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Tuesday, 23rd April 2024
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ABS asset management sector is set to double Back  
Ireland’s securitisation sector is set to double over the coming year, delegates at the Fifth Annual Finance Dublin International Securitisation Conference held on November 28th and 29th, were told.
Ireland’s emergence as one of Europe’s leading securitisation centres is set to continue in 2007, leading players predicted at the Finance Dublin securitisation conference on the 28th and 29th of November. A prediction that the Irish ABS asset management sector is set to double in the next twelve to eighteen months was made by Deirdre Somers, director of listing at the Irish Stock Exchange, and chair of the Irish Securitisation Forum. She forecast that assets under management would rise to €200 billion in the next twelve months.

Somers says that what makes the Irish securitisation sector so unique is its key role in four areas: asset management, administration, as a listing centre and the growth in Irish origination. Somers sees that ISE is now, ‘the stock exchange of choice’ for the asset backed market. Seventy per cent of euro centric deals on any asset backed issuance issued out of Europe to predominantly euro investors are listed on the ISE. Somers predicts that listings will increase by twenty to thirty per cent in the next year.

As an administration centre, Ireland is the largest SPV domicile in the EU, and there has also been an increase in allied service provision in trustee and administration services. Somers says there has been increased Irish origination with the first CMBS deal, first non-conforming and increased RMBS issuance and CDOs over the past year.
These predictions for the coming year for the industry were also identified by Dermot Hardy, head of treasury at Aareal Bank AG, Dublin Branch. Hardy estimates that the current securitisation investor base is roughly €80 billion to €100 billion, and he foresees that the sector is set to double in the next twelve to eighteen months.

Hardy sees that the European market is set for a period of growth and with Ireland as the leading light of the eurozone Dublin is set to be at the forefront of this growth. Hardy predicts that because the European market has yet to develop in the same way that the US debt securities market has in its relationship with GDP. The US model where the market is two times GDP and in Europe it is only one and half times. Europe therefore has great potential to create a market where the numbers between GDP and size of investment are closer to that realised in the US. The European market has also yet to experience the full weight of dis-intermediation. In Europe the ‘banks make up the lion’s share of investment, whereas in the US there are ‘more and more non-banks’ active in the debt market.

Hardy believes that Ireland is the most suitably positioned jurisdiction within the Eurozone to benefit from this growth in the sector, and that the ‘management of ABS portfolios is a major opportunity for Ireland inc.’ because of the advantages that Ireland offers the global market.

Hardy says that the concentrated nature of the Irish market in Dublin has led to it being developed as a hub, and it has enjoyed the effects of clustering such as an established skill base since the mid- nineties. Moreover, public sector support has been notable, consistently offering fiscal, legislative and regulatory assistance to the sector. These include section 110; no fees on collateral managers fees; exemption of stamp duty on transfer debt.

The recognition of Ireland’s position in the market is consistently backed up by new start-ups and companies moving their operations here. Somers said that it is, ‘gratifying that a steady stream of new start-ups, such as Wachovia, U.S. Bank Corp, Guggenheim, La Salle, have chosen Ireland for their operations.

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