Time is now to boost Ireland's funds industry
Ireland's funds and asset management sector stands at a pivotal moment.
With decades of experience and a strong reputation for expertise, Ireland has established itself as a global powerhouse in funds and asset management. But we cannot stand still.
Shifting investor expectations, intensifying international competition and major EU policy developments – such as the proposed Savings and Investments Union (which aims to make it easier to save and invest) – require us to evolve and future-proof our offering and capabilities.
This sector is not only a cornerstone of Ireland's international financial services offering, it is also an engine of domestic growth, regional development and high-value employment.
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According to the latest Indecon report commissioned by Irish Funds, the industry contributed €15.4 billion in gross value added to the Irish economy.
Employment in the sector has grown by 22 per cent over the past five years, with nearly half of all funds professionals now based outside Dublin. As of the end of 2023, the industry supports a total of 37,500 full-time equivalent roles nationwide.
Ireland's ecosystem supports every type of investor from individuals to the largest global pension funds. It does this by enabling them to pool their resources in investment funds based here under EU law.
While these names may not be familiar to many outside the industry, undertakings for collective investments in transferable securities (UCITS), money market funds (MMFs), exchange traded funds (ETFs), alternative investment funds (AIFs) and European long-term investment funds (ELTIFs) hold the savings of millions of people around the world.
This system has helped Ireland build one of the most successful and trusted investment funds hubs in Europe. Yet continued success is not guaranteed.
Ireland's strong EU market share has been earned over decades by enabling people to invest for their future, and these needs are only increasing.
Thanks to a robust regulatory foundation, the industry has remained responsive and resilient. According to the European Fund and Asset Management Association's December 2024 data, Ireland continues to hold a significant portion of the European fund market. To sustain and expand this position, we must address pressing challenges.
At a European level, the drive for simplification and competitiveness is in full swing. Globally, trade policies are shifting, with goods
tariff
measures and countermeasures being announced regularly.
Funds domiciled in Ireland hold investments worldwide and are vital funding of both EU and non-EU economies. Ireland must continue to engage in diplomatic and industry-level discussions to ensure what we do here for economies and citizens is understood. Competition within the EU is also intensifying, with other markets vying to replicate our success and increase their share of the European funds sector. Ireland must continue to differentiate itself through agility, innovation and a clear policy roadmap.
Ireland's investment funds sector has proven its resilience, weathering economic and geopolitical shocks while remaining a central pillar of Europe's financial system. But resilience alone won't carry us forward.
To stay ahead, Ireland must move from preserving its current strengths to shaping the future. The Funds Sector 2030 Review offers a clear roadmap. That means closing gaps in our offering, particularly for those wishing to invest in private assets, and modernising our framework to compete globally. Without targeted policy updates, streamlined regulation and tax reform, we risk falling behind.
At the same time, Ireland's role as a transatlantic investment hub has never been more important. We connect US capital to European markets and vice versa, underpinning cross-border flows that fuel businesses, pensions and infrastructure. Any loss of competitiveness here would have ripple effects well beyond our shores.
Ireland must protect its leadership in areas such as ETFs, prepare for the digital future of fund management and deliver on the 2030 Review with urgency and intent. This is our ambition as much as resilience.
One of Ireland's biggest growth opportunities lies in becoming a hub to enable institutional and retail investors to invest in private assets. These assets, which represent direct investments in businesses, projects or physical assets (such as infrastructure) not traded on public exchanges such as stock markets, are a fundamental component of investors' portfolios. They generate strong returns and are meeting real-world needs.
For example, over the past two decades, US state pension funds earned annual returns of 11 per cent from private equity – nearly double the return of global equity benchmarks. These investments are also increasingly accessible to individual investors through regulated fund structures. That investment in private assets is helping finance the infrastructure Ireland and the EU needs – from housing and hospitals to energy, transport, and water systems. With the right framework, Ireland can position itself as a leading European destination for long-term, sustainable capital.
Yet at the moment we are falling short. Investors want access to private assets through Irish-domiciled funds but we are not providing that effectively. This is a missed opportunity for growth and to underpin the competitiveness of existing products that support jobs across the country.
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To remain competitive, Ireland must implement targeted regulatory and tax changes as well as quickly transposing key EU legislation to create a level playing field.
Failing to do so could weaken our broader investment proposition at a time when global capital is on the move.
Ireland has the talent, infrastructure and track record. What we need now is the policy certainty and momentum to match.
Pat Lardner is chief executive of Irish Funds
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