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Is the Irish Common Contractual Fund (CCF) the best kept secret in institutional investing?

, Aaron Overy

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Is the Irish Common Contractual Fund (CCF) the best kept secret in institutional investing?

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You might have heard of Common Contractual Funds (CCFs) but are you aware of the benefits they offer professional investors? 

 

If not, you are not alone. It seems that many trustees and institutional managers still don’t appreciate the scale of the CCF market or the tax transparency, performance and governance advantages that CCFs deliver, particularly for tax exempt investors.


CCFs have been around since 2003, when Ireland introduced them under the UCITS regulations. Since then they have grown in popularity with both niche investors and some big name managers, like Blackrock, LGIM and Vanguard, with clients from multiple jurisdictions who are looking for tax transparent investment structures.

 

Three key reasons for considering CCFs

 

There are three key reasons why institutional investors should consider CCFs for their portfolio: tax efficiency, good governance and economies of scale. The tax transparency of CCFs means that tax exempt investors do not have to pay unnecessary withholding tax (WHT) on dividends. This in turn helps improve underlying investment performance by reducing the tax drag on portfolios. Trustees can therefore demonstrate that they are acting in the best interests of their beneficiaries by reducing costs, managing tax risks and optimising returns. Because AMX can identify the beneficial owners in our CCFs, we are able to provide the evidence you need to justify appropriate tax refund claims to tax authorities. You can also demonstrate that you have clear procedures and processes to support the tax and investment decisions you take on behalf of your clients.

 

Finally, investment managers of pension schemes can reduce administrative costs by consolidating their pension fund clients into one CCF, so giving them a competitive advantage. We have written extensively about the benefits for CCFs for a range of investors, including Pension Funds, Life Insurance Companies and Sovereign Wealth Funds. This compendium provides links to all our CCF-related content with a short summary of each to make it easy for you to find the most relevant information. Please let us know if you have any further questions and we will seek to address them in person or in updates to this compendium.

 

The case for CCFs


Watch Aaron Overy, Head of Platform Solutions, give a brief overview of the benefits of CCFs, from tax transparency to reduced complexity and increased access to a range of mandates.
 

Using tax transparent funds to improve investment efficiency

 

Download our report on how institutional investors are using tax transparent funds to improve efficiency. 

 

Case studies

 

  • Find out how Metropolis Capital uses its pooled AMX CCF fund and the AMX ecosystem to improve efficiencies, reduce fees, and create value for its investors.
     
  • See how Veritas Asset Management used the AMX platform to reduce the cost and complexity of setting up a CCF that could offer tax advantages to pension fund clients of all sizes.
     
  • Discover why Storebrand worked with AMX to launch a CCF in order to reduce performance drag for investors, and to deliver world class strategies for clients who want their investments managed in a sustainable way. 
     
  • Learn how Maple-Brown Abbott responded to the needs of their pension fund clients by launching a CCF on the AMX platform. By working with AMX, Maple-Brown Abbott could focus on managing investment ideas while AMX handled the end-to-end implementation.

 

Articles

 

 

European Pensions podcast: ‘The Power of Three’ 

 

In this 10-minute podcast, European Pensions Editor, Natalie Tuck, talks to AMX’s Head of Platform Solutions, Aaron Overy, and our Product Tax Specialist, Kevin Duggan. Together they discuss three options to help institutional investors ensure good withholding tax outcomes for their funds. These include looking through the fund to see what tax treaties apply to the end investor, looking at fund level relief and looking at how and when to apply Section 892. If you prefer reading, check out the transcript on page 32 of this digital edition of European Pensions. 

 

Hedgeweek Podcast: ‘CCFs - The ecosystem solution for managing cost and tax efficiency’

 

Creating great investment outcomes requires investors, asset managers, consultants, and service partners to come together and collaborate. Too often the complexity and inefficient processes of our industry become a barrier to both innovation and the completion of routine investment operations. Our podcast with Hedgeweek explains more.

 

 

 

 

This material is for general informational purposes only and should not be considered a substitute for specific professional advice. In particular its contents are not intended to be construed as the provision of investment, legal, accounting, tax or other professional advice or recommendations of any kind, or to form the basis of any decision to do or to refrain from doing anything. This material should not be relied upon for investment or other financial decisions and no such decisions should be taken on the basis of its contents without seeking specific advice. 

 

The Asset Management Exchange CCF (the “Fund”) is an umbrella Common Contractual Fund, authorised by the Central Bank of Ireland as a Qualifying Investor Alternative Investment Fund pursuant to the Investment Funds, Companies and Miscellaneous Provisions Act 2005, as amended. The authorised Alternative Investment Fund Manager of the Fund is AMX Ireland. AMX UK is appointed as a Distributor. The Asset Management Exchange UCITS CCF (the “Fund”) is an umbrella Common Contractual Fund, authorised as a UCITS by the Central Bank of Ireland pursuant to the European Communities (Undertakings for Collective Investment in Transferable Securities) Regulations 2011, as amended.  The management company of the Fund is AMX Ireland. AMX UK is appointed as a Distributor.

 

CCFs are not open to US investors and this material is not suitable for US persons. 

 

The value of all investments and the income from them can go down as well as up. Past performance is not a reliable indicator of future returns.  


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