with Careers Offices in third level institutions. If this task were to be undertaken by the SIAI as part of a broader strategy to develop the asset management sector in Ireland, it may be appropriate to give consideration to providing some financial support for this role. 3.2 Post-graduate study In the first instance, the Task Force notes that at the post-graduate level there is already in existence a post-graduate course which deals specifically with issues relating to asset management. Expansion of, or additional such courses, would be a means to create extra competition and supply in a discipline that is constantly evolving. However, in addition, in its consideration of strategies for the future, the Task Force noted that the CFA (see Appendix B), an internationally recognised standard for measuring the competence and integrity of financial analysts, has been introduced to Ireland. This has been undertaken by the SIAI. This standard may become the benchmark for qualification within the industry sector. The CFA exam is administered by the Association for Investment Management and Research (AIMR) which is based in the United States. The CFA exam is delivered in 70 countries worldwide and currently has 101,787 students enrolled for examinations. The SIAI is a Chapter of AIMR and is responsible for representing AIMR in Ireland and promoting the CFA qualification. Classes have been established for CFA studies although these are limited 8
  9. 9. to eight days per level at present. The SIAI and AIMR are very anxious to introduce the CFA qualification to established third-level entities in Ireland so as to develop a review programme for CFA candidates and/or to incorporate the CFA body of knowledge into established courses. This is likely to lead to at least one University developing a relationship with the SIAI and AIMR and is the SIAI’s preferred route to delivering the qualification. The CFA will be heavily promoted in Ireland by the SIAI and AIMR in the run up to the new academic year starting October 2002. There are 200 students registered to take CFA examinations in June 2002 and this figure is likely to grow for 2003. Recommendations The combination of current provision of post-graduate education in this area, the introduction of the CFA award, and the likely establishment of a link between the CFA and at least one University indicates that there is already a source of skilled graduates for the industry at present, and that the levels of such output are likely to expand significantly into the future. Accordingly, the Task Force do not think it appropriate that it should recommend further increases to that supply at this time. It will however be essential that the impact of the CFA award, which is still at a very early stage of development in Ireland, be monitored over time, in order to ascertain the full impact of the award on the levels of supply. This should be done in the context of both the current demands for such supply, and the likely increases in activity in the industry which might arise. Accordingly, the Task Force would consider it appropriate that the Clearing House Group might consider further research after a period of 2 years to investigate the impact of the CFA, and the likely supply/demand scenarios for skilled labour in the asset management industry, both at that time, and into the future. Such findings would when viewed against current provision, provide the basis for an allocation of increased places/new courses. (The Task Force notes that this is in general terms the model used by the Expert Group on Future Skills Needs (EGFSN) when it has recommended additional education places be created.) 3.3 Research Function The development of a research function for asset management would fit well with the national strategy to develop knowledge-based industry in Ireland into the future. In recent 9
  10. 10. years, a number of major initiatives have been taken to develop Irish research infrastructure. Of most relevance to the Task Force is the establishment of the Irish Research Council for the Humanities and Social Sciences (IRCHSS). This Council provides financial assistance to researchers working on demonstrably high class research in the broad fields of humanities and the social sciences, which would obviously include business in general and asset management in particular. The development of a dedicated research function would provide specific assistance to the asset management industry. It should ensure a supply of very highly qualified (to Doctorate level) students from Irish institutions who would be available to join the industry in Ireland. It should also create a research basis for the generation of knowledge on investment in higher education which may be capable of commercialisation by the industry. Finally it would also act as a strong and visible selling point for firms considering locating to Ireland, and for IDA Ireland in their campaign to market asset management in Ireland abroad. Against this there would be a need to examine the likely number of students such a function would attract and the likelihood of attracting a world-class professor to Ireland to conduct such research. In other words, could such a proposal achieve critical mass? The Task Force considers that these difficulties can be overcome. In particular, it notes that there are obvious areas for collaboration between asset management and other academic areas – the area of mathematics being one very obvious example. It should also be noted that this function would not be expected to act to supply large numbers of skilled personnel to the industry itself. Instead as set out above, the value of the function would be to generate high quality investment research, to create an international reputation for Ireland in this area, and in doing so, to attract further asset management firms to establish here. The development of the research function has in one sense already commenced – the IRCHSS has already been established and students with a research interest in the area of asset management may seek support from that Council to assist in their studies. However, the Task Force notes that the Council does not have a specific remit to focus on supporting investment research – rather all types of research in the humanities and social sciences may be supported. 10
  11. 11. Recommendations The Task Force recommends the development of a proposal for the approval of the Clearing House Group and ultimately Government, to create a structure for investment research carried out to the highest international standards at a time when such investment research typically carried out by the world’s leading investment banks is under very close scrutiny. The essential elements of such a structure would be • The creation of a formal link between the educational sector and industry to provide a basis for the instigation of such research. One means of providing for such a link, and probably the simplest such means would be for direct liaison between industry representatives and educational institutions. The structure and goals of the desired research programmes, and the associated funding to be provided, could be identified by industry and institutions might be invited to respond as to how they might meet such a structure, within such resources. The operation of the structure would be devolved to an appropriate institution, and a liaison structure between industry and the institution could monitor and evaluate usefulness. • At a more complex level, a Board of concerned persons with particular knowledge of the industry might be established, to set the overall parameters on research that would be supported. This Board would include industry and Government representatives, members of educational institutions, and, with a view to carrying out an overseas marketing campaign, representatives of IDA Ireland. It may also be appropriate, given the strategy underlying this structure, to seek to involve Enterprise Ireland. There may well be an opportunity to build upon the experience of Enterprise Ireland from its mission of the creation of links between industry and education, in the support of new Irish enterprises and in the administration of such support. • In either case, the structure at the level of the education institution should involve the creation and support, on a competitive basis, of a professorial chair, specifically focused on asset management needs, i.e. investment research to the highest international standards. 11
  12. 12. Chapter 2: Regulatory Issues Introduction The work of the Task Force in relation to regulatory matters led to discussions between industry representatives and the Central Bank relating to the regulatory framework for asset management companies. This process has been completed and has led to the following outcomes: 1. Authorisation Process: Discretionary Portfolio Management Companies While the Investment Intermediaries Act, 1995 allows a six month period to consider an application for authorisation as a discretionary portfolio management company, the Central Bank endeavours to process and approve applications within 3 months provided that an application is fully completed, contains all requisite information and no material issues arise. Certain elements of the application process are, however, outside the Bank’s control i.e., reference, police and foreign regulator checks. While well-presented applications should obviate the need for further information on a piecemeal basis, the Bank endeavours to minimise follow up requests. There is a separate unit within Securities & Exchanges Supervision Department1 dedicated to the authorisation process. This unit, over the coming months, it will finalise a review of standard application material (i.e., Application Form and Guidance Note) which will be updated and refined where necessary to assist the application process. 2. Regulatory Process The number of staff dedicated to the direct supervision of discretionary portfolio management companies was recently increased by a quarter. Following the conduct of an on-site inspection, the Central Bank will endeavour to issue details of formal findings to industry participants in a timely manner. Matters requiring urgent attention e.g., serious breaches of the Bank’s Client Money Requirements will be communicated immediately. 1 Securities & Exchanges Supervision Department is responsible inter alia for the supervision of discretionary portfolio management companies. 12
  13. 13. 3. Consultation Process The Central Bank will review the current consultation procedure with industry representatives with a view to agreeing response times for both the Bank and the industry. The Central Bank will provide interpretative guidance to all discretionary portfolio management companies where issues of substance apply across the industry or where an industry precedent has been established in the case of a particular firm. 4. Confidentiality Obligations Under Section 16 of the Central Bank Act, 1989 officers of the Central Bank are prohibited from disclosing any information concerning the business of any person or body which comes to their knowledge by virtue of their office of employment. 5. Minimum Levels of Educational Standards The Central Bank wishes the industry to put forward proposals regarding minimum educational standards that should apply to employees of discretionary portfolio management companies. In this context, the Central Bank had indicated its willingness to consider some form of ratification for the Certificate in Investment Management in the event that the Irish Association of Investment Managers decides to apply such an educational requirement to employees of discretionary portfolio management companies 6. Secondments The Central Bank will discuss the proposal to second Bank staff to individual discretionary portfolio management companies with interested industry participants in the coming months. 7. Establishment of an Industry Participants Group The process of establishing an Industry Participants Group, comprised of representatives of the asset management industry, the Central Bank of Ireland and industry advisors, is well advanced. This Group will provide a means for an exchange of views on industry developments, for informing the Central Bank of such developments and for sharing of information across the industry. It will also enable the Central Bank to seek opinions on key issues having an impact on regulated firms involved in discretionary portfolio management. 13
  14. 14. Terms of Reference of the Industry Participants Group The Industry Participants Group will have the following principal functions: • to engage in collective dialogue in relation to issues affecting the asset management industry; • to identify, if possible, early warning indications of issues having a potential adverse effect on the asset management industry; • to communicate to the Central Bank issues of general concern to asset management firms; • to receive from the Central Bank any general concerns relating to the asset management industry; • to contribute a broad industry and practitioner view on key regulatory issues and on the formulation of regulatory policy by the Central Bank; and • to assist in maintaining the highest professional industry standards conducive to the best interests of clients. Membership of Industry Participants Group Membership of the Industry Participants Group will comprise of representatives from the following: • The Central Bank of Ireland; • The Irish Association of Investment Managers; • The Dublin Funds Industry Association; • The Irish Venture Capital Association; • Unaffiliated asset management entities; and • Professional advisors to the asset management industry. Meetings of the Industry Participants Group The Industry Participants Group will meet on a quarterly basis. The Central Bank will host the meetings and provide secretarial services. An agenda will be agreed in advance of each meeting. Additional meetings will be called where issues which require prompt attention arise. The first meeting of the group was arranged for 30 May 2002. 14
  15. 15. Chapter 3: Marketing The earlier Report Opportunities for a Broader-based Institutional Asset Management Business in Ireland recommended that IDA Ireland assume responsibility for the marketing of Ireland as a centre of excellence for international asset management. The Financial Services Division of IDA has prepared a marketing plan for the year 2002, see Appendix 2. The plan involves marketing Ireland as a centre for international asset management to both new clients and existing companies already in the IFSC. The latter will include banks, insurance companies, funds administrators and corporate entities that have asset management functions within their group. The marketing strategy includes: (i) Producing a new product specific marketing brochure promoting Ireland as a location for international asset management (ii) The development of an Asset Management web page on the IDA, Financial Services web site (iii) Structured marketing programmes with one-on-one client meetings both in Ireland and overseas (iv) Marketing programmes involving seminars in selected markets both alone and where appropriate in conjunction with selected Dublin service providers (e.g. legal, tax, administrators, investment managers and other industry representatives as appropriate) (v) Attending appropriate conferences and seminars aimed specifically at Investment Managers rather than service providers (vi) Building relationships with industry journalists to leverage better and more frequent media coverage of Dublin’s Asset Management initiative. IDA Ireland conducted a promotional tour in the US on the 13th May. Eleven asset management firms were visited including some with funds administration operations at the IFSC. 15
  16. 16. The broad summary of the findings were as follows: • Dublin is regarded positively but mainly as a legal domicile and processing location. • There is limited potential for Dublin to develop the asset management activity. • Managers look for the following conditions in selecting a location: – Easy access to clients and investment relationships, – Recognised clustering as in London, – An established talent pool, and – Good air travel availability. Dublin will find it very hard to compete with London in these areas. Emphasis was also placed on the need for top class business schools with PhD level courses. The Task Force will need to evaluate the findings of this promotional tour carefully to establish how it should attempt to deal with these issues. Pan European Pension Product In a separate initiative IDA has launched a pan-European pension product aimed at exploiting the opportunities presented by the continuing failure by the EU to introduce a Pensions Directive. This new initiative is the result of a study carried out by the Mercer Group for IDA, which is designed to exploit Ireland’s expertise in the extensive and fast growing international life assurance retail market in continental Europe. The concept is based on the creation of a group life assurance company in Ireland by multinational companies (MNC’s) currently operating multiple pensions plans in Europe. The group company would provide pension products for the mobile employees of the MNC from an Irish regulated entity. The products provided would be modified versions of those products that have been so successfully developed in Ireland for the personal savings market in countries such as Italy and which benefit from EU passportability for life assurance products. This initiative could provide considerable opportunities for Ireland’s extensive network of third party service providers in Life Assurance and Mutual Funds as well as the Asset Management Sector. 16
  17. 17. Chapter 4: Fiscal Issues The corporate tax rate of 12.5% (from 1 January 2003) is undoubtedly an incentive for companies to establish new businesses in Ireland. This is likely to be one of the key factors in promoting Ireland as a centre for asset management business. There is, however, an issue which has been identified in relation to a potential liability to Irish tax of non-resident clients of an asset manager based in Ireland. A submission was made to the Revenue Commissioners in October 2001 on the matter of whether an Irish based asset manager contracting on an independent basis could, by virtue of that contract, be treated as an Irish branch or agency of a non-resident client and thus create an Irish tax exposure for that client. The Revenue Commissioners responded stating that they were unable to give a confirmation that such activities would not constitute a branch or agency and thus bring the non-resident client within the charge to Irish tax. Further discussions have taken place over the last six months between the Department of Finance, the Revenue Commissioners and tax advisers. Draft legislation has been prepared by the Department of Finance/Revenue Commissioners and is under discussion with the tax advisers' group. The expectation is that the content of the legislative provision will be agreed in principle by mid- to end-June. Whilst the proposed amendment cannot be enacted until the 2003 Finance Act, it is hoped that agreement in principle on the overall content of the proposed provisions will be sufficient to enable tax advisers to advise their clients with reasonable certainty as to the position for the future. It is also intended that an interim arrangement can be agreed with the Department of Finance. 17
  18. 18. Chapter 5: Next Steps Monitoring Progress The foregoing sections of this report have focused on the progress which has been, and should continue to be made, in strengthening the framework for asset management companies to participate in Ireland. There is now a need to consider how best to monitor ongoing progress, in the same way that developments in other sections of the financial services industry were monitored since the establishment of the IFSC in 1987. The sub-group structure has enabled direct focus in three areas – banking, insurance and investment funds. The question arises from this report as to how best to monitor progress on issues relating to asset management. The Funds Group has provided the necessary focus on the framework required for legal structures and administration of, and accounting for, investment funds. The management of the assets of such funds is a further dimension and, indeed, such investment funds are only part of the asset management industry. Many trillions of assets are managed on a segregated basis without investment fund structures. Similar to the restructuring of the IFSC Committee in 1991, additional terms of reference within the Clearing House structure are now required for asset management. It is apparent from this report that the asset management industry is more closely aligned with the Funds Group but there are, nevertheless, different disciplines and issues to consider – regulation of the asset management industry is within a different unit in the Central Bank of Ireland; it requires separate consideration of educational issues and participants operating in Ireland are represented by a separate association – The Irish Association of Investment Managers. By contrast, the agenda of the Funds Group is focused largely on legal and accounting issues related to investment fund structures and the facilitating of the fund administration industry. It is proposed, therefore, that an asset management group be established, reporting to the Clearing House, with appropriate representation from the recognised interested parties from the public and private sector, to ensure that the agenda is followed as successfully as it has been with the other sub-groups. 18
  19. 19. Conclusions and Recommendations The Task Force proposes the following conclusions and recommendations for the consideration of the Clearing House Group. 1. Education Issues: Under-graduate Education: • The Task Force recommends that the SIAI engage in dialogue with the educational institutions to assist them in ensuring that programmes and curricula take account of up to date practice in the asset management industry. • The Task Force recommends that it would be appropriate to provide further assistance to the SIAI to broaden their planned marketing campaign so as to increase the awareness and attractiveness of asset management amongst third level students. Post-graduate Education The Task Force recommends that the Clearing House Group might consider further research after a period of 2 years to investigate the impact of the CFA and the likely supply/demand scenarios for skilled labour in the asset management industry, both at that time and into the future. Research Function The Task Force recommends the development of a proposal to create a structure for investment research to involve the establishment of a professorial chair specifically focused on asset management needs i.e. investment research to the highest international standard. 2. Regulatory Issues The Task Force noted the initiatives taken by the Central Bank in strengthening the resources dedicated to the authorisation process for asset management companies and the arrangements put in place regarding the establishment of the Industry Participants Group. The Task Force considered that the Industry Participants Group was an appropriate medium for exchanging views on industry developments and key issues having an impact on asset management companies. 19
  20. 20. 3. Marketing: IDA Ireland conducted a promotional tour in the US in early May. The findings of this promotional tour confirm the areas of disadvantage, which we currently have to deal with in developing the asset management sector. The Task Force will now need to consider how best to deal with these issues. 4. Fiscal Issues The Department of Finance, Revenue Commissioners and the tax advisers will continue discussions on the issue of a potential liability to Irish tax of non-resident clients of an asset manager based in Ireland, with a view to having the matter agreed well in advance of the 2003 Finance Bill. 20
  21. 21. APPENDIX A HEA Institution with BUSINESS Courses which have ASSET/INVESTMENT Management Content 2000 - 2001 Institution/Course Type of Course Course Content CAO 1st Year Credits per Module Points Enrolments DCU Bachelor of Business Undergraduate Year 2: Core module on Financial Management (AC 201). 435 188 5 out of possible 35 Studies This introduces students to the nature and role of financial management in an organisation and provides students with the theoretical framework, the practical understanding and the analytical tools necessary for planning and controlling investment and its financing in a business context. Year 3: Core module on Fund Accounting: This module examines the role of the accounting agent for a mutual fund. 5 out of possible 35 Students will gain an understanding of the types of transaction handled by a mature fund accountant and how they affect the daily determination of a funds Net Asset Value. Students will see the similarities and differences between equity, bond and money market investments and will understand the component of the daily NAV and the daily change in the NAV. Also in Year 3: Optional module on Risk Management which familiarises students with the techniques of managing financial risk in a modern business environment. 5 out of possible 30 21
  22. 22. HEA Institution with BUSINESS Courses which have ASSET/INVESTMENT Management Content 2000 - 2001 Institution/Course Type of Course Course Content CAO 1st Year Credits per Module Points Enrolments BA in Accounting & Undergraduate This programme is designed to produce quality graduates 435 129 Finance professionally equipped to pursue careers in accounting, banking and financial management. Year 3: Core module on Corporate Finance and Investments 5 out of possible 25 which exposes students to the study of the principles of corporate financial management and investments through appreciation of the theoretical framework and analytical techniques of the discipline. Also in Year 3: Optional module on Risk Management which 5 out of possible 30 aims to familiarise students with the techniques of managing financial risk in the modern business environment. BA in European Undergraduate Unique business programme with a difference which Business Affords students the opportunity to study for one year in one of the programme partner institutions in either France, Germany, Spain or the USA. Year 3: Core module Corporate Financial Management which introduces students to the nature and role of financial 5 out of possible 30 management in an organisation and provides them with the theoretical framework, the practical understanding and the analytical tools necessary for planning and controlling investment and its financing in a business context. Year 4: Optional module Risk Management as already Described above. 5 out of possible 30 22
  23. 23. HEA Institution with BUSINESS Courses which have ASSET/INVESTMENT Management Content 2000 - 2001 Institution/Course Type of Course Course Content CAO 1st Year Credits per Module Points Enrolments BA in Intl. Business & Undergraduate Year 4: covers Business Subjects and includes Finance 5 out of possible 35 Languages Specialisms such as, Financial Markets, International Finance, Financial Statement Analysis and Risk Management (previously described). Master of Bus. Postgraduate One-year full-time programme designed to meet the needs of Studies in Accounting honours graduates who have taken major accounting specialisms in their undergraduate studies. 5 out of possible 35 Includes Core modules – Corporate & Investment Finance (AC509) already described above and Financial Management & Strategy (AC514) which applies theoretical and analytical concepts to the investment management process with a view to introducing students to the practice aspects of institutional 2.5 out of possible portfolio management 40 23
  24. 24. HEA Institution with BUSINESS Courses which have ASSET/INVESTMENT Management Content 2000 - 2001 Institution/Course Type of Course Course Content CAO 1st Year Credits per Module Points Enrolments Exec. Master of This two-year part-time Management qualification includes: Business Year 1, Semester 2 Core module on Financial Management Administration (EF.517) which includes exposing students to the study of advanced asset management, analytical techniques and gives a thorough appreciation of the theoretical framework of the discipline. Year 2. Semester 1,Optional module on Financial Markets (EP.514) to further the student’s understanding of financial markets and investments and of analytical techniques which aid investment decision-making. M.Sc. in Investment Postgraduate This is a two-year part-time programme aids the development 33 and Treasury of outstanding individuals among the existing staff of financial services companies and also provides accelerated career development opportunities for top graduates from full-time study to careers in investment and treasury management. Year 1 Semester 1: is made up of Core modules in: Investment Economics and Econometrics which help develop an understanding of economic concepts and the 5 out of possible 15 national/international environment within which financial services activities are carried out and their role in investment decision-making 24
  25. 25. HEA Institution with BUSINESS Courses which have ASSET/INVESTMENT Management Content 2000 - 2001 Institution/Course Type of Course Course Content CAO 1st Year Credits per Module Points Enrolments Corporate Finance; the objective of this module is to equip the corporate financial manager with the tools available to 5 out of possible 15 create value from the firm’s financing and investment activities. Regulatory Framework of Investments: develops the student’s knowledge of the legal and regulatory framework of the 5 out of possible 15 securities industry and of continuing developments in the securities industry and their impact on that framework. Year 1: Semester 2 includes Securities and Investments which covers the types and characteristics of the major classes of investment securities in use in domestic and international 5 out of possible 30 financial markets. This course is taught from the perspective of the investment manager. Financial Analysis covers applications and limitations of financial statement analysis and helps develop students’ ability to rigorously appraise and evaluate the information available in 5 out of possible 30 financial statements and annual reports. Theory of Finance exposes students to the major theoretical concepts of modern finance. It focuses initially on financial decision-making under uncertainty and then moves on to more selected topics. 5 out of possible 30 Year 2: Semester 1 covers Portfolio Management Theory which applies theoretical and analytical concepts to the investment management process. Corporate Treasury Management which concentrates on 25
  26. 26. HEA Institution with BUSINESS Courses which have ASSET/INVESTMENT Management Content 2000 - 2001 Institution/Course Type of Course Course Content CAO 1st Year Credits per Module Points Enrolments investment, funding and the management of financial risk in an 5 out of possible 15 international corporate setting. Fixed Income Securities helps the student to develop a deeper 5 out of possible 15 understanding of the characteristics of fixed income securities and introduces the student to the practice of interest rate risk management. 5 out of possible 15 Year 2: Semester 2 includes Fund Management which is designed as a complement to the course in portfolio theory with a view to introducing students to the practical aspects of institutional portfolio management. 5 out of possible 30 Treasury Management in Financial Institutions: this course sets out to enhance students’ understanding of international financial markets and the range of instruments and strategies available to manage financial risk. A key feature is the 5 out of possible 30 identification, qualification and management of risk. Case Study: Students are also asked to undertake a systematic investment appraisal of a listed company within a macro 5 out of possible 30 economic and sectoral framework. Certificate in Entry Level The Society of Investment Analysts in Ireland (SIAI) is the Investment (LC) professional body for members of the Irish investment Management community applying formal analytical skills to research, portfolio management and related activities. The SIAI Certificate in Investment Management (CIM) consists of four separate subjects: 26
  27. 27. HEA Institution with BUSINESS Courses which have ASSET/INVESTMENT Management Content 2000 - 2001 Institution/Course Type of Course Course Content CAO 1st Year Credits per Module Points Enrolments *Accounting and Taxation *Economics and Statistics *Securities Markets and Portfolio Management *Investment Industry – Regulation and Structure Tuition is part-time over one-year and lecturers for the Certificate are drawn from the academic staff of the university and from practitioners in the financial services industry. Graduate Certificate Postgraduate This part-time programme is designed to meet the needs of in Corporate Irish business for well-educated, professionally qualified Treasury corporate treasury managers. The Graduate Certificate will offer the opportunity for those working in treasury to gain the specialist knowledge required to function in or serve the needs of the modern corporation. Objectives of the programme are to provide graduates with: *broad-based, up-to-date understanding of the wider issues involved in corporate financial management. *theoretical and analytical skills and abilities required to anticipate and manage the funding requirements of an organisation. *an appreciation of the nature and importance of financial risk and an in-depth knowledge of risk management tools. *an awareness of international financial markets and their impact on the corporate treasury environment. *a knowledge of contemporary developments in both domestic 27
  28. 28. HEA Institution with BUSINESS Courses which have ASSET/INVESTMENT Management Content 2000 - 2001 Institution/Course Type of Course Course Content CAO 1st Year Credits per Module Points Enrolments and international corporate treasury management. *the skills and tools required to analyse problems and to make decisions based on available information/ *the intellectual framework within which existing treasury experience can be developed. UCD Certificate in The Certificate in Financial Services is offered by the Faculty Financial Services of Commerce in co-operation with the Institute of Bankers of Ireland. This Certificate is awarded on successful completion of 8 subjects – a minimum of 3 from each of two groups as follows: Business Studies Group Accounting Financial Reporting & Managerial Accounting Economics Managing People Marketing Financial Services Group Law & Practice of Banking Financing International Trade Lending & Securities Investment Planning (ROI & NI) Legal & Regulatory Aspects of Mutual Funds 28
  29. 29. HEA Institution with BUSINESS Courses which have ASSET/INVESTMENT Management Content 2000 - 2001 Institution/Course Type of Course Course Content CAO 1st Year Credits per Module Points Enrolments Custody & Registration Fund Accounting & Valuation Mortgage Advice & Practice (ROI & NI) Instalment Credit & Leasing Diploma in Financial As with the Cert. in Financial Services referred to above, this Services Diploma is offered in co-operation with the Institute of Bankers of Ireland. Students must have passed all Certificate courses before proceeding to Diploma level. The Diploma is composed of a fixed number of courses as follows: Finance Treasury and Risk Management Investment Lending Assessment and Management Law Bachelor of Financial Undergraduate. This three-level programme includes Core modules such as: Services Applicants must Lending & Securities be in full-time Financing International Trade employment in Investment Planning the financial Fund Accounting & Regulation sector. Finance Treasury & Risk Management Investment 29
  30. 30. HEA Institution with BUSINESS Courses which have ASSET/INVESTMENT Management Content 2000 - 2001 Institution/Course Type of Course Course Content CAO 1st Year Credits per Module Points Enrolments Management of Financial Institutions Bachelor of Business Undergraduate This four-year programme includes in Year 4 an Optional & Legal Studies module on Aspects of Financial Theory which introduces students to the main emphases of modern financial theory with particular reference to capital market consumption and investment decisions; utility theory; portfolio optimisation, equilibrium financial assets, pricing models and the pricing of contingent claims. Other Optional modules in Year 4 are: Investment and Portfolio Management which gives a broad appreciation of security analysis and portfolio management and covers topics such as risk management for various asset categories. Treasury Management which is designed to provide students with a practical understanding of treasury management and includes topics such as, interest rate risk analysis, foreign exchange risk analysis; securities investment and derivative products analysis. B.Sc. in Economics & Undergraduate This three-year programme covers in Year 3 topics such as: 460 31 Finance Financial Theory 5 out of possible 60 Investments 5 out of possible 60 Financial Institution Management 5 out of possible 60 Treasury Management 5 out of possible 60 Financial & International Financial Management 5 out of possible 60 30
  31. 31. HEA Institution with BUSINESS Courses which have ASSET/INVESTMENT Management Content 2000 - 2001 Institution/Course Type of Course Course Content CAO 1st Year Credits per Module Points Enrolments Bachelor of Actuarial Undergraduate This is a three-year programme which includes in: 550 0 and Financial Studies Year 2: Financial Accounting 11 out of possible Year 3: 60 Aspects of Financial Theory Investment & Portfolio Management or 6 out of possible 60 Financial Management 6 out of possible 60 6 out of possible 60 B.Commerce in Undergraduate This is a three year Commerce programme specialising in Year 445 0 Banking & Finance 3 which includes electives on Accounting Banking and Finance Business Management and International Business MBS Quantitative Postgraduate This is an advanced, specialist international business degree 12 Finance programme with a strong research focus which can be taken (Quantitative Finance over one (full-time) or two (part-time) yrs. The programme mode of MBS involves both structured course work and independent Finance) research. Core modules include: Corporate Finance Fixed Income Securities Derivatives Financial Theory Elective modules include: International Finance 31
  32. 32. HEA Institution with BUSINESS Courses which have ASSET/INVESTMENT Management Content 2000 - 2001 Institution/Course Type of Course Course Content CAO 1st Year Credits per Module Points Enrolments Seminar in Financial Economics Portfolio Management MBS Finance – Postgraduate This particular strand of the MBS programme focuses on 39 Financial corporate finance, strategic and governance issues and targets Services (Financial students from a business or related background. Services mode of MBS The course is designed to meet the demands of a career in Finance) corporate finance, investment banking, fund management and related financial services. Core modules include: Corporate Finance Strategic Finance Corporate Governance Financial Asset Valuation Elective modules include: International Finance Monetary Economics Financial Modelling NUIM BA. in Finance Undergraduate Three-year programme which covers in Year 3 Elective 365 111 modules such as: Corporate Finance 1 & 2 which helps students understand the principles of the Markowitz portfolio selection procedure and 32
  33. 33. HEA Institution with BUSINESS Courses which have ASSET/INVESTMENT Management Content 2000 - 2001 Institution/Course Type of Course Course Content CAO 1st Year Credits per Module Points Enrolments asset pricing models (CAPM and APT asset pricing models are covered in detail in Part 2). This course should enable students to manage investment risk, detect mispriced securities and measure the performance of investment managers Derivatives 1 & 2 which cover stock options, currency options, futures options, pricing of options, the use of options in risk management and an introduction to exotic options. International Finance 1 & 2 covering international financial institutions, the theory of central bank intervention in the foreign exchange market etc. Higher Diploma in Postgraduate This is a one-year full-time course covering modules on: 4 Arts (Finance) Monetary Economics Financial Accounting 1 & 2 Corporate Finance 1 & 2 Derivatives 1 & 2 International Finance 1 & 2 33
  34. 34. HEA Institution with BUSINESS Courses which have ASSET/INVESTMENT Management Content 2000 - 2001 Institution/Course Type of Course Course Content CAO 1st Year Credits per Module Points Enrolments NUIC B.Sc. in Finance Undergraduate A Three year programme which specialises from Year 2 445 63 including topics such as: Business Finance Financial Reporting Microeconomics for Business And in Year 3: Financial Reporting Applications in Corporate Finance and Accounting Microeconomics for Business Business Econometrics and Forecasting NUIG Bachelor of Undergraduate This is a three-year programme with a fourth year abroad to 420 341 Commerce qualify for the B.Comm (International). Specialisation takes place in second and third years when students can take Optional modules in topics such as: Financial Accounting 1 & 2 Comparative Economic Thought 2 units out of 20 Buyer Behaviour Analysis 2 units out of 20 Advanced Microeconomics 2 units out of 20 Management Decision Sys.1 2 units out of 20 2 units out of 20 34
  35. 35. HEA Institution with BUSINESS Courses which have ASSET/INVESTMENT Management Content 2000 - 2001 Institution/Course Type of Course Course Content CAO 1st Year Credits per Module Points Enrolments Master of Economic Postgraduate This honours Masters includes Optional modules such as: Science International Trade & Finance Microeconomics Macroeconomics Econometrics Monetary and Financial Economics Master of Business Postgraduate A full or part-time Masters for honours graduates which 4 options out of Studies includes Optional modules such as: possible 17. Monetary Economics International Economics Industrial Economics Organisational Development TCD Bachelor of Business Undergraduate This programme covers Optional modules such as: Studies Economics of Securities Markets And/or a Language Monetary thought and policy Economic and legal aspects of competition policy Strategic Management Financial reporting and analysis 35
  36. 36. HEA Institution with BUSINESS Courses which have ASSET/INVESTMENT Management Content 2000 - 2001 Institution/Course Type of Course Course Content CAO 1st Year Credits per Module Points Enrolments B.Sc.Business & IT Undergraduate This is a multi-faculty programme, which is concerned with the application of management and information technology within business, includes Core modules in: Information Technology Systems and Software Management Organisational Behaviour 36
  37. 37. APPENDIX B The Chartered Financial Analyst (CFA®) Program is a globally recognized standard for measuring the competence and integrity of financial analysts. Three levels of examination measure a candidate's ability to apply the fundamental knowledge of investment principles at a professional level. The CFA exam is administered annually in more than 70 nations worldwide. To be awarded the CFA charter, a candidate must: 1) Sequentially pass the Level I, Level II, and Level III examinations; and 2) Have at least three years of acceptable professional experience working in the investment decision- making process; and 3) Fulfil AIMR membership requirements and apply concurrently for membership in AIMR and in an AIMR Member Society or Chapter. Once a candidate becomes a CFA charterholder, he or she must comply with AIMR's conditions, requirements, policies, and procedures of a CFA charterholder and AIMR member, including those set forth in the AIMR Articles of Incorporation, Bylaws, Code of Ethics, Standards of Professional Conduct, Rules of Procedure for Proceedings Related to Professional Conduct, and other conditions, requirements, policies, and procedures that may be established and amended from time to time, including the submission of an annual Professional Conduct Statement and the payment of AIMR membership dues. Failure to comply with AIMR's conditions, requirements, policies, and procedures can result in disciplinary sanctions, including suspension or revocation of the right to use the CFA designation. The CFA Program is postgraduate. The readings assigned in the study program and the questions on the CFA exams are geared for individuals who are prepared to deal with "masters" level course work. Although many applicants enter the program with a business school education, others have a liberal arts background. No specific prerequisite courses of study are prescribed for enrolling in the CFA Program, but applicants should be aware that assigned readings in many topic areas are beyond a basic, introductory level. The three examinations required for eligibility for the CFA charter are given once each year at locations around the world. Candidates must complete the three exams sequentially and, because all three examinations are given simultaneously, may sit for only one examination each year. Candidates who fail an examination are encouraged to repeat that level the next year. The Level I examination is composed of multiple-choice questions. Levels II and III consist of essays and item sets. The CFA curriculum is solidly 37
  38. 38. grounded in the practice of the investment profession. Periodically (most recently in 1995), AIMR surveys CFA charterholders around the world to determine those elements of the body of investment knowledge that are important to them in their practice. The survey results help establish the Candidate Body of Knowledge (CBOK) and determine how much emphasis each of the major topic areas should receive on the CFA examinations. The CBOK is organized into four major areas: ethical and professional standards, tools and inputs for investment valuation and management (investment tools), asset valuation, and portfolio management. The Level I study program emphasizes tools and inputs and includes an introduction to asset valuation and portfolio management techniques. The Level II study program emphasizes asset valuation and includes applications of the tools and inputs (including economics, accounting, and quantitative techniques) in asset valuation. The Level III study program emphasizes portfolio management and includes strategies for applying the tools and inputs in managing equity and fixed-income securities. The second important feature of the CBOK is that ethical and professional standards are an integral part of all three functional areas of investment management and, hence, are covered at all three levels of the curriculum The Certificate in Investment Management (CIM) This one-year qualification demonstrates that holders have acquired basic familiarity with, and comprehension of, the broad range of topics they may require in investment related positions in the financial services industry. The CIM consists of four separate subjects, each examined in a separate paper of one and a half hours’ duration: Accounting and Taxation (AT) Economics and Statistics (ES) Securities, Markets and Portfolio Management (SP) 38
  39. 39. Investment Industry- Regulation and Structure (IR) The CIM does not require candidates to have any particular work experience. Candidates for the examination are advised, however, that those studying for or taking courses leading to the CIM who are engaged in activities in an investment management, stockbroking or treasury environment will generally find that the course contains much material which will be familiar to them. Dublin City University Business School works in partnership with the SIAI to provide the programme leading to the CIM qualification. This programme forms part of the DCUBS Centre for Executive Education programme. Lecturers will be drawn from the academic staff of the University and from practitioners in the financial services industry. DCUBS programmes are committed to excellence in education and have elicited very positive responses and recognition from both employers and professional bodies. All students registered on programmes in the school have full access to the University’s computing, library and other facilities. 39
  40. 40. APPENDIX C THE INTERNATIONAL FINANCIAL SERVICES INDUSTRY IN IRELAND ASSET MANAGEMENT SECTOR IDA MARKETING PLAN 2002 40
  41. 41. TABLE OF CONTENTS Page MISSION STATEMENT 3 PRODUCTS 3 TARGET MARKETS 7 METHODS 7 BUDGETS 8 MEASUREMENT 8 41
  42. 42. MARKETING PLAN ASSET MANAGEMENT SECTOR 1. MISSION STATEMENT It is IDA’s objective to grow the quality of investment and employment in Ireland’s Asset Management Sector: 1. by learning from and building on the success of the existing Investment Management companies in Ireland 2. to broaden and deepen the range of activities carried out in Dublin’s International Financial Services Centre by leveraging off the success achieved by the International Mutual Funds Administration Sector Given its experience, its overseas network and its international brand recognition, IDA is well positioned to market Ireland internationally as a global centre of excellence for international Asset Management. 2. PRODUCTS The Objective: To establish Ireland as the most competitive, professional, progressive and fully integrated Asset Management Centre in Europe. Dublin’s success as a centre for international funds management to date has been due to: • the range of funds products available to companies allowing access across the full investor spectrum 42
  43. 43. • the wide variety of available legal forms ranging from UCITS, non-UCITS, Investment Companies, Unit Trusts to Investment Limited Partnerships • an innovative and progressive approach to new product development that has enabled Ireland to become a leading location for Hedge Funds and Exchange Traded Funds in Europe • Ireland’s well respected regulatory environment • an attractive Corporate Taxation regime. Competitive operating costs, the depth and quality of the professional services available, the positive attitude of the regulatory process and the IDA itself have also contributed to Dublin’s success to date. Based on the success of the mutual funds sector, new related product opportunities have been identified in which Ireland could achieve a significant market position. 43
  44. 44. 1. Investment Management Dublin has relatively few “front office” funds or asset management operations. Although there are some 76 companies authorised by the Central Bank under the Investment Intermediaries Act 1995, to carry out discretionary investment management activities, the 11 largest handle the bulk of the €200bn assets under management in Ireland. Furthermore, with a few exceptions, these are mainly Irish companies the majority of which are focussed on providing services to Irish institutional investors. Although the sector has never been specifically targeted some foreign Investment Management companies have established international asset management operations in Dublin, for example Pioneer Investment Management Company from Italy, Coronation Group, Old Mutual and Gensec from South Africa. In addition some of the Irish asset management companies have successfully developed overseas business which is managed in Dublin. Which suggests there is an opportunity to build on this success and to actively promote Dublin as a centre for asset management. Given the performance and reputation driven nature of the industry and the relative scarcity of the skills required, it is expected that many of these companies will need to migrate some of their key workers with them. However, steps will be taken to ensure that the industry’s future skills needs will be addressed by establishing appropriate educational/training programmes at both graduate and post-graduate levels in Ireland. 44
  45. 45. 2. Pension Funds Meeting the need of multinational companies for a pan-European, transportable pension scheme for their mobile employees is widely regarded by the financial services industry as a considerable business opportunity. However, despite the needs and efforts of all concerned a completely satisfactory solution has yet to be found and the introduction of an EU Pension Directive looks unlikely in the short term. IDA has been working with industry players, service providers and consultants to find a solution that would give Ireland some competitive advantage over other jurisdictions. Following a study by a firm of consultants a solution has been proposed involving the use of a long-term savings, life assurance product for retirement savings purposes. This requires the establishment of a separate Irish registered entity (IRCO) by a multinational company (MNC), which could be a captive life assurance company, a management company or a Trust. The concept is that the IRCO would provide fixed term, flexible contribution, savings products in the form of life assurance contracts, to mobile employees of MNCs. The IRCO would be responsible for collecting the premiums and administering the schemes. The administration function could be carried out internally or outsourced to a third party service provider based in Ireland. Life products would be purchased directly from existing IFSC life companies that currently provide retail insurance products within the EU Employees would contract directly with the IRCO, so that, in the event of them moving from one country to another with the existing employer or indeed to another employer, the benefits would transfer with them. This structure can be established with relative ease and in the absence of an EU Pensions Directive, could provide an interim solution to the pan-European pension problem. 45
  46. 46. 3. Why Dublin for Asset Management? Europe is becoming a much more attractive investment market. • Europeans have traditionally been relatively high but “inefficient” savers. • There is an increasing trend in Europe towards an equity based investment culture dictated mainly by low interest rates and the looming pension-funding crisis. • The highly competitive environment in the fund management industry in Europe is forcing cost cutting and restructuring through acquisition/strategic alliance. • The European investment environment promises a good future for mutual funds, which is where US expertise lies. • US firms are looking increasingly to globally diversify their customer base and Europe offers an avenue for high growth rates. The widely anticipated introduction of the borderless Euro zone, increased wealth, demographic changes driving growth in the pensions market have already created a new investment culture in Europe which present significant market opportunities. As with the US funds market, products across the Euro zone will become more homogenous - the differentiating factors will essentially be based on service and security issues. Every aspect of the savings and investment business will be affected including administration, marketing and distribution, product design and the investment management function itself. Ireland’s reputation as a well-regulated, high quality and flexible service centre for mutual funds, life assurance and pensions together with its attractive corporate tax regime should provide leverage to access new business opportunities for Dublin based Asset Managers. 46
  47. 47. 3. TARGET MARKETS IDA will continue to place strong emphasis on those markets that have a strong financial services base and those have consistently delivered funds related projects to date. In the year to June 30, 2001 US promoters accounted for 39% of the Mutual Funds domiciled in Ireland, Europe accounted for almost 50% and the remainder came mainly from Japan and South Africa. Within Europe the primary source of fund sponsors was the UK, Germany, Italy and France. It is proposed therefore to concentrate marketing efforts for the coming year to the USA, UK, Germany, Italy and France. More specifically it is intended to focus our marketing programme on New York, Boston, London, Frankfurt, Milan and Paris. Depending on opportunities that may arise we will also consider other locations on a case-by-case basis. 4. METHODS The methods to be adopted to market Ireland as a centre for international asset management will encompass marketing to both new clients and existing companies already in the IFSC. The latter will include banks, insurance companies, funds administrators and corporate entities that have asset management functions within their group. The principal marketing methodology will include: (vii) Producing a new colour marketing brochure specifically promoting Ireland as a location for international asset management (viii) Structured marketing programmes with one-on-one client meetings both in Ireland and overseas (ix) Marketing programmes involving seminars in selected markets both alone and where appropriate in conjunction with selected Dublin service providers (e.g. legal, tax, administrators, investment managers and other industry representatives as appropriate) (x) Attending appropriate conferences and seminars aimed specifically at Investment Managers rather than service providers (iv) Build relationships with industry journalists to leverage better and more frequent media coverage of Dublin’s new initiative. 47
  48. 48. 5. BUDGETS The budgeted cost of carrying out the 2002 marketing programme will be borne by IDA. This includes identifiable direct marketing costs such as promotional literature, overseas marketing trips, attending seminars and conferences and servicing incoming overseas visits to Ireland. 6. MEASUREMENT The overall aim must be to adopt a system which recognises and records growth in activity, including direct employment. The system must be easy to administer and comprehend and convey a clear view on achievement. From an internal IDA perspective, a fundamental issue is to arrive at a measurement system whereby the efforts of IDA’s overseas marketing executives in assisting to market the financial services industry in Ireland is recognised and rewarded - otherwise their focus will be directed toward other areas. The Central Bank has agreed to advise IDA on a regular basis of any new entities authorised by the Bank under The Investment Intermediaries Act 1995. Central Bank of Ireland 29 May 2002 48
  49. 49. APPENDIX D Asset Management Task Force - Members Gavin Caldwell, KBC Asset Management (Chair) Fergal Costello, Higher Education Authority Willie Cotter, Bank of Ireland Asset Management Sandra Daly, Central Bank Steven Fadian, Dept. of Finance Ann Fitzgerald, Irish Association of Investment Managers Sean Langdon, IDA Mark Merrigan, Society of Investment Analysts Pat Neary, Central Bank Gary Palmer, Dublin Funds Industry Association George Shaw, Dept. of the Taoiseach Eithne Tiernan, Dept. of the Taoiseach (Secretary) 49

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