ILP a preferred vehicle for private strategies
Private assets have experienced significant growth in the last few years and Ireland is now set up to further benefit from this expansion through the Investment Limited Partnerships (Amendment) Act 2020 (ILP Act) which was enacted into law in December 2020.
“Private equity funds have performed well and are increasingly popular with investors and asset managers alike,” observes Vanora Madigan, executive director, DMS Governance, “These funds are established in Ireland as Qualifying Investor Alternative Investment Funds (QIAIFs) which have few investment restrictions and allow PE managers to raise capital within the EU marketplace with relative ease by availing of the marketing passport.”
Looking ahead, DMS Governance expects the enhanced ILP structure to be the preferred vehicle in Ireland for private asset investment strategies including private equity, private debt, real estate, credit, venture capital, infrastructure, and energy. This, coupled with the 24-hour Central Bank QIAIF authorisation process, augments Ireland’s attractiveness for these types of funds.
The ILP reform will bring the legislation in line with similar partnership structures in other jurisdictions augmenting Ireland as an attractive domicile of choice for private equity and venture capital funds. Furthermore, the act will facilitate private equity (PE) managers in establishing parallel Irish structures for distribution to European investors through the use of the Alternative Investment Fund Managers Directive (AIFMD) marketing passport.
“The introduction of the ILP legislative changes has been long awaited by the industry and we anticipate new opportunities for private assets from our discussions with private equity managers,” highlights Madigan. “This will have a positive effect on our business with Ireland positioned to offer a viable partnership structure, similar to that of Luxembourg. The enhancements to the ILP Act highlight Ireland’s commitment to the investment funds industry, improving Ireland’s attractiveness as a domicile for private equity funds and bringing certainty in securing Ireland’s position as a leading fund domicile and competitive location for setting up private equity funds.
“With the revised ILP and updates to the AIF Rulebook, we are able to advise our clients of the benefits of the ILP, positioning Ireland as a world leading funds centre when structuring new private equity, infrastructure and green energy projects. The modernisation of the ILP which adopts the best of breed features from other fund domiciles allows for our private asset manager clients to consider setting up an ILP as an umbrella structure with multiple sub funds allowing for structuring flexibility.”
Discussing the broader prospects of Ireland as a financial hub, Madigan notes: “As a growing financial service hub, we expect to see the trend continue of new asset managers setting up in Ireland or the expansion of those already with an Irish presence. As a group with continued commitment from our clients for our services including appointment as an independent third-party management company for alternative investment funds and UCITS funds, and with growing interest from investors, we are expanding our European headcount and will be adding to our 150 employees based in our two Irish offices, Dublin and Cashel in Co Tipperary.”
Vanora Madigan, Executive Director, DMS Governance
As Executive Director within the relationship management team of DMS Investment Management Services (Europe) Limited, Vanora provides corporate governance advice and leads with the design and implementation of internal controls and operating procedures associated with regulated investment funds. Vanora has extensive experience in UCITS, AIFMD, and alternative investment vehicles and brings with her a background in legal investment and client relationship management with over six years spent at Fidelity Worldwide Investment in Dublin, servicing corporates, banks, pension funds and financial institutions. She previously served as a stockbroker with Cantor Fitzgerald and as an FCA regulated advisor at Lehman Brothers and with UBS Private Banking in London. Vanora is Vice Chairperson of the Irish Funds Marketing and Promotions Steering Group and Chairperson of the Irish Funds Publications and Communications Working Group.