Originally published in Private Equity Manager, 27 June 2012
In the first week of June a delegation from Guernsey visited New York and Boston to explore the opportunities for the Island to attract more US private equity business. Here, Peter Niven, Chief Executive of Guernsey Finance – the promotional agency for the Island's finance industry, explains the rationale behind the visit, how the team fared and what happens next.
During the last decade Guernsey has built a strong reputation as a leading jurisdiction for domiciling and servicing private equity funds. In that time we have seen a significant number of the major UK and European private equity houses choosing to use Guernsey and, indeed, some of those, such as Terra Firma, Permira and Apax, have established their own operations in the Island.
Several US private equity managers have also chosen Guernsey, including Kohlberg Kravis Roberts & Co. whose KKR Private Equity Investors LP raised more than US$5 billion before listing on Euronext Amsterdam in 2006. This was extremely significant in raising awareness among US managers of Guernsey's capacity to act as a gateway to list vehicles on European stock exchanges.
The last time Guernsey Finance visited New York to promote the Island's offering was at the outset of the global financial crisis and since then, the gloomy worldwide economic conditions have depressed the markets and perhaps, no more so than the US private equity industry. However, it seems as if the (slow but steady) US economic recovery is filtering through to the private equity sector. Certainly, in Guernsey, we are seeing renewed interest from US managers in what we can offer as a gateway to accessing capital from European markets.
At the same time, our latest fund statistics also show that there were a significant number of new fund launches in the first quarter of this year in Guernsey, where the total value of funds business stands at US$425 billion (up 3% in the first three months of 2012) and private equity comprises nearly US$125 billion*. Yet, it is important that we do not rest on our laurels and simply rely on business coming from our traditional markets of the UK and Europe, especially with the ongoing uncertainty in the Eurozone.
Therefore, we decided that we would look to capitalise on the renewed interest from the US by taking a team of local practitioners to meet with private equity managers and their advisers in both New York and Boston. At the start of June I travelled to New York with Gavin Farrell, from law firm Mourant Ozannes and Tony Mancini from KPMG in Guernsey, for a series of meetings with managers, lawyers and accountants. We then moved on to Boston where we were joined by Ray Page and Julian Carey, both from International Administration Group (IAG), for a further series of meetings and also to exhibit at SuperReturn USA.
We were very well received and there was significant interest in what Guernsey can offer as a private equity domicile. As well as being able to reach new contacts, we were also able to touch base with some managers who already use Guernsey and there is a feeling that if harnessed appropriately then their positive attitudes could prove a real force for good in convincing their peers about the experience and expertise we have in catering for private equity business.
It is clear that we need to be highlighting our private equity credentials to managers and their advisers in the US on a regular basis. We see this visit as the first step in a drive to attract more private equity business from the US. We are already making plans to return to New York and Boston and I also expect us to be visiting other major private equity hubs as well during future visits to the US.
*Figures from the Guernsey Financial Services Commission (GFSC) for the period to the end of March 2012.
For more information about Guernsey's finance industry please visit www.guernseyfinance.com.
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