Ireland is a leading jurisdiction for the global investment funds industry. At the end of February 2025, over €4.5 trillion of net assets were held in almost 9,000 Irish domiciled funds (including sub-funds), representing a 22% annual asset growth. Ireland offers a range of fund vehicles for promoters to establish fund and feeder fund structures with an Irish domicile. Irish vehicles therefore feature regularly in subscription, net asset value (NAV), hybrid, umbrella and other fund financings.

Before commencing due diligence on an Irish fund or considering the facility and security documents, it is crucial first to understand the type of Irish vehicle that is involved in the financing and, furthermore, whether the vehicle is a regulated or unregulated fund.

Regulated fund structures

The Central Bank of Ireland (CBI) is responsible for the authorisation and regulation of investment funds and investment managers in Ireland. The most common Irish regulated fund structures encountered in fund financings are:

Irish collective asset-management vehicles (ICAV)

ICAVs are incorporated under the Irish Collective Asset-management Vehicles Act 2015 (as amended) and have a bespoke corporate structure which makes the ICAV a popular choice of fund vehicle. Investors in an ICAV subscribe for shares and become shareholders in the ICAV.

Investment limited partnerships (ILP)

ILPs are constituted under the Investment Limited Partnership Act 1994 (as amended) (the ILP Act) as a partnership (without separate legal personality from its partners) and are gaining popularity in Ireland following recent amendments to the ILP Act, as further explored below. The general partner of the ILP is responsible for the management of the ILP and the investors in an ILP subscribe for partnership interests as limited partners with the benefit of limited liability.

Variable capital investment companies (Investment Companies)

Investment Companies are incorporated as a public limited company under the Companies Act 2014 (as amended). Although Investment Companies are still commonly encountered in Ireland, the Investment Company has been superseded by the ICAV and the ILP as the vehicle of choice for newly established funds.

Following the introduction of the ICAV in 2015, the ICAV overtook other fund structures to become the most common Irish fund vehicle encountered in fund finance transactions. ILPs are also gaining in popularity following the enactment of the Investment Limited Partnerships (Amendment) Act 2020, which modernised and amended the ILP Act to bring the ILP in line with comparable partnership structures in other leading fund jurisdictions. ILPs offer an attractive option to promoters who favour a partnership structure over the corporate structure of an ICAV.

Other regulated structures in Ireland include Unit Trusts, which are constituted under a trust deed with a trustee (who holds legal title to the fund’s assets) and a management company responsible for the management of the fund), and Common Contractual Funds. These are unincorporated bodies established under contract law, providing investors with certain rights as co-owners of the fund’s assets. Unit Trusts and Common Contractual Funds are very rarely encountered in fund financing transactions in Ireland.

Irish regulated funds may be established as Alternative Investment Funds (AIF) under the EU (Alternative Investment Fund Managers) Regulations 2013 (as amended), or other than ILPs, which can be established as AIFs only, as Undertakings for the Collective Investment in Transferable Securities (UCITS) under the European Communities (Undertakings for Collective Investment in Transferable Securities) Regulations 2011 (as amended). In fund financing transactions in Ireland, funds and feeder funds with an Irish domicile will commonly be AIFs and, in particular, qualifying investor AIFs (QIAIF). There is a 10% leverage limit for UCITS, and this, coupled with the fact that UCITS may only borrow for temporary purposes, means UCITS are encountered in fund finance transactions less frequently than AIFs.

Regulated funds may be established as standalone funds or take the form of umbrella funds with one or more sub-funds. Irish regulated fund vehicles cannot guarantee the obligations of third parties, including the obligations of other obligors or loan parties under a credit facility (with the key exception that a regulated fund may guarantee the liabilities of its wholly owned subsidiaries). The concept of a “guarantee” in this context is not defined in Irish law, but the consensus is that this prohibition on guaranteeing third-party obligations also prohibits the granting of security in respect of third-party obligations. A further structuring consideration is that, in the context of an umbrella fund, the principle of segregated liability extends to the sub-funds within the umbrella structure, meaning that the assets of one sub-fund cannot be used to guarantee or secure the obligations of another sub-fund in the umbrella, nor other third-party liabilities. These are important points that should be considered – and are sometimes overlooked – when structuring a fund finance transaction with Irish counterparties at the term sheet stage.

Unregulated fund structures

Unregulated fund vehicles are also common in Irish fund financing transactions either as the main fund vehicle or the asset holding vehicle under a regulated fund structure. Unregulated funds are usually incorporated as a designated activity company (DAC) which has been structured to comply with the requirements of section 110 of the Taxes

Consolidation Act 1997 (a Section 110 Company). A Section 110 Company will benefit from a specific tax regime (the details of which are outside the scope of this guide) provided that it satisfies the necessary criteria upon incorporation, and on an ongoing basis, in order to preserve its status.

Although Section 110 Companies are unregulated fund vehicles, if a Section 110 Company is part of a structure including an Irish regulated fund, specific consideration should be given to whether the Section 110 Company will need to comply with the Irish rules and regulations.

Unregulated funds in Ireland may also be established as limited partnerships under the Limited Partnership Act 1907. We are now more frequently encountering unregulated limited partnerships on subscription, NAV, preferred equity and umbrella financings in Ireland.

An earlier version of this excerpt originally appeared in The Working Guide to Fund Finance, published by Brickfield Fund Finance Recruitment.