Like other investment services centres such as the Channel Islands, the Isle of Man and Luxembourg, Ireland continues to look to increase the depth of its funds business by seeking to attract hedge fund managers to establish investment management functions in the jurisdiction.
But while a smattering of home-grown hedge fund management talent has emerged and various Irish financial services groups have launched ranges of alternative products, the targeted managers - individuals leaving existing management firms or the proprietary trading desks of investment banks to launch their own business - have to date resisted the welcome mat rolled out by the Irish authorities.
'So far the strategy has met with mixed success,' says Charlie Woolnough, director of business development at Fortis Fund Services. 'There remains the inescapable fact that that the majority of hedge fund front office personnel currently live and work in London and, as such, London remains the most obvious location for the vast majority of alternative asset managers.'
Mark White and Máire O'Connor at McCann Fitzgerald fear that the initiative may be doomed to failure. 'We have always acted for the largest investment managers, and some of them are starting to get into the alternative space and set up QIFs,' White says. 'There are also local Irish managers setting up boutique management companies.
'However, there have not been a large number of new investment managers coming to Ireland to set up their business, in part because it's relatively difficult to set up the investment management entity, by comparison with the ease of establishing an Irish-domiciled fund.'
O'Connor says: 'We can't get away from the fact that London is where the managers really want to be. We as an industry have been looking at this issue with the regulator to see how managers might be encouraged to make the move to Ireland, and how the regulatory regime might facilitate that.
'However, unless they are themselves Irish, hedge fund managers want to be where the action is - London. It's one thing deciding to establish your fund in another jurisdiction, but basing yourself here is a very different issue.' The framework of European Union legislation governing regulation of asset managers, under the Investment Services Directive and soon MiFID, means there is little difference between the authorisation process in Ireland and in the UK or any other EU member state.
'There isn't enough regulatory arbitrage between jurisdictions for one to be considered any easier than another for an investment manager,' White says. 'It's no different here than what the FSA do, but it's no better, and there's no possibility of it being better because they all have the same level of regulation behind them. We have seen managers coming here from the US or elsewhere thinking it might be easier from a regulatory point of view, but they quickly found out that it wasn't.'