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Domiciling a Hedge Fund - Ireland and the ICAV: a guide for first-time managers

Domiciling a Hedge Fund - Ireland and the ICAV: a guide for first-time managers
  • United Kingdom
  • Ireland
  • Financial services and markets regulation
  • Financial services and markets regulation - Hedge funds
  • Financial services


The Republic of Ireland is currently regarded as one of the world’s key financial centres. Cultural ties with the UK and the US, EU membership, a ready supply of service providers and a common law system have established Ireland’s reputation as a trans-Atlantic hub.

Ireland offers fund managers a variety of collective investment vehicles to choose from, but in recent years one of the most popular has been the ICAV.

Here is how you get to grips with it.


The Irish Collective Asset Management Vehicle (“ICAV”), is a sub-category of alternative investment fund (“AIF”), a broad regulatory category created by the EU’s Alternative Investment Fund Managers Directive (“AIFMD”). AIFMD compliance comes with its own challenges (as we discuss here), but compliance grants a fund passporting rights throughout the EU.

So what distinguishes an ICAV? ICAVs are a uniquely tailored vehicle: they are structured as corporations, while being exempted from many of the restrictions that normally come with company law. In other trade sectors annual meetings are compulsory and any changes to constitutional documents require shareholder approval. Neither rule applies to the ICAV.

The malleable nature of the ICAV particularly appeals to US investors, who like the guarantees offered by a regulated corporate structure but wish to avoid funds that are subject to tax penalties under the US Passive Foreign Investment Corporation regime. The ICAV offers both and US investors are taxed as if they held direct stakes in the fund’s underlying assets.

A further quirk of the vehicle is that each sub-fund in an ICAV umbrella structure issues its own financial statement. Significantly, these statements are not obliged to use the same accounting standard. US GAAP, Irish GAAP, IFRS: all these standards and more can be used by different sub-funds within the ICAV. Since it is only necessary to send each investor relevant sub-fund accounts, ICAVs make ideal AIF platforms.

The Requirements

Of course, not every AIFMD authorised fund qualifies for ICAV status. To be counted as an ICAV, a fund must secure the services of an Irish-resident Depositary and Administrator. Two of the Directors must also be Irish residents. There is no equivalent obligation for an Irish alternative investment fund manager (“AIFM”), but non-Irish residents will have to qualify as ‘full scope’ AIFMs to operate on a cross-border basis. First-time fund managers may want to consider using third party AIFM ‘hosts’ to avoid these requirements (you can find out what this entails here).

Assuming optimum timing, an ICAV can be taken from inception to application for Central Bank of Ireland authorisation in as little as eight weeks. Once the authorisation is granted, an ICAV can begin accepting money within days.

How Eversheds Sutherland can help

Our team has been at the forefront of regulatory interpretation and product development for the fund management industry since the 1980s. We advise on all types of fund structures and prepare all documentation necessary to achieve a successful fund launch.