The success of Guernsey's investment fund business has been further endorsed by a significant move up the rankings of the Fund Domiciles.com Stability Index for 2011.
Guernsey was the highest placed jurisdiction of those showing improvement, with a move up from sixth place in 2010 to third this year.
Luxembourg remains the most stable fund domicile, followed by Malta in second position. Cayman was fourth and Gibraltar fifth, with Ireland and Jersey in joint sixth as the latter fell three places in what was effectively a trade of positions with Guernsey.
Peter Niven, the Chief Executive of Guernsey Finance, said: "This is yet more welcome news for our funds industry. Coming on top of a record high for funds under management and very strong feedback from the Funds Forum event in London, this improved ranking underlines the general positive buzz and optimism that we are seeing around Guernsey's investment fund business at present. It is a reflection on Guernsey's professional practitioners and the infrastructure that has been established for investment funds which is finding favour with fund managers."
The FundDomiciles.Com rankings are based on a combination of macroeconomic and fiscal data, as well as fund flow statistics.
The overall score includes a 50 per cent weighting for data that could impact the financial stability and competitiveness of the jurisdiction. Among the data taken into account was the strength of Guernsey's finances, its overall fiscal position, GDP and inflation rates.
The other half of the score was based on the size and percentage change in fund flow data; it has recently been announced that Guernsey has seen the value of investment fund business grow by £6.2 billion (2.4%) during the first quarter of this year, to a new record high of £263.6bn – a rise of £66.2bn. since March 2010.
FundDomiciles editor Simon Osborne said: "Many of the specialist alternative funds that are attracted to a location like Guernsey are performing strongly at the moment and if investors continue to want to allocate to schemes that seek returns which are uncorrelated to equity markets, then this domicile should continue to prosper."
At the recent Guernsey Funds Forum event in the City of London Jon Moulton, Chairman of private equity firm Better Capital, said: "The thing that Guernsey has is a very good reputation; it works very well and people are mostly very happy about running things there. It's critical to maintain integrity over time. It has got excellent regulation and is sensibly run. You can actually talk to the regulator in marked contrast to some other jurisdictions. It has reasonable costs, the fiscal structure is sensible and the relationship with Europe, while difficult, is currently in a good place. Guernsey needs to carry on doing what it's doing into the future and it will prosper."
For more information about Guernsey's finance industry please visit www.guernseyfinance.com.
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