Bank of New York Co. has opened its first fund management services company abroad.
The new unit is in Dublin, where several other U.S. banks have similar operations.
The 100%-owned subsidiary, Bank of New York Fund Management (Ireland) Ltd. will offer custody, trustee, fund accounting, fund administration, and transfer agent services to mutual funds and other collective investment funds in conjunction with Allied Irish Banks PLC.
Fred Ricciardi, senior vice president responsible for mutual funds and unit investment trusts, said the bank was following its customers, principally U.S. and foreign institutional and retail investment management companies, which are running investment funds out of Dublin.
"It's a combination of companies looking to set up offshore funds, and Luxembourg-based funds looking at Ireland as an alternative base," Mr. Ricciardi said.
He and others said that lower costs coupled with a highly educated work force and reduced taxes make Dublin an increasingly attractive alternative to Luxembourg, which is experiencing labor shortages.
Among the other U.S. banks which operate from Dublin are Bankers Trust New York Corp., Chase Manhattan Corp., Citicorp, Chemical Banking Corp., and Boston-based Investors Bank and Trust.
Bankers Trust, for example, manages and administers funds through Bankers Trust Fund Managers (Ireland) Ltd. Chase, meanwhile, has several companies, including Chase Bank (Ireland) PLC, which engages in securities transactions, trading, financial engineering, corporate treasury management, and custodial services.
In December, Merrill Lynch said it was planning to set up a bank in Dublin for its European capital markets activities.
Peter Byrne, vice president for financial services at the Irish Development Agency in New York, said that Dublin's growth as a financial center has been fueled by deregulation in Europe.
U.S. banks have a wide range of activities in Dublin beyond custodial and servicing operations, he said. "An interesting piece of business these banks engage in quite apart from custody administration is managing treasury vehicles on an agency basis for U.S. corporates," Mr. Byrne said.
Bank of New York said its Irish unit will provide fund management and related services for credit, cash management, triparty repurchase agreements, securities lending, American Depositary Receipts, corporate trust, and foreign exchange.
The bank has provided fund management services for U.S. mangers operating in Europe since the mid-1980s, but has handled such services from New York until now.