Despite the perception that Ireland’s funds industry is concentrated in a small area in Dublin’s docklands, it enjoys a strong regional presence as well. With recent reports suggesting that up to 6,000 new jobs will be created in the Irish funds industry over the next five years, those in the know believe that many of these will be in cities and towns around Ireland, and not just concentrated in the capital.
Chief technologist at Skillnet Ireland, Mark Jordan, says that Ireland has “positioned itself uniquely” as being a strong regulator and a very open economy in terms of opportunities. Jordan’s belief is that “80-85 per cent” of global asset managers have domiciled their funds in Ireland and are subsequently building out their back offices here.
“Traditionally, Dublin was the place where they were going; Fidelity Investments, Black Rock and Northern Trust, for example, all came to Dublin first,” he says. “But as they’ve expanded and linked in with the higher education sector and the various universities around the country, they’ve seen the talent coming through and the types of programmes that lean themselves towards tech development, change management and transformation.”
Remote workforce
As a result, Cork, Wexford, Letterkenny and Limerick, among others, have all become places where companies have “doubled down” and grown their presence. This is only the start of it, says Jordan.
“I do think that we are going to see more of it, especially with the growth of the remote workforce. These centres scale better and are more cost-effective as they continue to grow.”
Jordan also points out that funds is one area within the financial sector that is particularly suited to diverse locations. “What’s different about the funds industry is that you don’t have to be physically close to the front office in order to grow the back office. It’s not real-time pricing – as funds are priced at the end of the day, after the markets close, the need to be close to the time zone and close to the market is not as prevalent in the funds industry as it might be in the capital markets industry, for example.”
There are several examples of large international financial organisations with major regional operations. Northern Trust, with its bases in Dublin and Limerick, benefits from the strong graduate cohort streaming out of University of Limerick every year, Jordan notes. Fidelity Investments has a large base in Dublin but also a substantial one in Galway, and Jordan predicts that it will continue to grow this. He says this is similar to how the funds industry has evolved in the United States.
Regional locations
“There you find that you have the front office in New York City but the back office and administrative support is in the mid-west or the west coast, so you don’t have to have the expense of the east coast. The same applies here – a lot of these back offices and support organisations can be in regional locations because the talent is there and now more and more people are looking to be located rurally or at least outside the capital, and I can see that continuing to grow.”
The coronavirus pandemic has catalysed this trend, and with many employees being told they can work from home for the long term or even indefinitely, the exodus from Dublin will continue, Jordan says. Cities and towns across Ireland will reap the benefits.
“Big companies have also figured out how to have remote employees interface with their operations without being in a bricks and mortar office in the middle of town. All of this adds up to a freedom from the dependencies of Dublin and all of the constraints around housing etc., so people can easily relocate and get good jobs elsewhere, or even work remotely. That will be the movement going forward.”