Ireland will be one of the "biggest beneficiaries" from Brexit if it can attract top asset management firms to locate here, according to the founder and former CEO of Aberdeen Asset Management.
Addressing a PwC webinar about Ireland’s potential as a leading location for asset management and financial technology — or fintech — firms, Martin Gilbert said further consolidation in the industry is expected and that it will play a key role in refinancing the global economy following the Covid-19 pandemic and alleviating pressure on government debt.
“Ireland has so many advantages — including very talented people with language skills — and has a terrific future as a world-class centre for funds management,” Mr Gilbert said.
“While Ireland, to date, has done very well as a fund administration and processing centre, it needs to work out how to attract asset managers to locate here, so funds can be managed directly from Ireland,” he said, adding that if it does that then “Ireland will be one of the biggest beneficiaries from Brexit”.
A survey by PwC, coinciding with the webinar, has found that global asset management and fintech firms will increasingly look to Ireland when growing their international operations over the next 12 months, even as the economy worsens in the face of the ongoing Covid-19 crisis.
It found that 67% of respondents — all global asset managers — plan to increase their presence in Ireland or relocate key activities here inside the next 12 months.
Over 170 asset management and fintech firms have chosen Ireland as a location in the past two years, potentially creating over 6,000 jobs, according to PwC’s Andrew O’Callaghan.
“Ireland has a significant opportunity to be a leading asset management centre, particularly for high value funds and fintech activity, in a post-Brexit world,” he said.
“The advantages are clear: highly talented individuals having deep industry knowledge, well established regional hubs, continued access to the EU market, and a similar common law jurisdiction as the UK with the benefits of the Common Travel Area between the two jurisdictions,” Mr O’Callaghan said.
The findings come against latest forecasts for a near 4% drop in the Irish economy this year.
EY said it now sees GDP falling by 3.9% this year, with the “twin challenges” of Covid-19 and Brexit reshaping the economy.
However, EY also said that it expects Irish GDP to grow by as much as 3.5% next year. Last month, the Department of Finance said it is anticipating a 2.5% fall in GDP this year and only a 1.4% increase next year.
“The pace of the consumer rebound in late summer was leading to an upward revision of the forecasts across the island but tightening restrictions and new levels of anxiety and concern have edged the projections downwards again,” said EY Ireland chief economist Neil Gibson.
Ibec recently said it sees GDP falling by 2.6% this year, but rising by 3.1% in 2021.