Of the fund promoters that do not have a physical presence in Ireland, many have established their own Irish registered management companies in the IFSC.
The day to day activities of these management companies are generally delegated to IFSC fund administration companies, thereby enabling the management company to avoid the need to rent office space or employ staff directly.
There are a number of reasons why a promoter may wish to establish its own management company, including:-
- If the fund is to be established as a unit trust, a management company will be required as an integral part of the fund's structure and will be a signatory to the trust deed constituting the fund.
- Where the requirement for a management company is not obligatory, for example, where the Fund is established as an investment company with variable capital, the use of a management company may still be helpful as it can act as the central co-ordinator of service providers on behalf of the fund Company. Under such an arrangement, the fund will delegate all management activities to the management company which will then appoint different service providers.
The Central Bank imposes certain supervisory conditions on both Management Companies and Fund Administration Companies. These conditions include:-
- A minimum capital requirement of EUR125,000 or three months expenditure, whichever is the greater.
- A minimum of two directors of the company must be Irish residents and any appointments to the office of director require the prior approval of the Central Bank.
- The board of directors of the company should not have directors in common with the board of directors of the trustee or custodian of any scheme for which it acts.
- Annual audited accounts and semi-annual unaudited accounts must be submitted to the Central Bank.