The regulated fund product range available in Ireland is due to be significantly enhanced by the introduction of the ICAV and a proposal to introduce loan-originating funds.

Irish Collective Asset-Management Vehicle


It is expected that the new Irish Collective Asset-Management Vehicle ("ICAV") legislation will become law before the end of 2014. The Central Bank expects that it will be ready to accept ICAV applications within two weeks of the legislation being enacted.

What is the ICAV?

The ICAV is a new type of corporate fund which will not be incorporated under the Irish Companies Acts and will not be a public limited company ("plc"). It is a tailor-made fund vehicle.

Key Advantages 

  • it is expected to be able to "check-the-box" to be treated as a transparent entity for US tax purposes, facilitating tax-efficient investment by US investors; 
  • it will offer a more administratively-efficient structure - it will not be obliged to comply with certain company law provisions that apply to trading plcs in Ireland; 
  • it can be established as a UCITS or an Alternative Investment Fund ("AIF"); and 
  • existing UCITS and AIF plcs will be able to convert to ICAVs in a straightforward process.

Loan-Originating Funds


On 28 July 2014, the Central Bank issued a Consultation Paper on the introduction of Irish domiciled Qualifying Alternative Investment Funds ("QIAIFs") that can engage in direct loan origination.

The Regime

This will be the first regime in the EU for regulated loan funds. Such funds will be permitted to derogate from the general prohibition on lending, subject to specific investor protections, leverage, risk-management and reporting rules.

Key Features

  • there must be an authorised Alternative Investment Fund Manager appointed;
  • the fund's business will be limited to the issuance of loans, participations in lending and to operations arising directly therefrom;
  • it is prohibited from originating loans to, inter alia, natural persons or collective investment undertakings; and
  • it will be closed-ended and will only be established for a finite period.


These developments again indicate Ireland's pro-active and innovative approach to facilitating fund products. The ICAV is expected to quickly become the investment fund structure of choice in the EU and will enhance Ireland's competitiveness as the European domicile of choice for investment funds. It will be of particular interest to the US market, particularly for US investors.

Whilst some of the detail remains to be settled in relation to loan originating funds, ultimately it is an important and positive development for the Irish funds industry, responding to the demand for alternative sources of credit in the market.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.