Originally published in Investor Services Journal, January 2008

Let me wish you all a very happy New Year. Annually at this time we tend to look back over the previous year and forward at what might lie ahead for us during the next twelve months. Well, if 2007 is anything to go by then the phrase expect the unexpected should cover us for 2008.

This time last year I was looking back over the tremendous achievements of Guernseys funds industry in 2006. Given those successes and the positive start to 2007, it appeared that the same growth might not be sustained throughout the year. This became even more likely with the sub-prime crisis and the unprecedented issues regarding Northern Rock.

However, while activity is not quite as frenetic as pre-credit crunch, business flows have remained more than robust. The value of funds under management and administration in Guernsey reached £164bn at the end of September an increase of 6% over the quarter and 36% on the same time in 2006.

The sector has been boosted by Februarys introduction of the innovative registered closed-ended funds regime, which was heralded at a specific Masterclass session in London. This event was followed by Septembers Guernsey Funds Roadshow to Manchester, Leeds and Edinburgh and there are now plans to promote the sector again in London but also in New York as further changes emanating from the Harwood Report come on-stream during 2008.

What I hear is that, at least for the first half of 2008, there is a strong pipeline of business coming into the Island and there is also other substantial business out there to be won. That is why we are still very much active in promoting the Island and particularly our growing reputation as a centre of excellence for alternative investments like funds of hedge funds, private equity and property, as well as more esoteric asset classes such as fine wine, fine art and timber.

I wonder whether looking back later at 2007 we might believe it was a pivotal year a watershed but of course for that we will have to wait well into 2008.

In a world of ever-increasing competition, Guernsey remains at the forefront of international finance centres through its on-going development of attractive products and pragmatic regulation. In fact, all the ingredients are in place for Guernsey to maintain its position as a jurisdiction where clients want to conduct business (and keep coming back for more) long may that continue.

For more information about Guernsey's finance industry please visit www.guernseyfinance.com

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