John Bruton, the man at the helm of IFSC Ireland, has been plotting the course of international financial services then, now and into the future, writes Angela Madden.
John Bruton is perhaps as well known for his role as president of the IFSC as he was as Taoiseach and EU Ambassador to the US. However, these roles are inherently interlinked and are crucial to the economic development and promotion of Ireland.
Bruton’s background as leader of our country and European representative to the US means he is known and respected the world over. As IFSC president, he is arguably more visible than ever, leading delegations all around the globe in a bid to spread the word that Ireland is open for business with a flourishing international financial services centre with the ability to provide the much sought after services and solutions required in a changing regulatory and product landscape.
Bruton’s political background cannot be underestimated. In his role as president of the IFSC – as Ireland turns its sights to emerging markets in the Far East – his experience and background is held in the highest esteem and opens the door from the east to the west further enhancing Ireland’s reputation as a centre of excellence for international financial services.
Despite all of this, Bruton remains affable, accessible and accommodating to all on his travels. He has a very good memory and believes that it is important to not only acknowledge but also remember the past because, “knowing where we come from shapes where we want to go and how we get there.”
He also believes that self-belief is essential and something Ireland has in abundance; most visible in its vibrant international financial services centre built from scratch 25 years ago this year.
“Ireland has shown that when our back is to the wall we come up with the best of ideas, and have the ability to turn those ideas into reality,” Bruton says.
The success of the IFSC is testament to this character. This initiative, borne out of economic frustration in the 1980s, phenomenal and unequivocally demonstrates that when Ireland faces a challenge it does so with innovation and vision, and we will continue to do so.”
When pressed as to why Ireland and its international financial services centre has been so successful, as a leader on the world stage, Bruton says the answer is easy: “Without a doubt, it’s our people.”
According to Bruton: “I can say with ease, that it is our people with their expertise and professional, can-do, pragmatic approach that makes the difference and it is our talent and expertise that makes us stand out. Now we have 25 years experience in international financial services, we can say Ireland has the knowledge, the know how and the work ethic to deliver on what is asked of us.”
Bruton says that the people employed in international financial services are a key asset IFSC Ireland markets around the globe as well as the plethora of international companies which have selected Ireland as international hubs.
“We also highlight the depth of the IFSC,” he explains. “What I mean by that is its size and also the breath of what is embraced. For example, the IFSC encompasses more than 500 firms, directly employs more than 30,000 people, is the world’s number one alternative funds centre, is host to half of the world’s top 50 banks and host to half of the globe’s top 20 insurance companies. It also is home to one of the world’s oldest stock exchanges – number one in the world for the listing of alternative funds and lines, and is the largest centre for aircraft leasing outside the US.”
Bruton points out that the largest stakeholder in the IFSC is the funds industry which today services an all-time high of €2 trillion in assets.
“2011 was yet another milestone year for the funds industry with assets of Irish domiciled investment funds reaching a record high passing the €1trn mark at the end of 2011 – up 40% from the end of 2009.
“Perhaps even more impressive is the fact that during the year, Ireland attracted twice as much in new UCITS monies as the rest of Europe put together. Think about that; that is a real achievement, particularly when you consider most major European domiciles faced significant outflows.”
Bruton also points out that IFSC Ireland was established in September 2010 to provide a common marketing platform to promote Ireland both at home and abroad as a world class centre for internationally traded financial services. “I think the story we have to tell and are telling reflects that mandate,” he says.
However, Bruton also acknowledges that the domestic banking crisis has had an negative impact on the perception of Ireland. He explains: “In reality the domestic situation has nothing really to do with the international business which has experienced all-time highs in terms of funds under administration, exports and foreign inward investment. Our international business has never been better. “
The perception of Ireland has been temporarily affected by the domestic banking crisis, but according to Bruton that is changing as there is more awareness around the fact that there is in reality two economies at operation in Ireland – the domestic and international – running parallel to one another. “I hope that the marketing efforts of IFSC Ireland are going, at least some way to highlight these facts.”
Not one to be content with today’s successes, Bruton, stresses that it is key to look ahead to new growth areas for the IFSC. “We must look to the next 25 years as our international financial services centre is a national asset, both for the government and for the people, and it is increasingly growing in importance to our economy at large.”He adds: “What is vital is that we constantly evolve in order to continue to provide the solutions required from companies operating in international financial services around the globe and that IFSC Ireland promotes Ireland’s expertise in mainstream international financial services and new niche markets.
Therefore, as well as striving to maintain and build upon the activities already here, Bruton also warns we must look to new markets and new opportunities with ‘green’ and Shariah finance two areas the government and industry has targeted for growth into the future. He points out that while both would benefit many sectors within the international financial services centre, it stood to reason that the largest stakeholder, the funds industry would benefit most.
Outside the Middle East, Ireland accounts for 20% of Islamic finance making it the number one European jurisdiction for this business, according to figures from PWC. “While this sector may not have grown as quickly as expected, we know it will provide huge opportunities in the coming years. For example, the recent news that Ireland has attracted its first Malaysian fund promoter, CIMB Principal Islamic, which has launched a range of Irish UCITS funds, demonstrates that the domicile is growing in stature as an Islamic funds centre.”
Ireland has demonstrated that it is home to a rapidly growing world class funds management green hub where some $10 billion in green funds is managed, domiciled or serviced from Ireland. Assets managed in green funds from Ireland total €2.3bn, up 100% in the past year and 200% in the past four.”
Bruton says it is worth stressing that Ireland’s robust regulation in international financial services had stood it in good stead. “We are fortunate in Ireland to have an open, transparent economy with robust regulation. We can see that as a result of various financial episodes and scandals, that the world is now moving to a robust regulatory model. Ireland stands to gain in this environment.”
According to Bruton, Ireland has a history of sharing information with other domiciles and so would be able to adapt to new global tax legislation such as the new FATCA laws in the United States.
“As for the Alternative Investment Fund Managers Directive (AIFMD), Ireland is in pole position to benefit with its tried and tested Qualified Investor Fund (QIF) which is already compliant with the majority of the directive, making it an easy solution for fund managers.”
Certainly, the surge in demand for the QIF would seem to back this up with recent figures from the Central Bank of Ireland showing that the product is at record highs in terms of both assets and number of funds.
But Bruton warns that it is important that Ireland remains a country that is an attractive location for business to conduct international financial services from. “We will only continue to be successful in international financial services as long as we provide the solutions required of us and deliver them in a cost competitive and efficient manner. It is imperative that we maintain our status and our reputation as one of the best places in the world to do business.”
Some might wonder what would attract a former Taoiseach and EU Ambassador to the US to take up the role of president of IFSC Ireland at a time when the organisation was brand new with an unknown future. “Seeing how the various organisations and associations operating in international financial services were coming together to create a joint marketing message and coordinate promotional activity worldwide, made the decision to take up this position easy. It is exactly this kind of collaborative thinking and sharing of information and key messages which best serves to promote Ireland. It serves to promote Ireland both as a location for international financial services generally and, specifically, for the sectoral parts of the IFSC from funds, insurance, banking, asset management, aircraft leasing and the stock exchange. Working together, saying the same thing, knowing what each of the others has achieved can only serve to strengthen Ireland’s proposition as a location for international financial services as we all endeavour to promote the domicile. I feel truly privileged to be on this journey with IFSC Ireland as its president.”
Having led IFSC Ireland, which has completed close to 100 engagements at home and abroad and in countries and regions as diverse as The United Arab Emirates, New York, Boston, Chicago, London, Paris, Frankfurt, Chile, Brazil, China, Tokyo, Hong Kong, Kuala Lumper and Singapore (to name only a few), it is fair to say that it is the international financial services centre and IFSC Ireland who are privileged to have John Bruton at the helm, setting the course for the future.