A greater awareness of governance in Ireland’s funds industry came about just in time for the Covid-19 crisis, writes Nick Fitzpatrick in the May issue of Funds Europe that has a special report on Ireland. But the regulator is keenly watching developments and has been ramping up the focus on liquidity risk since at least last year.
Funds regulator the Central Bank of Ireland (CBI) sent out a letter in August 2019 highlighting the responsibility of fund boards, including directors and designated persons, in relation to managing liquidity risk. Since then, the CBI has also sent questionnaires to Ucits management companies and alternative investment managers to probe their use of liquidity management tools.
Within the CBI’s current focus on liquidity management is likely to be the increasing amount of non-bank lending being facilitated through Irish-domiciled funds. The CBI has noted a large increase in collateralised loan obligations (CLOs) – complex lending instruments that predominantly UK and US asset managers have stored away in Ireland. The assets of Irish CLOs have grown “rapidly” in recent years, the CBI says, from just €15 billion at the start of 2014 to €78 billion by March 2019.
Our wider report on Ireland includes interviews with some of the country’s fund professionals, an Association Column written by Pat Lardner, who is the CEO of Irish Funds. There is also a webinar available to download.
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