Nicholas Blake-Knox, partner and head of Walkers' Asset Management and Investment Funds group in Ireland, recently sat down with Legal Business for a Q&A. In the interview, Nick discusses his career and trends in the funds industry.
Can you tell us a little bit about your career and how you ended up at Walkers?
When I graduated from University College Dublin in 2001 with a business and law degree I wasn't entirely sure what I wanted to do. A friend in university had started working in a finance role within a fund administrator and he told me that if I joined and stayed for three months that he would get a €500 referral bonus. I joined. He got the referral bonus (which he didn't share with me incidentally) and subsequently left to become a primary school teacher. Ironically, I have remained in the funds industry ever since. My legal career began a couple of years later with one of the leading domestic firms in Dublin, where I was earmarked for their investment funds group when I finished my traineeship. In 2011, I moved to London and joined the global asset management firm, PIMCO. I stayed in London with PIMCO for almost seven years before returning to Ireland in 2018 when I joined Walkers. During my time in London I completed an MBA at London Business School and briefly considered the idea of moving out of a legal role but ultimately stuck with a career in the legal profession. I feel that I have made the right choice and enjoy working in the funds industry in Ireland. Last year, I was elected to the Council of Irish Funds (the asset management and investment funds industry association here) and recently have been appointed to the role of vice chair of the association and consequently will assume the role of chair next year.
How has the funds industry changed over the last 20 years that you have been working in it?
From a legal and regulatory perspective there have been huge changes in the industry, particularly with the evolution and introduction of the UCITS and AIFMD Directives. The pace of regulatory change has continued unabated and more recently the growth of ESG and the introduction of new asset classes, such as digital assets, has meant that the need for specialism and expertise in particular segments of the market has developed. The growth of private market investing, for example, has seen the need for private funds lawyers increase and this has been something, alongside ESG expertise, that we have been focused on recently in our recruitment efforts.
The other major change that we have seen over the last number of years, which was intensified through Brexit, has been that many more asset managers have a physical presence here in Ireland. 20 years ago that was certainly not the case, but now many of the leading global asset management firms have people on the ground and in some cases employ in excess of 100 people here. Where we would have almost exclusively interacted with clients in the major financial centre hubs, such as London and New York, our client contacts are increasingly based in Ireland, which is great to see from an 'Ireland Inc.' perspective.
What challenges have you faced operating in this market sector and what has been successful?
The key challenge that most law firms have faced over the past few years has been retention and recruitment of talent. As we operate in a specialised sector there is a finite pool of asset management and investment fund lawyers and the market is extremely competitive. While compensation remains a key driver for employee satisfaction, there are many other factors which drive an employee's decision to remain with a firm. This is an area that we have been extremely focused on and earlier this year the firm completed a global engagement survey to identify areas where we can improve and ways in which we can better engage with our staff. We have been fortunate in the asset management and investment funds group to have had strong staff retention over this period. However, this is not something that we can ever be complacent about as there are many competing options in the market, which not only include other law firms but in-house opportunities given the large number of asset managers and financial service providers here in Ireland. The lure of London is also a trend that we are seeing (and one I can sympathise with given my history) – and it has a pull for our junior lawyers in particular. We currently have two Irish investment funds lawyers based in our London office that support the group here and that continues to work well.
A key focus for us over the last few years has been to build out the team to ensure that we are adequately resourced and have strength in depth so that we are less vulnerable to departures or increased spikes in workload. Our asset management and investment funds group recently retained our tier 1 ranking with IFLR, one of the leading law directories, which is something we are very proud of but it is important not to get complacent. We are also lucky to be supported by other very strong practice groups within Walkers and our international colleagues across our ten global offices.
What trends do you see emerging over the coming 12 months?
We see great opportunities for the further development of ESG specialism with there being a continued focus on the development of innovative investment fund products in this area. Separately, the European Long Term Investment Fund (ELTIF) regime has been significantly enhanced and from early next year, the 'ELTIF 2.0' product will be available which provides retail investors with access to private market assets which will enable potentially higher-yielding longer-term return profiles. We are already seeing a significant amount of interest in the enhanced ELTIF product and industry have been working closely with the Central Bank of Ireland to ensure that Ireland will be 'open for business' when ELTIF 2.0 goes live in 2024.
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