UCITS products are enjoying significant growth in Ireland as many fund managers look to establish these products to compliment their existing fund offering confirms Linda Gorman (pictured), CEO of Quintillion Limited, a European-based affiliate of US Bancorp Fund Services.
Over the last five years, Ireland has experienced an 81 percent growth in UCITS funds, which, according to the Central Bank of Ireland figures, as of 31 December 2016, total EUR1.578 trillion in AUM. UCITS currently account for approximately USD6 billion of US Bancorp's worldwide AuA of USD110 billion.
Ireland is now home to just over 4,000 UCITS funds, and with uncertainty surrounding Brexit and the potential barriers to entry this could create, Gorman says that UCITS, and other European domiciled fund structures are "becoming a key focus of European managers, as well as US managers, looking to access the EU market".
"Quintillion is well placed to support these products. We operate in a highly controlled environment and employ a daily operations cycle for all funds that we administer. This is the perfect discipline for UCITS funds that require daily NAVs and daily liquidity," says Gorman.
When Quintillion was established 10 years ago, it had a specific objective of servicing the investment management industry with leading edge technologies combined with an experienced talent pool. "This approach is a core philosophy. Today as part of US Bancorp Fund Services our dedicated product and strategy group is a component of an enterprise wide team, focused on extending and deepening our product offering across a range of different areas," states Gorman.
"Our open IT infrastructure has enabled us to clearly meet the requirements of UCITS reporting, from the depositary to the management company to the investment manager. The combination of our operating environment and leading technology fits well with meeting the rising interest in UCITS among US and European fund managers."
Another factor that works in Quintillion's favour from an investment management perspective, relates to a recent CBI white paper on outsourcing, which indicated that up to 61 per cent of administration services in Ireland are outsourced to other jurisdictions. Quintillion does not fit into this category – it operates from Ireland as a centre of excellence and simply does not outsource. The benefit is that the client knows that the entire service team is based in one location, taking real ownership of the service, which is critical in a daily UCITS environment.
"We need to be nimble, knowledgeable and reactive as an administrator without going down the outsourcing route, which some of our competitors have done," says Ken Somerville, Chief Operations Officer at Quintillion.
"With our knowledge and experience, we can help managers navigate the market, and clearly understand UCITS requirements and infrastructure. Hedge fund managers have turned to UCITS vehicles to accommodate a broader range of investors"
Before launching a UCITS vehicle, Gorman notes that Quintillion team will always shares its experience with the client in initial discussions.
"Managers may not be familiar with the depositary role, or how the various restrictions and expenses of running a UCITS work. With our clients, we take a partnership approach and help them to consider all the issues surrounding the management of fund products, including UCITS," states Gorman.
On winning this year's award, Gorman comments: "We are proud to be recognised for the quality of our UCITS offering."
