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Guernsey funds growth points to promising future

03 October 2016

Senior figures from within Guernsey’s fund industry have welcomed the continued increase in the value of funds under management and administration in the island.

Statistics released at the end of last month by the Guernsey Financial Services Commission (GFSC) show that, at the end of June 2016, the net asset value of all funds under management and administration in Guernsey stood at £247.1 billion – an increase of £9.1 billion (3.8%) since the end of March. For the year ending 30 June 2016, the total value of funds in Guernsey has increased by £27.2 billion (12.3%).

Speaking to the Guernsey Press, Andrew Whittaker, Chairman of the Guernsey Investment Fund Association and Managing Director of Ipes, said the stats were very good news.

“We have done very well getting some very large fund managers based in Guernsey and in a challenging environment where people are looking to go to different jurisdictions, their launches send a message to the market that you have market-leading funds domiciled in Guernsey.”

Mr Whittaker explained that some billion-pound fund launches from the island have boosted the figures and overcome a loss of a number of smaller funds over the past 18 months.

“They make sure that Guernsey remains a high-profile jurisdiction for private equity,” said Mr Whittaker.

Tom Amy, Head of Funds at Elian in Guernsey, also welcomed the continued upturn.

“The positive performance of Guernsey’s fund industry is consistent with our own observations regarding business activity from new and existing clients. The fantastic feature of this growth is that the underlying clients are jurisdictionally diverse and opportunities are influencing all key asset classes. Recent launches and enquiries span private equity, real estate, debt infrastructure and also some niche alternative strategies. This momentum generates a genuine reason for optimism as we look towards 2017 and beyond.

“We have done very well getting some very large fund managers based in Guernsey and in a challenging environment where people are looking to go to different jurisdictions, their launches send a message to the market that you have market-leading funds domiciled in Guernsey.” Andrew Whittaker, Chairman of the Guernsey Investment Fund Association

Paul Wilkes, Group Partner and Head of the Guernsey commercial department at Collas Crill, said: “These statistics show the continued strength of the fund sector through the first half of this year despite the uncertainty of Brexit and the build-up to the US presidential election.

“At Collas Crill we have seen this continue into the third quarter with a number of exciting projects, including continued investment in the UK property sector, venture capital funds and, with open-ended funds, an increasing trend to choose Guernsey over traditional hedge fund jurisdictions. All in all, promising signs in advance of the big news we have been waiting for on the opening up of Europe with the AIFMD passport.”

Byron Rees, Partner at Ogier, said that some large fund launches and the birth of the manager-led product had all played their part in the healthy figures recorded over the past year. He said that all indications were that growth would continue.

“We have seen increases across a range of activity, including closed-ended and open-ended funds managed here, and non-Guernsey schemes,” he said.

“We’re looking at a set of healthy figures reflecting confidence in the island, and that’s what we’d expect to see after the positive ESMA passporting verdict.”

In July, Guernsey was recommended for a 'third country' passport under the Alternative Investment Fund Managers Directive (AIFMD) by the European Securities and Markets Authority (ESMA).

The independent EU regulatory authority had assessed Guernsey, alongside 11 other non-EU jurisdictions, as part of its non-EU AIFMD passport reviews. In its final assessment, ESMA has concluded that 'there are no significant obstacles regarding investor protection, competition, market disruption and the monitoring of systemic risk impeding the application of the AIFMD passport to Guernsey'. Guernsey was one of only five jurisdictions to receive an ‘unqualified assessment.

ESMA's advice is now being considered for approval by the European Commission, Parliament and Council. Once approved they will activate the relevant provision in the AIFMD to extend the passport through a Delegated Act.

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