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Ireland’s updated ILP legislation will drive strong growth in private funds in 2021

17 December 2020

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The long-awaited update to the Investment Limited Partnership (ILP) Bill in Ireland has now passed all stages of the parliamentary process and is now awaiting final sign off by the President. The new ILP legislation makes Ireland an even more competitive jurisdiction for private investment funds and will likely see not only new business flow into Ireland but also established managers in other jurisdictions move domiciles.

“We expect that the ILP amendments will drive strong activity in January 2021 and across the new year. It makes Ireland a highly attractive jurisdiction for private capital asset managers – especially those based in the UK, US, Europe & Asia,” said Imelda Shine, Managing Director Ireland – Intertrust Group.

“The new legislation will result in further private investment fund structures being set up in Ireland. The country’s already a leading jurisdiction for both domiciled and non-domiciled funds – Ireland administers 40% of the world’s alternative investment funds, for instance – but this new legislation could see that number rise significantly.”

Among other benefits, the ILP regime and the pending updates to the AIF Rulebook offer greater flexibility and cost-efficiencies, allowing improved operation of ILPs for managers and investors (including excuse and exclude provisions and stage investing) and a more straightforward process for capital withdrawals and distributions. It offers additional advantages such as the ability to establish umbrella ILPs and the possibility to migrate a Limited Partnership to Ireland.

According to the Irish Funds Industry Association, the total assets of Irish-domiciled AIFs stood at €760bn as of October 2020 .This is up from €610bn as at the end of 2018. The expectation is that the new legislation will see further strong growth going forward, with some estimates suggesting assets could grow by 10% in 2021 alone.

Intertrust Group’s in a unique position to service private investment funds – such as private equity, private debt, real estate, and infrastructure structures – in Ireland. The firm can cover the ILP structure across its full suite of services from funds, corporate and capital markets service lines including third-party AIFM, fund administration, SPV/HoldCo administration, middle office and carried interest and deferred compensation services.

Imelda continues, “We have established a large private capital client base in Ireland and across Intertrust Group. Many of our clients have already begun to evaluate the amended ILP structure, given our capabilities across AIFM services, fund administration and SPV corporate services. Our proposition gives us the ability to service the ILP structure end-to-end and we’re very well positioned to cater for the increase in demand and service requirements. Clients will benefit from the economies and efficiencies achieved from partnering with one-provider across their investment structure.”

“Indeed, for our Ireland office, we anticipate strong growth in Alternative Investment Funds and the further strengthening of our fund administration and third party AIFM service offering.”