There have been two recent government updates – the UK Budget; and in Ireland, the Department of Finance issued its Funds Review 2030 Report

Here is a summary of what these mean for the funds industry:

1. In the UK, Chancellor Rachel Reeves announced her first Budget on 30 October – with a promise to “fix the foundations of our economy” and “rebuild Britain.”

The latter measures are perhaps the most eye-catching.

Alongside some £100bn of public investment over the next five years, the Government expects to attract private investment in transport, the delivery of 1.5 million homes, supporting new industries and job creation, and protecting research and development.

They also

• created a National Wealth Fund to catalyse over £70bn of private investment,

• promised an infrastructure strategy and an industrial strategy to support investment in growth-driving sectors,
• and launched a pensions review to unlock greater investment in UK growth assets.

Before the Budget, the UK Government announced it had already secured £63bn of private sector investment across 22 projects – supporting the creation of close to 38,000 additional jobs.

If this budget was principally about breaking with the past – one strong continuum is the growing role of private sector capital. This builds on the previous Government’s Mansion House Compact, which seeks to direct pension fund money into UK assets – and which has been very successful in our view.

“More private fund launches will certainly follow, and not just in Long-Term Asset Funds”

John Donohoe

Our Atlas research¹ shows the alignment between state and private sector thinking: defined contribution pension schemes plan significantly more private markets investments over the next five years.

This includes private equity, private credit, infrastructure and other strategies. Fund managers are also expanding their DC client proposition – and we have seen a significant rise in fund managers launching, or considering launching

More launches will certainly follow, and not just in LTAFs

1 Research commissioned of 51 UK and European DC pension schemes collectively managing $317 billion in AUM. The study was conducted in May 2024 by the market research company Pureprofile.

2. In Ireland, on 22 October, the Department of Finance issued its Funds Review 2030 Report.

This “sought to ensure that Ireland’s funds sector framework is resilient, future-proofed, supportive of financial stability and a continued example of international best-practice.”

This is a very positive report. Our view is that it could perhaps have gone further in its recommendations.

It is pleasing to see commitment to maintaining Ireland’s dominant position on ETFs. This is an area of growth – as fund managers launch products to meet investor demand – not without questions on transparency.

We therefore welcome the Review’s request that the Central Bank of Ireland keep its portfolio transparency requirements under consideration and stay open to alternative approaches.

“Ireland continues to be an extremely attractive funds domicile”

Des Fullam

The Review also proposes simplifying the way Irish funds are taxed, which includes aligning taxation with the standard 33% rate of capital gains tax. Such measures make funds much more attractive to domestic investors.

Changes to Ireland’s Investment Limited Partnership regime and tax reforms that support growth in private markets are also timely. These are measures that will boost Irish competitiveness in the fast-growing private markets funds industry, as our research has suggested.

Perhaps other aspects might appear missed opportunities.

An indirectly regulated funds regime would have further bolstered Ireland’s position in private assets.

And questions about, say, private asset liquidity mismatches are already encompassed by the existing Alternative Investment Fund Managers Directive. This might not regulate fund products directly, but it does impose obligations on the firms that manage them. We think this is sufficient.

That said, Ireland of course continues to be an extremely attractive funds domicile. And the UK is now even more attractive for private markets investments.

These two recent announcements emphatically confirm such assessments.