As it welcomes new acquisition Legis, Orangefield is perfectly placed to advise clients on the National Private Placement scheme, says Patricia White.
How effective is Guernsey's National Private Placement scheme in cooperation with AIFMD in Europe?
Patricia White (PW): The National Private Placement (NPP) scheme is working really well for Guernsey in all key markets, especially the UK. It is particularly effective when funds are placing in three or four countries, making it easier to negotiate. If there are many more, there is the possibility that it may become too onerous.
Is the NPP a viable alternative?
(PW): Absolutely. Alternative investment fund managers using the NPP route have a quicker and cheaper option available to them than those required to be fully compliant with the Alternative Investment Fund Managers Directive (AIFMD), and this route should be chosen where possible.
Guernsey also offers a dual opt-in regime for those fund managers and depositories whose activities may require them to satisfy the full obligations of AIFMD when distributing funds into European and non-European countries.
Has it been easy for clients with Guernsey-domiciled funds to comply? What kind of legal challenges have they encountered?
(PW): Post-implementation of AIFMD, it has proved to be a surprisingly smooth process. Many smaller funds are out of scope of the directive as they fall within the de-minimise exemption levels. For the majority, marketing in a limited number of jurisdictions fits well with the NPP regime. Having positioned themselves with appropriate solutions prior to the implementation of the directive, all other managers have now adapted to the requirements of the regulation.
The Guernsey regime has options to secure compliance with AIFMD and has encountered no particular legal problems as a non-EU jurisdiction.
Mergers and acquisitions have been identified as an emerging trend in the offshore admin sector. Why is this?
(PW): This trend reflects renewed optimism in global markets and the widespread realisation that some markets remain under-priced, presenting an opportunity to buy into this space. Also the increasing costs and obligations of compliance with international regulation make mergers an attractive proposition.
What kind of benefits have Legis and Orangefield clients seen since the acquisition?
(PW): With our shared vision for continuous growth and development through the provision of award-winning service, and with the continued focus on the client, our collaboration is proving very successful. We have assets under administration in excess of $50 million and a presence in more than 20 jurisdictions, so fund managers can now leverage the global capability of the larger organisation, while receiving the continued bespoke service our clients have come to expect.
Guernsey is well positioned for continued success in funds and as part of Orangefield Legis, being part of a single-platform solution, we offer clients a one-stop shop. We assist fund managers in all financial centres, offering tailored solutions specialising in the administration of private equity, real estate and hedge funds.
What other trends have you seen emerging in the Channel Islands, and what do you expect to see in the rest of 2015?
(PW): Following a number of years where fund raising has presented a challenge, we are now seeing increasing numbers successfully launching.
We are also seeing the use of fund structures to fill the gaps left by the implementation of Basel II, in particular the use of equity structures that provide the benefit of debt as well as an increasing use of deal-by-deal structures as opposed to fully regulated fund vehicles.
This year's general election in the UK may also result in pause of activity, so subsequent trends may be dependent on the outcome.
An original version of this article was published in Asset Servicing Times , Guernsey supplement, April 2015.
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