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South Africa Update - Grant McLeod, June 2022

13 June 2022

Written by Grant McLeod Guernsey Finance

Investment managers in South Africa continue to be attracted by the opportunity to reinvest outside of the country and to encourage capital from overseas institutions and high-net-worth individuals into the country – and are finding that Guernsey investment funds are the perfect fit for their ambitions. In his latest Business Development blog, WE ARE GUERNSEY South Africa Representative Grant McLeod takes us through the agency’s latest roadshow in the region, when the delegation shared these messages and generated further opportunities for the island...

I was delighted to have Midshore Consulting Managing Director Christopher Jehan, Zedra Funds New Business Manager Barney Lewis and Collas Crill Group Partner Gareth Morgan join me in South Africa in May. We spent most of the trip in Cape Town with a stop off in Johannesburg towards the end.

Normally we meet with fund administrators, who can connect us with investment and asset managers when they are ready to launch or migrate a fund. But the pre-trip preparation we did on this occasion allowed us to go beyond the middle man and have several direct client meetings. This is the direction we hope our roadshows will take in the future.

Guernsey has proved to be a successful jurisdiction for South African wealth managers seeking to establish investment funds outside of their country in recent years. Our meetings are highly valuable for those looking for a conduit into Guernsey. There are a lot of South Africa fund administrators with an office in Guernsey, so this also gives us a good head start.

We also attended the Southern Africa Venture Capital and Private Equity Association (SAVCA) Private Equity Conference over two days in Paarl on the outskirts of Cape Town. This was an excellent opportunity for networking between sessions, and the roadshow team made around 30 new connections and introductions between them. In our one-to-one roadshow meetings, we were mainly focusing on open-ended funds in Guernsey but at SAVCA, our main topic of discussion was closed-ended funds.

Like with our roadshow meetings, we were targeting fund managers for all kinds of assets – venture capital, alternatives, private equity – but also connected with lawyers, accountants, fund administrators and government executives. As useful as virtual meetings have been over the last couple of years, it goes to show the benefit of being on the ground.

The conference was very busy and I understand there were people on the waiting list. This was likely down to the fact that some (but not all) Covid restrictions have been lifted here, and everyone is desperate to get out and meet people again, and venues are perhaps still building up to full capacity.

One of the key topics of the event was ESG. South Africa is ahead on the social and governance aspects, but lags behind when it comes to environmental issues. This is where Guernsey come in as a world leader in green and sustainable finance, and this is definitely an angle we can push at future roadshows.

We were also able to share Guernsey’s key messages in terms of its regulatory flexibility in the registration and set-up of funds of many different asset classes.

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