Guernsey Finance Chief Executive Fiona Le Poidevin spoke to Jessica Mills-Davies of Clean Energy Pipeline about Guernsey's expertise in cleantech funds.
Several new listings of Guernsey-domiciled funds are on the horizon as the public markets gain popularity as a means to raise finance quickly amid the harsh capital-raising environment in Europe, Fiona Le Poidevin, Chief Executive of fiduciary agency Guernsey Finance, told Clean Energy Pipeline.
The £260 million listing of the Greencoat UK Wind fund in March paved the way for UK clean energy funds to list on the public markets as a way to gain access to capital quickly.
"The success of [Greencoat] has meant others have followed in fairly quick succession," said Le Poidevin. "It's really opening it up to as wide a capital market as possible."
Guernsey has seen a proliferation of domiciled clean energy funds list publicly in recent months, with Bluefield Income Fund being the most notable. It raised £130 million through a flotation on the London Stock Exchange one week ago.
The Renewables Infrastructure Group Ltd. fund, another Guernsey-domiciled vehicle, has already managed to raise the £300 million it targeted in a listing on the exchange that is expected to close this week, according to sources close to the matter.
"I'm told there are a couple more [listings] in the pipeline as well," said Le Poidevin. "Solar seems to be the most viable now."
Le Poidevin predicts an uptick in future investment and public market activity in Guernsey-listed entities as appetite for cleantech investment gradually rebounds.
"We've seen cleantech funds come and go but at the moment people are really keen to invest, particularly in sustainable or ethical investments," she said.
Sources indicated that a fund managed by Resonance Asset Management LLP could be the next Guernsey-domiciled fund to list. British Wind Energy Income Ltd., a fund registered with the Guernsey Financial Services Commission that invests in operating wind farms, would be the most obvious possible flotation, although Resonance was unable to definitively confirm listing plans for the fund today.
"There are no plans at the moment, but there are plans in the future to do that," a spokesperson for Resonance told Clean Energy Pipeline by phone today.
The sheer volume of private equity and other institutional investors located in or operating from Guernsey is a major factor in the high concentration of listings by Guernsey-domiciled funds. "Guernsey has the most companies listed on the London market of any jurisdiction outside the UK," said Le Poidevin. "We have the most listing experience, which means we are the obvious domicile for listing an investment fund."
The resurgence of Guernsey listings is also a consequence of an increasingly sophisticated and growing network of law firms and financial services companies on or linked to the island that are able to connect investors with investment opportunities.
"Guernsey is well known to law firms and fund managers and having developed a trend for infrastructure funds in the last 20 years, that's become a specialty as well as private equity in Guernsey," said Le Poidevin.
Guernsey is boosting its activity in the renewable energy space through its ongoing financial services cleantech initiative, which aims to connect investors and businesses operating in the sector. The island is moving towards its goal of becoming a one-stop-shop for clean energy finance through attracting not only investors but also renewable energy service companies.
The Guernsey government is also in conversations with the governments of the UK, France and the other Channel Islands to discuss growing its marine energy capabilities in partnership with researchers to offer a destination for wind, wave and tidal power to rival Scotland.
"We're getting our own secondary legislation drafted at the moment for our own renewable sources," said Le Poidevin.
Being a self-contained regulatory system has certain advantages for businesses and investors located in the region, which could help aid Guernsey's goal of becoming a renewable energy hub.
Private equity markets in Guernsey have bucked the negative investment trend seen in the UK and the rest of Europe, with 10% growth in the year ended March 2013 in terms of assets under management to about £86 billion.
"In the last three years, our [investment fund] assets have grown 50.3%," said Le Poidevin. "We've seen an upturn....funds have stepped in [for the banks]."
Flexibility is key to this growth. This week has seen the introduction of new regulations for investment fund managers in Europe under the Alternative Investment Fund Managers Directive. Guernsey is able to provide greater optionality for European investors by continuing to offer the pre-existing regulatory regime while also introducing its own opt-in equivalent through a series of bilateral cooperation agreements with securities regulators in Europe.
"We are able to offer the equivalent regime as in the European Union," said Le Poidevin. "We are also able to keep our existing regime, which arguably is likely to be lower-cost. It's more flexible, so you can fit the regulation to the type of fund you have."
An original version of this article was published in Clean Energy Pipeline, 23 July 2013.
For more information about Guernsey's finance industry please visit www.guernseyfinance.com.
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