After five years in the works a new law that will facilitate growth of the Irish funds sector has been passed by the Oireachtas.

The Investment Limited Partnerships (Amendment) Act 2020, once signed into law, will bring Irish practice into line with other jurisdictions. 

Existing legislation provided for investment limited partnerships as equity investment vehicles. But if a business joined such a partnership and invested €2m in an investment vehicle worth €100m, it could be liable for losses to the value of the entire €100m.

The new Act changes that, so partners will be liable only for the value of the sum invested.

Irish Funds chief executive Pat Lardner (pictured) said: “Ireland has today reasserted its position as a leading, full-service location for the global funds industry. This is game-changing in terms of Ireland’s global competitiveness and will enable and drive new business and opportunities, as well as retain business which has previously been lost overseas.

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“Importantly, it will stimulate growth, safeguarding and creating jobs across the sector benefiting local communities throughout Ireland and increasing the industry’s Exchequer returns at a critical time for the economy.”

Partnership structures are used to fund long-term capital projects such as investments in renewable energy, energy efficiency, carbon capture and climate transition finance, with the new legislation expected to make Ireland a key global jurisdiction for raising capital for these activities.

According to Invest Europe, annual fundraising in the European private equity space averaged more than €100 billion per year in the last three years. Ireland is expected to achieve a significant market share of up to €20 billion per annum over the coming years, said Lardner, based on its strong position in the wider funds market.

The sector has shown growth of 40% over the past two years, with an additional 119 firms entering or expanding in the market during the Brexit transition. Irish Funds believes that the new regime will particularly appeal to fund promoters and managers from other common law countries such as the US, UK, Hong Kong and Australia. 

At present the sector employs about 16,000 people in Ireland.