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IPS152 Giovanna B. et al.

This example highlights the challenges that SPE structures pose to
compilers of international accounts for identifying the residency of the
controller. For this specific investment-fund linked structure, the sponsor (i.e.
the foreign fund manager) is the entity that exerts control. However, should
we consider the Irish investment fund as the owner, the SPE would be
classified as domestically controlled and thus consolidated into the fund. As
in the previous case, the analysis of the data for the entire sub-set of
investment fund linked SPEs shows no clear difference in the balance sheet
composition of foreign and domestically owned entities, suggesting that
capturing this feature may limit the scope of the definition.
In Q4 2018, 233 SPVs (€83.5 billion) representing more than 34 percent of
4
the total asset value, were classified as investment fund linked . Only 32 SPEs
were set up by Irish entities (€6.8 billion). Sponsors tend to be UK and US fund
managers. 103 SPEs (€39 billion) reported as being consolidated into a group
and provided information on the ultimate parent. In contrast to the previous
case, the ultimate parent and the sponsor are very likely to be two different
entities. Foreign fund managers are the sponsors, while Irish investment funds
are the ultimate parent. Looking at their portfolio composition, we find that
on average 66 percent of their assets and 32 percent of their liabilities are
foreign. Figure 5 shows the distribution. In this business model, foreign and
domestic sponsored SPVs behave similarly. Most of them have a very small
portion of foreign liabilities, and a mix of domestic and foreign assets

4 In the Central Bank survey, Investment fund linked are defined as Vehicles linked to
investment funds, which hold debt, equity, loans, or other financial assets with the goal of
capital appreciation or dividend income.
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