Industry Insights: Why U.S. managers choose Ireland to access European capital

Contributed by Scott Kraemer, Head of Markets U.S., Aztec Group and Kevin Hogan, Head of Fund Services Ireland and Group Head of Private Credit.

With an estimated $750+ billion worth of U.S.-promoted private capital held in Europe’s key financial centres, U.S. fund managers are increasingly looking to Europe to launch additional fundraisings. Aztec Group explains how U.S. managers can navigate Europe’s complex regulatory landscape to structure and domicile funds here, allowing them to access more European investors as simply and as quickly as possible.

European investors including pension funds, sovereign wealth funds, and insurance companies, prioritise regulated, institutional-quality structures to invest in, structures which are domiciled in reputable jurisdictions, like Ireland. Of the 997 fund managers with funds domiciled in Ireland, almost a third are U.S. managers. The reasons are many.

In addition to its language advantage as the only native English-speaking Member of the EU, legal familiarity and skilled workforce, Ireland is a sophisticated platform for engaging European investors that supports 30 languages and 28 currencies. For U.S. managers too there is an added ancestral link with Ireland, with as many as six million Irish people having immigrated to the U.S., the majority during the mid-1800s. It’s a lasting relationship, a strong foundation on which to build.

Ireland as a jurisdiction

As a gateway to European investors, particularly post-Brexit, Ireland’s proposition is compelling. The private markets industry has grown rapidly, expanding from $36 billion in 2015 to $370 billion assets serviced in 2024 (Monterey Insight Reports 2015-2024).

• Of the $6 trillion assets under administration (AUA) serviced in Ireland, $370 billion of it is classified as private markets of which $195 billion is domiciled in Ireland and it is increasingly a European domicile of choice for private markets.

• Ireland is the domicile for 6.5% of investment fund assets worldwide, making it the third largest global centre and the second largest in Europe, as well as the fastest growing domicile in the EU.

• Within the EU, Ireland has the highest proportion of the adult population with a third level qualification (55%), and is ranked third globally. It also boasts the youngest population in the EU.

• Ireland is an open and tax efficient jurisdiction and it also has the lowest headline corporate tax rate in the OECD and has tax treaties with over 70 countries.

• Ireland is a committed member of the EU and will remain so, providing full market access to the EU.

• The Irish government specifically identify private markets as an area of focus and commitment in the Fund Sector 2030 Report.

• Regulatory change continues to increase Ireland’s attractiveness as it is more and more competitive with Luxembourg.

At a recent industry event, hosted by Aztec Group, Irish Funds’ Conor Kilroy underlined why the commitment to supporting private markets is a priority: “There’s a commitment and support domestically to develop and grow the private asset sector in Ireland. …The prioritisation to mobilise private capital is a real opportunity. Private asset funds are Irish Funds’ number one strategic objective, and we will continue to work with key stakeholders to develop and enhance Ireland’s private asset offering.”

A framework enabling fundraising

Ireland allows U.S. managers to access European investors via the Alternative Investment Fund Managers Directive (AIFMD). This regulatory framework enables private funds to be marketed across Europe. Instead of having to comply with the regulation of each EU Member State individually, managers are able to access them all through an AIFMD Passport. This includes all Member States of the European Economic Area (EEA), which is all the 27 Member States of the EU as well as Iceland, Norway, and Liechtenstein.

From a structuring perspective there are a number of options for U.S. managers looking to domicile a fund in Ireland. The Irish Collective Asset-management Vehicle (ICAV) is a flexible, tax-efficient structure with a simple regulatory framework, and is well-suited for closed-ended private funds. In addition, the Qualifying Investor AIF (QIAIF) is a fast-track structure specifically designed for professional investors. It offers broad investment and borrowing powers, no leverage or diversification limits, a 24-hour Central Bank approval turnaround, tax neutrality and efficient repatriation of capital.

Ireland’s deep bench of service providers with expertise in private capital includes specialist fund administrators, lawyers, auditors, custodians and depositaries, when coupled with Ireland’s best-in-class operational infrastructure this 20,000-strong workforce becomes another drawcard for U.S. fund managers.

Considerations for U.S. managers

Fundraising in Europe presents new opportunities, but also prompts important regulatory, structural, and strategic considerations which need to be factored in. U.S. managers should keep in mind several key points:

1. Choosing the right structure takes expertise. The ICAV with QIAIF status is often the go-to for private equity, private credit, and real asset strategies. Structures can be closed- or open-ended, umbrella or standalone, with master/feeder options. They are ideal for institutional and qualified investors with a minimum subscription of €100,000. These structures differ from Delaware or Cayman Island structures, so managers should seek support to understand these differences, among them the need for depositary services and how they are regulated.

2. Most U.S. General Partners (GP) decide to appoint an EU-authorised third-party AIFM to manage their funds, which simplifies regulatory compliance and allows access to marketing passports without needing to build a full EU presence, or set up an AIFM in-house – something which can be hugely costly and time-consuming.

3. Europe is not one market but many. Engaging experienced distribution partners or placement agents who understand regional nuances is important when planning your distribution strategy.

4. Europe’s regulatory frameworks are complex. For example, Europe leads in ESG regulation and to appeal to European Limited Partners (LPs), managers should be prepared to disclose under the Sustainable Finance Disclosure Regulation (SFDR) and consider ESG integration as part of the investment thesis and reporting strategy. Being domiciled in Ireland demonstrates a commitment to these ESG expectations and reduces friction during due diligence. Also, another area where local understanding and guidance is required is to be fully compliant with EU privacy requirements.

5. Private funds require specialised administration. Selecting a fund administrator with strong expertise in the European market covering processes including loan servicing, capital call/distribution processing, performance waterfall calculations, portfolio company data aggregation, and regulatory and investor reporting, is crucial.

Ireland is already the domicile of choice for a huge number of U.S. funds, being the largest European jurisdiction for ETFs and Money Market Funds and U.S. investment firms may already have a presence, funds located, or a legal contact that they are familiar with in the jurisdiction. Ireland is more than just a fund domicile – it’s a strategic gateway for private fund managers looking to scale globally, giving U.S. GPs the foundation they need to raise, operate, and thrive in Europe. 

Visit Aztec Group for more detailed information on fundraising in Europe for U.S. Managers.