US market shifts challenge Ireland's growing PE sector

Ireland’s fund domiciliation and private equity sectors are booming, driven by innovative structures like the Investment Limited Partnership (ILP).

By early 2025, assets under management in Irish-domiciled funds exceeded €5 trillion, closely rivalling jurisdictions like Luxembourg. Oisin McClenaghan, partner in Ogier's Investment Funds team, predicts that Ireland is set to become Europe’s largest fund domicile as soon as 2027 or 2028, fuelled by a 22% year-on-year rise in 2024 and growing interest from UK, US and Nordic private equity managers.

Private equity activity is similarly robust. In 2024, PE-related deals more than doubled to 74 and total investment soared to €16.4 billion, buoyed by major transactions and strong mid-market activity.

This year, healthcare and industrials lead by value, with business services, energy and technology also performing well. The sector’s sustainability is underpinned by Ireland’s resilient economy, small and medium-sized enterprise (SME) growth and a 33% population increase over two decades.

Cautious debt-to-equity management, lessons from the 2008 crash, steady government and active regulatory engagement have all contributed to stability. However, there are concerns that rapid growth could risk repeating the so-called "Celtic Tiger" volatility of the past. Ireland’s reliance on foreign investment and sensitivity to global shifts, especially in areas like environmental, social and governance (ESG) and supply chain, are ongoing challenges.

Nevertheless, Ireland’s adaptability, innovation and renewed focus on retaining investment within Europe position it well to weather uncertainty. Creative strategies and resilient regional investments are expected to support continued, sustainable growth in a shifting economic landscape.

Read the full article published by Real Deals.

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