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Reasons to choose Guernsey for funds

22 November 2021

Written by Jo Peacegood Guernsey Investment & Funds Association

With the 2021 Guernsey Funds Forum, Building Tomorrow, fast approaching, GIFA Chair Jo Peacegood explores the latest updates in Guernsey's funds sector and hears from services providers and clients on why Guernsey is the jurisdiction of choice.

The latest statistics from the Guernsey Financial Services Commission (GFSC) continue to show growth in Guernsey’s funds sector with the net asset value of funds in Guernsey currently at an all-time high, having increased by 20% over the past year. This is really pleasing to see, although we appreciate that there are many variables/factors that contribute to those numbers increasing. We are, however, aware that the Authorisations team at the GFSC are continuing to see a healthy pipeline and hence new products/managers are continuing to come to the island.

As a sector, our approach to promoting ourselves tends to be to continue doing a good job, and to quietly share our significant depth of knowledge and experience. This has worked well for us in the past, however with investors having many options as to where to put their funds and products, and with some of the misconceptions about where we sit politically, I strongly believe that we need to stand up and share our story about what we do and how well we do it, whilst at the same time squashing those misconceptions.

I therefore did a quick straw poll of professionals and clients and asked them ‘why Guernsey for funds?’. I was delighted to be inundated with a list of positive responses that differed depending on asset class and geography, as you would expect. I have pulled together some of the common factors and include a brief explanation below.

Firstly, service providers - we have a great selection of service providers with tremendous strength in depth and knowledge, and have more than 50 years of experience in the funds sector. Whether that global brand, or that niche offering, we work with investors to arrive at the right solution. Our people appreciate that clients have a choice of location, and our offering is compelling. Covid was the ultimate test, but our service providers quickly adapted to working from home and delivering business as usual (as much as possible), demonstrating great resilience and stability.

We also have a regulator who is approachable and pragmatic and willing to work with various parties to bring products to market. We have a fast-track system and hence the speed to market, which many investors and clients desire, is tried, tested and successful. Our regulator is innovative and if the solution isn’t obvious, they will take the time to understand what you are trying to achieve and work with clients. Examples of this have included blockchain and cryptocurrency.

Our Non-Executive Director pool is exceptional, with a diverse talent group possessing significant skills and experience, which is continuing to grow with high-calibre people. We have one of the highest number of Chartered Directors that the Institute of Directors programme has seen, and a pool of candidates who understand the sector and want to ensure that products are achieving their objectives.

Guernsey is on the OECD ‘whitelist’ for transparency and is well respected with a strong reputation - assessed by ESMA and approved for AIFMD equivalence, yet with the flexibility to stay outside of the regime, and access the National Private Placement Regime if required.

Add to that a politically stable and accessible government, which not only understands the sector but also appreciates the huge contribution it makes to the economy, which in turn means that it works with the sector when needed and can quickly respond to challenges or changes. I am not sure you would find another jurisdiction as well connected where the lawyers, professional advisers, politicians and the regulator will quickly come to the table to discuss solutions.

Whilst I have tried to keep this general across the sector, a recurring theme that came through in my straw poll was the significant experience that Guernsey has in the listed sector (being the leading jurisdiction outside of the UK for number of listings on the LSE), the private equity world including fit-for-purpose structures and people that really understand PE, and infrastructure and real estate assets.

Finally, a little bit on distribution and geography. Being closely aligned to the UK (and in the same time zone), it is not surprising that Guernsey has strong access to Northern Europe as well as great connections and access to the US, Asia, South Africa and the UAE, to name a few, with agreed regulatory Memoranda of Understanding and private placement regimes.

So with that in mind, I will close there but suffice to say, we have great foundations and need to continue to share our story about how much experience we have in this sector and how we are flexible and adaptable as needed.

The future looks bright, and the future of funds will be part of the discussions at the Guernsey Forum on November 29. If you are near London, I would highly recommend registering to attend to learn more about Guernsey’s blossoming funds sector and to network with world-class service providers. You can sign up here.

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