Originally published in The Fund Business, Guernsey Supplement, February 2008
Guernsey has a rich heritage of some 40 years in the investment funds business. Over these years the Island's funds industry has changed markedly evolving from a sector dominated in the 1980s and 1990s by open-ended equity funds to one in which there has been a significant increase in closed-ended alternatives, such as property, private equity, funds of hedge funds and the emergence and increase in popularity of more esoteric asset classes such as fine wine, fine art and timber.
There has also been major growth, particularly in recent years and by the end of September 2007 there were 1,063 funds under management and administration in the Island with a total value of £164.5bn up 6% during the previous quarter and 36.5% year on year. While activity is not quite as frenetic as pre-'credit crunch', business flows have remained more than robust. 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 are other substantial flows out there to be won. That is why we are still very much active in promoting Guernsey as the centre of choice for leading fund promoters and sponsors.
They recognise that the experience of the past four decades has helped build on the Island's hallmarks of innovation and professionalism to grow an industry with a wealth of expertise and a first class infrastructure. Indeed, today, Guernsey plays host to an extensive array of investment businesses, including investment advisers, stockbrokers and more than 50 fund managers, custodians and administrators, who in combination offer a range of products and services for both retail and institutional investors from the general to the more specialised.
World-renowned investment management companies have the operation of their investment funds facilitated in Guernsey, where there is high quality legal, accounting, valuation, registrar, company secretarial and audit services for the structuring, launch and administration of funds. Guernsey's administrative heritage is increasingly being complemented not just by the availability of custody services but also fund managers, ranging from larger organisations to more boutique operators.
The Island's success is built on the fact that, in addition to what I have already outlined, it also boasts: a range of flexible investment vehicles such as unit trusts, limited partnerships, protected cell companies (PCCs) and incorporated cell companies (ICCs); a fast-track route for fund approvals; listings on the Amsterdam Euronext; the Channel Island Stock Exchange (CISX), which is available for primary or secondary listings; a competitive tax environment; an experienced and qualified pool of non-executive directors; and robust yet pragmatic regulation.
Guernsey's on-going development of the funds environment keeps it at the forefront of international centres despite the ever-increasing domicile competition that has also been a feature of the past forty years. 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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