As a global hub for fund administration and domicile, Ireland has long held a central role in the asset management ecosystem. While much of the attention has focused on its position as a centre for retail-friendly Ucits products and more complex hedge funds, an increasingly influential but often underappreciated part of the picture is Ireland’s role in the sub-advisory investment market.
The country has emerged as a key player in connecting global asset managers with local expertise, acting as a gateway between investment sponsors and sub-advisors managing strategies across a wide spectrum of asset classes.
What are sub-advised funds?
Sub-advisory relationships typically involve a fund sponsor – such as an insurance company, pension provider, or asset manager – outsourcing portfolio management to a third-party investment adviser, often with specialised expertise in a specific strategy or market. The sponsor retains ownership of the fund and responsibility for distribution, compliance, and branding, while the sub-advisor is contracted to execute the investment strategy.
These arrangements offer flexibility, allowing sponsors to diversify offerings quickly without building in-house capabilities. For sub-advisors, they present a way to scale assets under management (AUM) without the burden of retail distribution.
In Ireland, this model has flourished – particularly as international firms have used Irish-domiciled funds as platforms to tap global sub-advisory expertise.
Hub-and-spoke models
The growth of sub-advisory in Ireland is closely linked to broader trends in global fund distribution. Increasing demand for multi-manager and model portfolio solutions, coupled with rising regulatory and operational complexity, has led many sponsors to opt for a hub-and-spoke model where Irish-domiciled funds serve as the legal and operational hub, while sub-advisors – often in the US, UK, or Continental Europe – serve as ‘spokes’ providing investment expertise.
According to Irish Funds, the representative body for the funds industry in Ireland, over €5.154 trillion in assets are serviced in the country.
For fund sponsors, selecting and overseeing sub-advisors introduces additional layers of due diligence, operational coordination, and regulatory oversight.
While data on the exact size of the sub-advisory market is difficult to isolate – given the variety of structures and mandates involved – industry observers report that the number and value of mandates has been rising steadily over the past decade.
Part of the appeal lies in Ireland’s robust regulatory regime, attractive tax treatment, and deep bench of service providers. These include fund administrators, legal advisers, and management companies (ManCos), many of which are now authorised as Super ManCos, offering both Ucits and alternative investment fund services. This infrastructure provides the necessary support to manage complex multi-manager fund structures efficiently.
Drivers of demand
One of the key growth drivers in the Irish sub-advisory market is the shift toward open architecture in wealth management. Rather than relying solely on proprietary products, wealth managers and fund sponsors are increasingly incorporating third-party strategies to build more diversified and tailored portfolios. This has opened the door for specialist asset managers to participate in global fund distribution through sub-advisory agreements.
In addition, the post-Brexit landscape has solidified Ireland’s position as a European gateway for non-EU managers. US-based asset managers in particular have found the Irish market to be an ideal launchpad for accessing European investors, often via Ucits or ‘alternative investment fund’ (AIF) structures managed by Irish ManCos but sub-advised by investment teams in the US.
Technology has also played a role, enabling better transparency, risk management, and reporting across complex multi-manager structures. Digital platforms and data tools make it easier to monitor sub-advisors, support regulatory compliance, and demonstrate value to end investors.
Challenges and considerations
Despite its growth, the sub-advisory model is not without challenges. For fund sponsors, selecting and overseeing sub-advisors introduces additional layers of due diligence, operational coordination, and regulatory oversight. The Central Bank of Ireland (CBI) has placed increasing scrutiny on delegation arrangements, particularly in light of broader EU-level concerns about substance and governance within fund management companies.
The CBI’s Fund Management Company Guidance (CP86), which outlines expectations around governance, oversight, and resources, has had a meaningful impact on sub-advisory arrangements. Management companies are now required to demonstrate effective oversight of all delegated functions – including investment management. This has placed pressure on firms to enhance their governance frameworks and ensure that sub-advisory relationships are closely monitored.
Meanwhile, fee compression across the asset management industry has made profitability a challenge, especially for smaller sub-advisors. As sponsors look to negotiate more competitive fee splits, sub-advisors must find ways to deliver alpha while operating at scale.
Outlook: Consolidation and innovation
Looking ahead, the Irish sub-advisory market appears poised for continued growth, albeit with some evolution. One likely trend is consolidation, as fund sponsors seek to streamline relationships and focus on sub-advisors who can deliver consistent performance, operational excellence, and ESG integration.
Innovation will also be key. The rise of tokenisation and digital fund structures, increasingly discussed in the Irish funds industry, may open new avenues for sub-advisory distribution and operational efficiency. If digital assets and blockchain-based fund administration gain traction, Ireland’s tech-savvy fund ecosystem may find itself at the forefront of the next evolution in sub-advisory services.
How Ireland became the “best place for sub-advisory” fund management – Funds Europe
As asset management continues to globalise, Ireland’s role as a strategic hub – linking global investors, fund sponsors, and specialist sub-advisors – will likely become even more vital. Quietly but confidently, Ireland’s sub-advisory market is shaping the future of cross-border asset management.
