Key benefits of using Irish Collective Asset-management vehicles

Shortly after the enactment (Feb/March 2015) of the Irish Collective Asset-management Vehicle Bill 2014 (the “Bill”) and innovative investment vehicle called an Irish Collective Asset-Management Vehicle (“ICAV”) will be made available. ICAVs are tailor made corporate fund vehicles for both UCITs and AIFs which provide a pro-active approach to meeting the evolving needs of fund promoters. In particular, some of their key functions and benefits are as follows:

  • They are subject to their own legislative regime to ensure that they are distinguished from other companies.
  • The Central Bank is responsible for registration and authorisation of ICAVs.
  • ICAVs may be established as umbrella structures with a number of different sub-funds and share classes. They could also be listed on a stock exchange.
  • ICAVs will have an Instrument of Incorporation (“IOI”) instead of a memorandum and articles of association in order to be further distinguished from existing investment companies.
  • Where changes are to be made to the IOI there is no legislative requirement to obtain prior investor approval. The Central Bank is excepted to not have any such requirements either, given that the changes do not prejudice investor interests.
  • ICAVs will have board of directors with a minimum requirement of 2.
  • ICAVs may be either self-managed or managed by an external management company.
  • Current investment company requirements will also apply to ICAVs.
  • It will be possible to prepare accounts per each individual sub-fund. This will result in reduced costs and time spent by managers on compiling accounts which are to be provided to shareholders.
  • Existing funds will be able to convert to an ICAV status. There will also be provisions in the Bill for ICAV mergers and for migration of funds domiciled outside of Ireland into ICAVs by continuation.
  • As ICAVs are bespoke corporate investment vehicles they will not be impacted by certain amendments to EU and domestic legislation.
  • ICAVs are able to elect their own classification under US check-the-box taxation rules. Current Irish investment companies are not eligible to do so.

Should you require any further advice or information on ICAVs, Cleveland & Co, your external in-house counsel, are here to help.

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