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30 March 2017

PREMIUM SPONSORS

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SPONSORS

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Brown Brothers Harriman, Irish Funds

Alan O’Sullivan

Welcome Address

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Ambassador of Ireland to Great Britain

H.E Daniel Mulhall

Keynote Address

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Moderator:

Panellists:

irishfunds.ie

Investing in Real Assets

Panel Discussion

Michael Humphreys, Davy

Isabella Pacheco, Blackrock

Alexander Kalis, Milltrust International

Vincent Coyne, William Fry

Panellists

Moderator

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Moderator:

Panellists:

irishfunds.ie

Irish Funds Updates

CP86 - Michael Barr, A&L Goodbody

Themes and trends in middle office servicing - Fergus McNally, EY

Investment Limited Partnership - Adam Donoghue, Maples and Calder

Common Contractual Funds - Philip Murphy, KPMG

Damian McAree, MUFG

Moderator

Panellists

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A&L Goodbody

Michael Barr

CP 86 Update

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CP 86 AND WHAT IT MEANS FOR YOU

• Background

• Overview of new requirements

• Timetable for implementation

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BACKGROUND TO CP86

• Has been in germination for a couple of years

• Keeping up with and front running good corporate governance requirements

• Addressing the issue of substance

• Who does it apply to?

– Irish UCITS Mancos, UCITS, SMICs, AIFMs and internally managed AIFs (with

limited impact on externally managed fund structures)

– Non-Irish UCITS Mancos and AIFMs passporting into Ireland are not affected

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OVERVIEW OF THE NEW RULES

• Streamlined managerial functions

• Organisational effectiveness role

• Supervision/location of directors and designated persons

• Rationale for board composition

• Retrievability of records

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TRANSITIONAL ARRANGEMENTS

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Rules and Guidance Fund ManCo Authorised before

1/11/2015

Fund ManCo Authorised between

1/11/2015 and 30/06 2017 (inclusive)

Fund ManCo Authorised after 30/06/2017

6 Managerial Functions 1/07/18 Applicable from date of authorisation

Performanceof the organisation

effectiveness role

1/07/18 Applicable from date of authorisation

Effective supervision requirement/

location rule

1/07/18 1/07/18 TheCBIwill onlyauthorise entities that are

organisedinaway that complies with these

provisions.Retrievability of records

Guidance: Part I Delegate Oversight 4/11/15 Applicable from date of authorisation

Guidance: Part IIOrganisational

Effectiveness

Applicablefromthe datethat aFundManCohas appointed a person totheOrganisational Effectivenessrole, or1/07/18 at the latest.

Guidance: Part III Directors’ Time

Commitments

4/11/15 Applicable from date of authorisation

Guidance: Part IV Managerial Functions 1/07/18 1/07/18 Applicable from dateof

authorisation

Guidance: Part V Operational Issues Retrievability of records: 1/07/18

Dedicated email address:

30/06/17 (CBI looking for details of address

by end April)

Retrievability of records: 1/07/18

Dedicated emailaddress:

30/06/17 (CBI looking for details of

address by end April)

Retrievability of records: Applicable

fromdateof authorisation.

Dedicated emailaddress: Applicable

from dateof authorisation.

Guidance: Part VIProcedural matters Thisguidance is a reflection of the existing Fund ManCoguidance. Therefore no transitional arrangements apply.

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EY

Fergus McNally

Themes and Trends in Middle Office Servicing

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Maples and Calder

Adam Donoghue

PE & Investment Limited Partnership

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THE RISE OF REGULATED PE/ REAL ASSET FUINDS

Growth of PE globally

EU promotion of non-bank financing

Rise of “hybrid” strategies

Post-2008

“onshore drift”

Increased familiarity with outsourcing

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IRELAND AS A LOCATION FOR PE FUNDS

• Many leading PE managers already active in Ireland

• Irish AIF regulatory framework already allows key PE fund mechanics:

• ICAV is so flexible that it can cater for most PE features

BUT…

• Vehicle of choice in PE/ RE industry is limited partnership

• Ireland does have LP options, but outdated (1907 and 1994) and less flexible than other

leading domiciles

Carried interest Multiple and longer initial closings

Distribution waterfalls “Excuse and exclude” allocation of assets

Capital commitments, drawdowns and

partly paid shares

Ability to assume management control

over an issuer

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PROPOSED LEGISLATIVE REFORM

• Government fully supportive: LP reform is a stated priority in its IFS 2020 strategy

• Investment Limited Partnership (Amendment) Bill is on 2017 legislative programme.

• Many proposals reflect equivalent recent amendments to UK’s 1907 LP Act

• Amendments expected to include:

- Streamlining of redemption procedures

- Conforming liability of service providers with other fund models

- Expanding scope of permitted “safe harbour” activities by LPs

- Ability to make non-material changes to LPA without investor consent

- Ensuring appropriate level of access to register and details of LPs

- Ability to create umbrella partnerships

- Expanding scope of eligible GPs and LPs

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KPMG

Philip Murphy

Common Contractual Funds

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Common Contractual Funds – an overview

• First established for UCITS funds in 2003

• Extended to non-UCITS in 2005History

• Regulated asset pooling fund structure

• Designed to allow pension fund and other institutional investors avail of advantages of collective investment, without withholding tax disadvantages of investing via a regulated fund vehicle

Purpose

• Unincorporated body established by an Irish management company

• Transparent from an Irish legal and tax perspective – each investor treated as a tenant in common deemed to hold a proportionate share of the underlying assets in a co-ownership capacity

Legal & tax status

• Over 70 funds created since 2003

• Tax transparency confirmed in over 20 investment jurisdictions including Australia, Canada, Germany and the US

Position to date

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Common Contractual Funds – overview of tax efficiencies

• Intention of a CCF is to ensure investors are subjected to the same tax treatment in a collective investment vehicle, as if they held underlying assets directly

Dutch

pension fund

US Equity US Equity US equity

Distributions

0% WHT

Irish

corporate

fund (ICAV)

Dividends

30% WHT

Indirect investment via corporate fund – Irish fund subject to 30% US dividend withholding tax, which represents an ultimate cost and drag on return to the pension fund

Dutch

pension fund

US Equity US Equity US equity

Irish CCF

Indirect investment via an Irish CCF – 0% withholding tax rate applicable under the US-Netherlands Double Taxation Agreement applicable, given transparency of the CCF from investor and investment jurisdiction perspectives

Dividends

0% WHT

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Common Contractual Funds – other advantages

Risk diversification from collective

investment

Potential VAT savings

More efficient governance for

pension trustees

Track record – in existence over 10

years

Established infrastructure in

Ireland –intellectual and IT

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Common Contractual Funds & Alternative Investments

• While CCFs were initially designed for pension funds, they may be used by any entity,

other than individuals, seeking to avail of a tax transparent structure.

• CCFs may in some case represent a suitable regulated collective vehicle for aggregating

interests of investors requiring a regulated transparent structure.

• In a post BEPS world, treaty access of corporate regulated funds may be more difficult to

manage in practice – CCFs may represent a suitable alternative in some instances!

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Coffee Break

Kindly sponsored by Intertrust

2424

Moderator:

Panellists:

irishfunds.ie

Strengthening our partnership in a post Brexit world

Ireland

Denis Curran, IDA

Manish Vekaria, Credit Suisse

Lara Aherne, SSGA

Kieran Fox, Irish Funds

Moderator

Panellists

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Moderator:

Panellists:

irishfunds.ie

De-mystifying Brexit Solutions in Ireland

Panel Discussion

Ross Thomson, Fundrock

Gayle Bowen, Walkers

Pete Townsend, Norio Ventures

Moderator

Panellists

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Structuring options: detail

SMIC Super ManCo w/

Delegates (‘v1’)

Super ManCo w/ Add-on

Authorisations (‘v2’)

MiFID Firm

Authorisation timeline 3-4 months 3-4 months 4-6 months 5-9 months

Activities (PM = portfolio

management, RM = risk management)

Retain oversight of PM &

RM but delegate day to

day activities

Retain oversight of

PM & RM but

delegate day to day

activities

Performs day-to-day PM &

RM

Full range of services

Manage other fund

umbrellas?

No Yes Yes Yes

Manage/advise

Segregated Mandates?

No No Yes, via add-on licenses

without need for MiFID

delegate

Yes

Substance

requirements

• 2 Irish-resident

directors

• 2-3 Designated

Persons1

• 2-3 Irish-resident

directors1

• 2-3 Designated

Persons1

• 2-3 Irish-resident directors

• 2-3 Designated Persons1

• Chief Investment Officer /

Managing Director

• Head of Risk/Compliance

and Finance, internal

audit.2

• Substantive presence

required in Ireland3

• Specific roles based

in Ireland2:

• Legal & compliance

• Financial control

• Risk Management

Delegation /

Outsourcing

CBI permits delegation

of day-to-day PM and/or

RM activities

CBI permits

delegation of day-to-

day PM and/or RM

activities

CBI permits delegation of

day-to-day PM and/or RM

activities

Outsourcing allowed

(including to other EEA

states or 3rd countries) if

in line with applicable

law and best practice

1. Designated persons not all required to be Irish resident and can be directors or employees of the Investment Manager. For ‘low’

PRISM rated firms, half of the directors and at least 2 Designated Persons performing half of the managerial functions are required

to be EEA-resident. For ‘medium’ PRISM rating firms, 3 directors or 2 directors plus 1 designated person should be Irish resident.

2. The need for specific roles may differ on a case-by-case basis.

3. ‘Substantive presence’ for MiFID: the firm’s board and management run the firm from Ireland and make decisions in Ireland with

sufficient staff and resources to manage the risks.

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SMIC Super ManCo w/ Delegates

(‘v1’)

Super ManCo w/ Add-on

Authorisations (‘v2’)

MiFID Firm

Capital

Required

€300,000 initial capital

(which can be met

using shareholder

funds)

One quarter of its total

expenditure in its most

recent annual accounts and

€125,000 plus an additional

amount of up to 0.02% of any

AUM exceeding €250m

whichever is greater, subject

to a maximum amount of

€10million

One quarter of its total

expenditure in its most recent

annual accounts and €125,000

plus an additional amount of up

to 0.02% of any AUM exceeding

€250m whichever is greater,

subject to a maximum amount of

€10million

Will be calculated in

accordance with CRD IV /

CRR requirements

Pros • Works well if no

other funds managed

• Less staff on the

ground

• Can manage multiple fund

umbrellas

• Can passport to other EEA

jurisdictions

• Less staff on the ground

than v2 or MiFID option

• Can perform full PM activities

or delegate

• Can manage multiple fund

umbrellas & mandates

• Can passport to other EEA

jurisdictions

• Less staff on the ground than

MiFID option

• Wide range of

permissions/potential

business lines available

• Can passport throughout

EEA without seeking

additional authorisations

Cons • Cannot perform all

PM activities

• Cannot manage or

advise mandates

• Must delegate to

regulated investment

manager

• Cannot perform all PM

activities

• Cannot manage mandates

• More staff on the ground than

SMIC or v1 option

• Add-on authorisations

possible, which may be

subject to local review when

passporting to other EEA

jurisdictions

• More staff on the ground

• Subject to CRD IV / CRR

requirements

• MiFID 2 changes in Jan-

2018

Structuring options: pros & cons

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Networking Drinks

Kindly sponsored by Capita Asset Services