In 2013, the IFIA Transfer Agency Committee (“TA Committee”) conducted a survey of the TA industry in Ireland. Similar to surveys carried out in previous years, the main objective of the survey was to capture up-to-date information on the sector, with particular focus on highlighting the wide ranging capabilities and expertise available and the categories of investors in funds administered from Ireland. The 2013 survey gathered responses from 17 of the leading fund administrators; all information relating to clients/funds/investors is as at 31 December 2012, with transaction volumes being for the year ended 31 December 2012.
With subscriptions and redemptions in excess of $2 trillion each, and the volume of trades approaching 7.5m during the period, one of the main focuses of the 2013 survey was to collate information on the level of automation available and in use within TA. The results showed approximately 86% of all trades processed were automated; file upload being the main method of receipt for automated trades, with fax being the dominant method for manual trades.
The survey also explored the use of various platforms such as Allfunds, Calastone and Clearstream to name but a few. This is in line with ongoing initiatives by various TA committee sub-groups to work with technology providers and organisations such as SWIFT to facilitate and promote the use of platforms for automated trading. While 55% of fund promoters were reported as using a platform, the actual volume of trades received is much lower at approx. 10% of total trade volumes. While Vestima and Fundsettle are the most used platforms across the TA sector, the highest volume of trading is actually received via SWIFT and EMX. Interestingly, of 14 respondents providing an online portal for over 200 Clients, only 8 Clients are reported to be active users for trading purposes.
The types and complexities of funds serviced in Ireland vary; an analysis of the fund structures shows that Irish domiciled funds account for 50% of share classes, with Cayman Islands being the next highest at 32%. Other domiciles include USA, the UK, as well as the more traditional offshore centres of BVI and the Channel Islands. The majority of alternative classes operate a performance fee methodology at fund, class or investor level, but this figure is 7% for long only funds. In addition, almost half of the classes operate a monthly dealing cycle, with 44% offering daily dealing. The survey confirmed that both staff and management in TA in Ireland have a high level of experience and expertise – of the approximately 1,000 staff working in TA (among the respondents), almost half of staff have 5+ years in the industry with an average of 12 years’ experience at management level. This represents an increase from an average of 9 years’ experience at management level in 2007.
The TA sector in Ireland strengthened its global reach, servicing a diverse array of investor types across a wide range of geographic locations. While Asia accounted for the majority of investors in Irish domiciled funds, Europe was the main location for investors in non-Irish domiciled funds. TA staff in Ireland are well equipped to deal with the diverse locations, with a wide range of foreign languages being supported, mainly European and Asian. A number of fund administrators also have offices outside of Ireland providing operational support or services to the TA teams in Ireland, most notably for functions such as reporting and order processing.
Written By: Valerie Matthews, Senior Account Manager, Phoenix Financial Services Limited.