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market . But is this a concern , or an opportunity ? Subsequently , both Ireland and Luxembourg have benefitted from the fallout of Brexit as funds made their relocation moves well ahead of time . In addition to benefiting from this repositioning , there ’ s also a quiet battle emerging between the two in the quest to be the kingpin of Europe ’ s fund ecosystem . While Luxembourg currently sits on the throne , Ireland is quickly becoming a worthy challenger , a hungry up-and-coming spritely contender with a revitalised effort to attract some of Europe ’ s sought-after private capital funds . Throughout this feature , we ’ ll explore the challenges and opportunities facing all three of these domiciles in light of Brexit , the pandemic and trends in the traditional and alternatives fund sector .
The break-up Assuming you haven ’ t been living under a rock for the past five years , you ’ ll be aware of the UK ’ s exit from the EU and the subsequent drama which ensued around the nature and timing of the break-up . Thankfully , as the date on the calendar switched from 2020 to 2021 , we at least had clarity and an end point . For Ireland and Luxembourg , there were no overnight changes for they had already reaped the arrival of funds over the past two years , but for the UK and its funds , a long journey began . Overnight , UK UCITS became non-EU funds and lost their passporting rights , impacting their ability to sell into the EU . Some shortterm pain for the UK ’ s £ 9.9 trillion asset management industry is unavoidable ; however , it now faces the opportunity to reinvent its image through a new fund regime , free from EU constraints and some experts are bullish on its potential after a turbulent divorce with the European Union . “ On a world stage the UK already has a strong reputation around regulation , governance , legal system and skilled resource . Both the industry and government are actively looking at what implications are of change , for example the current tax regime is a significant motivational factor on where a fund might establish itself ,” says Douglas Middleton , head of capital and balance sheet management , institutional banking at RBS International . The government published a Review of the UK funds regime : A call for input in January to identify options which will make the UK a more attractive location to set up , manage and administer funds . Acknowledging the challenge ahead and the advantage that hubs such as Ireland and Luxembourg have over the UK , the government is keen to assess the potential to attract alternative funds among enrich-
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