A recent study has identified regulatory environment and talent availability as pivotal factors impacting the growth of Ireland’s funds and asset management industry over the next five years. Conducted by Indecon on behalf of Irish Funds, the research revealed that 82% of firms surveyed ranked the domestic regulatory landscape among the top five influences on sector expansion, while 73% cited talent availability as the foremost challenge.
More than two-thirds of respondents referenced EU policy and the legislative environment as significant considerations, with 64% highlighting labor costs as another concern. The study underscores the industry’s economic contribution, noting that by the end of last year, total assets managed and serviced in Ireland had reached €5.7 trillion, with 13,942 funds under administration—an increase of 28.4% since 2008.
The industry employs approximately 37,500 full-time equivalents, with direct employment numbering 19,519, marking a 22% rise over the last five years. The sector has also become increasingly regionalized, with nearly half of its workforce now located outside Dublin, up from 38% in 2020.
In terms of economic impact, the sector contributes nearly €1 billion in direct taxes and generates €11.45 billion in revenue, along with €15.4 billion in Gross Value Added to the economy. Labor spending reached €2 billion last year, with investment and asset managers accounting for 30% of this total, alongside significant contributions from fund administration and legal services.
Indecon’s findings emphasize the necessity for collaboration between industry and government to foster further growth and maintain Ireland’s competitive edge in global financial markets. The report specifically highlights private markets investing as a potential area for expansion, contingent on the right legal and regulatory environment.
Pat Lardner, Chief Executive of Irish Funds, expressed optimism about the industry’s growth, stating, “By meeting the needs of investors and savers from around the world, Ireland’s funds and asset management industry has demonstrated strong growth.” He called for regulatory adjustments to enhance agility and efficiency, allowing the sector to adapt to evolving investor demands.
Lardner also stressed the importance of diversifying service offerings to protect against economic volatility. He noted that the industry has weathered various economic conditions over its 35-year history and continues to thrive.
Additionally, the report emphasizes the need for robust environmental, social, and governance (ESG) frameworks and the adoption of AI, machine learning, and big data to ensure ongoing competitiveness.
As part of regulatory efforts, the Central Bank of Ireland is enhancing the resilience of non-bank financial intermediaries, introducing plans to limit property fund borrowings and collaborating with Luxembourg to strengthen UK fund resilience following recent financial challenges.