Originally published in Investor Services Journal, December 2007.
Since 2000 Guernsey has been growing its reputation as a leading private equity domicile. However, events of the past few weeks and months have really crystallised the fact that the Island is now the jurisdiction of choice for private equity.
The latest statistics released by the regulator, the Guernsey Financial Services Commission (GFSC), show that overall fund business in Guernsey grew by £8.9bn (5.7%) in the three months to the end of September despite significant market turbulence during the quarter. That took the total value of funds under management and administration to a new high of £164.5bn an increase of £44bn (36.5%) year on year.
The value of private equity funds trebled between the end of 2002 and the end of 2006 and by the end of September this year there were 226 such funds with a total value of £28.4bn up £8bn (40%) in the first nine months of 2007 and £2.4bn (9%) during the third quarter alone in spite of the credit crunch.
These impressive figures have also been backed up by third-party endorsements from the likes of leading City of London lawyer, Bridget Barker of Macfarlanes. Speaking at a major Institute of Directors event on the Island she asserted that Guernsey was "the jurisdiction of choice for private equity."
This was still being digested when Jon Moulton, Founder and Managing Partner of Alchemy Partners and who now lives in Guernsey, told a local lecture lunch that the Island was "a terrific place in which to do business."
It is also understood that Terra Firma will soon be opening an office in the Island.
These ringing endorsements come on the back of Guernsey listed fund transaction, KKR Private Equity Investors LP, from Kohlberg Kravis Roberts & Co, raising more than US$5bn before being launched on Euronext Amsterdam. It subsequently won Equity Deal of the Year at this years International Financial Law Review (IFLR) European Awards.
Following on from KKR there have been other notable Guernsey private equity funds, including the largest central European buyout fund in excess of ¬1bn Mid Europa III LP; Valdivia Private Equity Fund; Energy Ventures III; AA Development Capital India Fund a joint venture between Ashmore and Alchemy; and EQT V Limited (Clifford Chance) which raised ¬4.25bn.
This body of evidence is just the tip of the iceberg but it clearly illustrates Guernseys credentials as a jurisdiction of choice for private equity the Island is a private equity success story.
For more information about Guernsey's finance industry please visit www.guernseyfinance.com
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