IFLR 1000
The Guide to the World's Leading Financial Law Firms

Investment funds lawyers in Ireland could be forgiven for forgetting they are in a recession. Lauded as the potential saviour of the Irish economy by the government, past and present, the funds industry has been resilient and is thriving in spite of domestic economic turmoil. Any concerns that the jurisdiction would remain such a popular one for fund promoters have proven unfounded. "The reality is that people who put these funds together know that what the investors are investing in is what the fund owns itself," says one lawyer. "The fund isn't investing in Irish assets. They are set up here for tax or regulatory reasons and the underlying exposure is not to Irish assets."

In Ireland, as the economy has declined, the number of assets under management domestically has grown exponentially. The statistics corroborate that it's been an immensely successful year. Figures published by the Irish Funds Industry Association and the Central Bank in December 2010 revealed the value of Irish domiciled investment reached an all high time of €964 billion, increasing by nearly a third on the €748 billion recorded at the same time the previous year.

The level of inquiries to the Central Bank to launch new funds has surpassed even lawyers expectations: "More than 70 new managers, promoters and finance houses are looking to establish funds in Ireland in over the last 12 months," says one.

The proclivity towards EU regulated funds in preference of riskier offshore alternatives is one explanation for the augmented numbers. "The enormous increase in volume of both new funds and assets under management in respect of Irish domiciled funds reflects this growing trend where people are moving away from tax havens or offshore jurisdictions in terms of Cayman, BVI [British Virgin Islands], Guernsey and the Isle of Man and moving to an EU regulated jurisdiction in terms of setting up their platform," says one partner.

The EU's Alternative Investment Funds Management Directive (AIFMD), which is designed to regulate the hedge fund and private equity community, also spurred investors to replicate their offshore products in Ireland.

Some of the headline features concern determining who is responsible for the hedge fund and in this respect lawyers feel it favours their jurisdiction. "At the moment it looks like the commission are leaning towards the entity or group of individuals who have the corporate governance role in respect of the alternative investment fund as opposed to the person who makes the investment decisions. We think there's a real opportunity for Ireland because that fits in with the model Ireland has developed," says one lawyer.

Outside of transactional work investment funds lawyers have been zealously preparing for the implementation of Ucits IV (undertakings for collective investment in transferable securities). In effect as of July 1 2011, the new directive evolves the Ucits product introducing a number of new procedures.

While Ucits III was a product directive that enhanced the asset classes that these funds could gain exposure to and led to an increased number of managers and promoters availing of it, Ucits IV is about gaining greater efficiencies in the European fund market.

The Qualifying Investor Funds (QIFS), the other popular onshore product, designed for the more established investor with a bigger risk appetite has also seen some enhancements. "There's been a reduction in the minimum subscription; it used to be a quarter of a million euros now it's one hundred thousand, and there used to be qualifying network criteria which has also been done away with and is easier to deal with criteria has been introduced so it's a product that has a future potential market as well," says one partner.

The Irish market welcomed a new entrant in January 2010 when offshore firm Walkers opened an office in Dublin. As Maples and Calder will attest, the Irish market is not the easiest place to break in to with rivals looking unfavourably on new competitors. The firm has already antagonised Ireland's largest firm, plundering Matheson Ormsby Prentice for three of its partners.

A lawyer from Walkers admitted that the firm had been encouraged by Maples success and hoped they could mirror could it. Competitors are however quick to point out that Maples have a substantial wallet, which they have used to invest in new talent. Walkers have also committed themselves financially and the market will wait to see how the practice develops.

Ireland's investment funds market is flourishing and it is a feisty and competitive place given the mandates on offer. A number of firms are vying for the top spot and several would like to supplant A&L Goodbody's funds practice, insisting it should be removed from its established perch. "Goodbody's have lost about 40% of their practice in the last 18 months, principally to Maples," says one lawyer.

However the funds practice also has it supporters, who insist the highly regarded firm continues to be the one to beat: "We would see A&L Goodbody as our main competitor in the Dublin market in terms of quality. I would certainly see them in tier one," says one leading funds practitioner and even the firm's critics respect practice head Brian McDermott, who is seen as one of the forbearers of the Irish funds industry having had a hand in establishing numerous products. "I have high regard for Brian McDermott," explains one, while another expands: "Brian McDermott would be very well known and has been in the industry a very long time." The negative observations and comments made about the firm should not detract from the inherent quality, experience and standing McDermott offers and the firm maintains its place in the expectation that the aforementioned incident was an isolated one.

The firm's other funds partners, Michael Barr and Niamh Ryan, have finalised some notable mandates in the last 12 months, assisting in setting up a new Ucits (undertakings for collective investment in transferable securities) III umbrella platform, Strategic Active Trading Funds, and its first sub-fund, Active Trading Fund, in May 2010. The pair advised the fund and Deutsche Bank, it's risk monitor and principal broker, which has a long-standing relationship with A&L Goodbody.

In a first for the country, Barr acted for LBBW Asset Management on establishing the first Irish QIF (qualified investment fund) that has been authorised to invest predominantly in physical silver in May 2011. The firm had previously advised the same client on the first Irish regulated fund that invested predominantly in physical gold.

A notable cross-border mandate and one of the early funds deals to come out of Brazil, saw Parr advising one of the country's Investment Banks BTG Pactual on its first regulated product, a fund of funds, on a deal which closed in September 2010.

Similarly to A&L Goodbody, Dillon Eustace's rank antagonises several of its peers who feel the firm is ranked superiorly by virtue of the quantity of funds it advises on, rather than the class of them. "They have scale but we wouldn't look at them as a competitor in terms of quality," one peer says. But positive feedback coupled with a steady deal flow, that includes some notable first time deals, guarantees the firm its place in the top tier.

The impression of clients is that the firm are a leader in the Irish investment funds arena: "They're very good and we haven't found better in Ireland," remarks one. "They are excellent we rely on them very, very heavily," echoes another. An international client, who has retained the firm for the last three years found the firm to be impeccable in all areas: "I'd have to say our experience with Dillon Eustace has been very satisfying from a customer service perspective. I guess because they are a bit of a boutique in the sense they stick to the funds and financial services work, they are very switched on to the legislative issues and they are excellent value for money compared to others. Very practical, commercial and pragmatic and my business guys like them a lot. They also provide us with a lot of know how that they don't charge for whether it's brochures on industry occurrences or a lot of disks or memory sticks with information about the latest and greatest things that are happening on that side of the world." The client had dealt predominantly with partner Brian Dillon, who the client described as technically excellent, and more recently Derbhil O'Riordan, who made partner in 2010. Of O'Riordan the client said: "Very thorough, very commercial. I was very pleased with her work."

Partner Brian Dillon, who established the firm's Tokyo office before returning to Dublin, advised Bosera Asset Management on establishing the first Irish domiciled fund promoted by a Chinese regulated manager.

On the Ucit (undertakings for collective investment in transferable securities) side, partner Brian Kelliher, who makes his debut in the leading lawyers list after persistent recommendations, advised fund provider GAM London on establishing GAM Star Trading, a sub-fund within a Ucits platform.

A deal which supports the firm's status as market leaders saw partner Etain de Valera act on the first re-domiciliation of an investment trust from Cayman Islands to the country, where it was authorised as a QIF by the Central Bank. This deal now forms the basis for the Central Bank's official guidance in this regard.

The firm has also been active securing Irish regulatory approval for Ucits to gain 100% exposure to India.

There is general consensus from competitors that founding partner David Dillon is no longer active: "It's probably been ten years since he launched a fund, he's more of an elder statesmen marketing person," says one. The partner still, however, has stature within the market: "David Dillon definitely. He has been infinitely involved in the industry since its infancy."

The second tier is regarded as a fair ranking for Arthur Cox by the market. The firm may not advise as many funds as those in tier one and some who share its ranking, or have as many dedicated funds partners but the practice has secured some innovative mandates and the partners within the group boast other accolades that speak to the high level of competency they offer. Practice head Kevin Murphy is a member of the Irish Funds Industry Association's legal and regulatory committee and the legislative sub-committee of The Taoiseach's (Irish Prime Minister) funds group; and, partner Dara Harrington, who was made up in 2010, is part of the panel for the Alternative Investment Committee.

In a precedent setting deal, Murphy advised on the first re-domiciliation of a Bermudan unit trust to Ireland as a Ucit (undertakings for collective investment in transferable securities). Another unique deal saw, Murphy act for the Brazilian Banco Citibank on establishing Citi Latin America Region Funds as a Ucits fund. It was the first time the Central Bank of Ireland allowed a Ucit to invest up to 100% of its assets in Brazilian sovereign debt.

A new trend in the Ucits space is the establishment of so-called Newcits by hedge fund managers and the Harrington has been active in this capacity, establishing a Newcit, an onshore Ucits III compliant fund, for investor Grantham, Mayo, Van Otterloo & Co (GMO) called GMO Global Real Return Fund.

A substantial fund merger, which attests to the continuing popularity of Ireland as the domicile of choice for its international funds offerings, saw Legg Mason join its Luxembourg Ucits into Irish fund Legg Mason Global Funds involving assets in excess of €1 billion.

Despite their ranks being diminished by partner Paul Farrell's relocation to newcomers Walkers in February 2011, in terms of quantity, Matheson Ormsby Prentice's eight-partner, asset management and funds group can match even the top firms. A solid performer, Walkers' move is regarded as a blow by competitors but one the substantial practice can absorb. In terms of assets under it's management, if not in regard to the number of funds, the firm is competing with those ranked above it according to several peers and on this basis they regard it as a tier one contender. Size is not everything, and the firm holds its position based on the quality of its mandates.

The practice is led by the market recommended Michael Jackson who, with a team including fellow leading lawyer James Scanlon, advised State Street, the US ETF product supplier, on launching a European platform, SSgA SPDR ETFs Europe I. Initially opening with 17 sub-funds in March 2011, a further 18 will be added to it throughout the year.

Another international client that mandated the firm in last 12 months was Lyxor, the Asset Management branch of French bank Société Générale. Partner Dualta Counihan took the lead advising the French company on launching a new QIF (qualified investment fund) for hedge fund managers and Ucits (undertakings for collective investment in transferable securities) platforms, which will provide access to strategy indices in a Ucits eligible format.

In a notable deal that was without precedent, Coniham and Scanlon acted for Bank of America Merrill Lynch on setting up a platform in Ireland, which was the first product in the country to avail of financial derivative instruments at share class level, following a submission made by group members to the Central Bank. It enables investors to put in different levels of participation in an underlying index.

Aggressive is the adjective habitually used to describe Maples and Calder, though fortunately in reference to the firm's approach to accumulating mandates and hiring, rather than its lawyers. This tactic has served its investment funds practice well and Maples has poached several prominent clients – notably Sanlam Asset Management, PineBridge Investments and Artisan Partners – and partners from its rivals since its inception. "There has been some movement of market share from A&L Goodbody to Maples maybe not new products but one or two clients with a number of funds," remarks one partner. The practice has expanded with the hire of two former Dillon Eustace funds partners: Peter Stapleton and Stephen Carty, who was most recently head of funds at Eversheds O’Donnell Sweeney, joined in April 2010 and March 2011 respectively.

Despite Maples launching five years ago, competitors still treat the firm like a young pretender: "They are a new entrant to the market. They are a very aggressive firm. They aren't simply a law firm they offer a different suite of services. We don't regard them as a huge threat," says a lawyer referring to what was the firm's unique selling point, that they offer the full range of fund services, until fellow offshore firm Walkers launched in Dublin.

Lawyers also like to downplay Maple's impact and suggest the mandates the firm has won from rivals has been as a result of pricing.

However this is an opinion and whatever the reasons, when looking at the objective figures, competitors admit the firm is gaining market share: "It's about five years now and I think they've done fine. When they first came in people would have predicted their demise within the first couple of years and it clearly hasn't happened," says one peer. "When we check the incorporations and SUVs each month, Maples gets their fair share and you can't deny that they're successful."

No one refutes that the practice offers standards befitting the second tier but, despite commentators recognising head of practice Barry McGrath as a reputable figure in the industry, the consensus is that the practice does not yet have the strength in depth. However if it continues to progress so positively it will invariably continue it's upwards trajectory.

Practice head McGrath has closed two notable QIFs (qualified investment funds) in the last 12 months. Acting for new client Sanlam Asset Management he advised on the moving first suite of BVI offshore funds onshore under the new re-domiciliation legislation in January 2011 in addition to advising Lighthouse Investment Partners on establishing a multi-manager unit trust QIF in December 2010.

Relative new boy to the firm, Stapleton assisted in creating a suite of Managed Account QIFs for French asset management firm, Amundi Group. The initial wave closed in September 2010 with further ongoing waves in October. Stapleton also acted for Boussard & Gavaudan Asset Management in domiciling it's previously Cayman-based Hedge Fund into an on-shore jurisdiction.

Head of McCann FitzGerald's investment management group, Mark White, elicits positive responses from commentators, who consider him a leading individual at the firm and within the funds arena. The top tier still eludes the firm, however as is it is perceived to lack the number of experienced lawyers requisite for this category. "I have a lot of high regard for Mark White but McCann's is a very small practice and I don't think they are as strong as some firms that have more dedicated funds partners who have more experience than say McCann's has," says one partner.

The firm has secured several notable ongoing mandates and White is at the helm on all of them. The team was appointed as project manager and legal advisers to HFR's umbrella QIF (qualified investment fund) and Ucits (undertakings for collective investment in transferable securities) fund, which are established as a unit trust and a self-managed investment company, respectively. Intended for clients and investors who need a product domiciled and regulated in the EU, the QIF was launched with two initial sub-funds and the Ucits was launched with one.

Acting for Global Spectrum, a Cayman exempted company, and its investment adviser, III Offshore Fund Advisors, the firm have been advising on domiciling the fund in Ireland, under the new measures that were introduced into Irish Law in 2010 which enables a fund to move onshore by way of continuation as an Irish investment company authorised by the Central Bank of Ireland.

In other notable deals, White advised PGGM investment management on establishing an Irish fund of funds platform managed by Lyxor, the asset management group of French bank Société Générale, and he continued to advise on the JO Hambro managed Dublin Ucits umbrella and launched the OHCM All Europe Dynamic Growth Fund in February 2011.

A client of Darragh Murphy, who was promoted to partner in 2010, could not fault the firm in any area, saying: "Technical capabilities are fantastic, no issues whatsoever. They've been incredibly valuable they are very commercial minded so that they raise the technical issues but in a way that can move the business forward and get transactions done."

William Fry maintains its position after completing several notable mandates and receiving unanimously positive feedback from clients. Although questions were raised about staff turnover and the affect of external pressures on the firm by competitors, clients still regard the firm as a good place to go.

The firm is viewed as a specialist in the ETF (exchange-traded fund) field by commentators: "They are a very, very good firm. I think they pretty much act for all the ETFs domiciled out of Ireland so they are kind of experts in that area and that's why we use them exclusively," remarks one client. On that side, Tara O'Reilly led the team advising iShares on the establishment of its first physically backed Exchange Traded Commodities (ETCs) programme, providing investors exposure to four precious metals; gold, silver, platinum and palladium. O'Reilly receives positive reviews from both clients and peers: "Tyra O'Reilly is certainly well respected and good by reputation," says one lawyer.

Partner Cormac Commins has also been active. He advised Institutional Cash Series (ICS), a money market fund with assets under management (AUM) of $35 billion on the transition to a new administrator and custodian, which set the foundations for the merger of ICS with BlackRock Cash Selection Funds to create a combined cash fund with over $70 billion in AUM. Commins also acted for Artisan Partners, US based Investment Manager with $50 billion of assets under its guidance, on the establishment of a Ucits (undertakings for collective investment in transferable securities) platform with a series of international and emerging market equity funds within it.

In June 2010 Mason Hayes & Curran's funds practice was boosted by the hire of new partner Mark Browne from Maples and Calder's Cayman office.

Competitors are quick to comment that there is a large divide between the market share and experience of the second and third tier firms but having said that Mason Hayes secured some slick mandates in 2010 and 2011.

Practice head Fionan Breathnach and Browne together closed two notable transactions, advising Horizon Global Advisers on converting its Umbrella Fund from a QIF to a UCITS in October 2010, and acting for Yacktman Asset Management on the establishment of a new sub-fund on the Heptagon Fund UCITS platform in November 2010.

Encouraged by the success of fellow offshore firm Maples and Calder, Walkers launched an investment funds practice in Dublin in January 2011. The firm poached three partners from Matheson Ormsby Prentice, including the now head of Walkers' funds practice Paul Farrell.

It is deemed too early to comment on the firm's progress say most commentators and there is a consensus that the firm has not invested the funds to the same extent that Maples did. But with the Irish funds industry as buoyant as it is, the firm is tipped as the next offshore success story.