UK – A £6bn (€8.7bn) UK-based pension fund is being transferred into a Dublin-domiciled Common Contractual Fund, according to a report from the Investment Management Association.
The news came in a look at the future of UK asset management prepared by the IMA, the Corporation of London and consulting firm Oxera, based on interviews and questionnaires.
The report said Ireland has been able to attract investors with the new CCF, which it said is a contractual agreement between investors that more closely resembles a partnership than a trust.
“CCFs may make Ireland the preferred jurisdiction of choice of pooling vehicles, especially those for pension funds.
“One interviewee noted that, following pressure from overseas pension fund investors, they were in the process of transferring a £6bn fund that is currently domiciled onshore into a Dublin-domiciled CCF.”
An IMA spokeswoman was not able to name the fund and Oxera also declined to disclose the name, as the interviews were conducted on the basis of confidentiality.
The IMA report noted that the UK’s attempt at pooling, the Pension Fund Pooling Vehicle, failed because it was based on the legal structure of a trust which was “unattractive to overseas investors”.
The report – “The Future of UK Asset Management: Competitive Position and Location Choice” – also identified the growth of European funded pension schemes as having an impact on UK fund managers.
It said there is an opportunity for managers to capture some of the expanding French and German pension fund markets. But on the other hand, “the growing pools of savings outside the UK may allow other financial centres to develop at the expense of London”.
IMA chairman Lindsay Tomlinson said: “While the overall message of the report is positive we cannot afford to be complacent.
“The fact that nearly a quarter of respondents said that regulation or tax already pose the greatest disadvantages to doing business in the UK suggests that this has the potential to become a crucial issue in the longer-term."