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Wednesday, 16th July 2025 |
| Irish brokers compare well with peers |
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| The quality of the research on offer from Irish stockbrokers compares favourably with research received from international investment bankers Ruth O'Briain, managing director of F&C Ireland, and chair of the Irish Association of Investment Managers tells FINANCE. |
Q. What is the biggest challenge in your industry at the moment?
A. The biggest challenge to pension fund management is the current ‘pension crisis’ and the structuring of products to ensure that pensions funds can meet future liabilities.
Profitability of fund management companies is also a challenge given the poor returns from markets in recent years, together with the higher cost base and increased compliance load being placed on local market participants.
Q. Has the growth in hedge funds impacted on your investment strategy? If so, how?
A. At F&C we believe that hedge funds may be used as either a defensive or offensive strategy. We recognised the growing importance of this asset class and realised that much of the demand for hedge funds would come from the institutional community. We have already launched a number of hedge funds and our aim is to build a range of hedge funds attractive enough to cater for different sectors of the market.
In Ireland we are seeing a growing desire from trustees to understand hedge funds and the part they can play in their portfolios. Should they choose to invest some monies in this asset class our intention is to offer relevant product in this area. At this point in time hedge funds are not included as a core holding in the Friends First/F&C Managed Pension fund, therefore this asset class has not yet impacted our core investment strategy for pension clients. However this decision is under review.
Q. How do Irish stockbroking firms compare to their international counter-parts?
A. Our experience in this regard relates exclusively to research on Irish equities. Not surprisingly Irish stockbrokers devote very significant resources to Irish equity research. Generally Irish analysts have long standing relationships with the companies they cover. This can be a double-edged sword in terms of objectivity. Over the past decade foreign ownership of the Irish equity market has increased dramatically and now stands at about 60 per cent. Irish stockbrokers have played a leading role in this process. It would not have been possible for them to achieve this without a research product that measures up to the best international standards. Certainly from our perspective the quality of the research we get from Irish stockbrokers compares favourably with research received from international investment bankers.
Q. Do you feel that research has become more objective over the past number of years?
A. We do not believe that the research done by investment banks has become more objective. There will often remain an underlying residual bias within the written report.
At F&C our focus has always been on in-house research, supplemented by external research. We are very much focussed on identifying the long term fundamentals of the companies we invest in and our own research is and always has been the key driver of our investment decisions and portfolio construction. The recent merger with ISIS has enhanced our resources in the research area. |
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