Guernsey: Country Report: Guernsey

Last Updated: 16 September 2011
Article by Andrew Tjaardstra

Most Read Contributor in Guernsey, September 2018

Originally published in ICFA, August 2011

Andrew Tjaardstra, Editor of International Custody and Fund Administration (ICFA), finds out how the funds industry, local custody and fund administration market is shaping up in Guernsey, one of the two largest of the Channel Islands.

With its own bank notes, stamps and tax laws, Guernsey has an unusual relationship with the United Kingdom. As a British Crown dependency in the English Channel, it is the responsibility of the United Kingdom to defend, but it is not part of the UK, even though its currency is linked directly to the United Kingdom. Some 6,000 years ago or so, Guernsey was attached to France before rising sea levels cut it off from the mass of continental Europe. More confusingly it is not part of the European Union. And, through hard work and ingenuity the small island has a AAA credit rating – superior to that of the US – and its very own exchange, the Channel Islands Stock Exchange.

Its tax status, attractive local features and being only 45 minutes flight from Gatwick airport, near London, has attracted the likes of private equity heavyweights Guy Hands (now notorious for his firm Terra Firma buying EMI) and Jon Moulton to live here.

What is definitely not confusing is that a huge amount of money is based on the island. At the end of March, Guernsey saw growth in assets under management hit a record of £236.6 billion. Fiona Le Poidevin, deputy chief executive and technical director of Guernsey Finance, explains Guernsey is now third behind Luxembourg and Malta in the financial stability index.

Patricia White, managing director at Legis Fund Services, who was part of a management buyout of the firm in March, says: "We are seeing opportunities in private equity, property and alternative investment funds, particularly in clean technology funds with investment strategies such as wind farms, timber and waste disposal." Legis has doubled its number of employees to 64 in the last three years, and moved to new offices on New Street in the capital St Peter Port.

Tamara Menteshvili is founding director and chief executive of the Channel Islands Stock Exchange. She says: "There is an increasing demand for the listing of private equity and venture capital funds. Also, it would appear that there is strong investor appetite for tangible assets, particularly in relation to natural resources such as biofuel, energy, precious metals and forestry."

As for service partners, there is a degree of flexibility on the island, with custodians, for example, often having the backup of a larger partner 'onshore'. Sadie Podmore, head of custody services at Butterfield Bank (Guernsey), comments: "[Another feature of the market] is the continuing openness on the part of fund managers to move between service providers, whereas historically clients kept all their eggs in one basket. Nowadays, there's a tendency towards spreading risk and looking for best of breed within the market for each service provider, whether administrator, custodian or auditor."


There are concerns for growth though. Patrick Firth, chairman of the Guernsey Investment Fund Association, the industry's representative body, says: "The biggest concern is regulatory uncertainty." He is referring to the alternative investment fund managers directive (for which the group has set up a technical sub-committee) Fatca and Dodd-Frank (see. pp.48-49). Guernsey is confident it is well positioned for the regulation when it is finally formalised, and for example, the island can gain EU passport status.

Finding your way to invest in the economic future is especially hard with so much uncertainty. Speaking at the Guernsey Fund Forum in London in May, Jon Moulton, founder of Better Capital, a private equity company that specialises in turnarounds and is based in Guernsey, said: "The [financial] crisis hasn't been as bad as I thought. The low interest rates have helped considerably. There are still enormous amounts of refinancing to come before we are fully through the crisis." He added: "Although it is impossible to predict where is best to invest over the next 10 years, geography may matter more than [asset] class."

Better Capital's fund administrator is locally based Heritage Fund Administration. Mark Huntley, managing director of Heritage, which has around $50 billion of assets under administration, says his company avoids open-ended funds, side-pockets or assets with emotions attached such as cars, wine and art. He says that private equity and investments in clean technology are growing sources of business.


Michel Davy, managing director of Ipes, Guernsey, an administrator for private equity companies, also sees energy and infrastructure as a growing trend. Davy says the lead time to raise funds is longer than before the crisis, and that investors have "more choice" and are "more fussy". The company has strong links with funds in Germany and Russia, and is expecting to see growth in Russia as infrastructure funds increase in the lead-up to the 2018 football World Cup.

A small delegation led by Guernsey Finance this year visited Moscow to establish more ties, as the country seeks to attract foreign investment; outward investment is difficult due to restrictions. Despite Le Poidevin describing the pensions and insurance markets as "immature", she says there could be great potential in the future, especially with the large amount of private wealth across Russia. A similar delegation visited China, including Shanghai and Beijing in August, with another trip planned to Singapore and Hong Kong in November.

In a further boon to the island, Guernsey, along with Jersey, has just been removed from the US Senator Levin's blacklist which listed the islands as "offshore secrecy jurisdictions", in his attempt to clamp down tax evasion in his 'Stop Tax Haven Abuse Act' (see Guernsey's chief minister Lyndon Trott met Senator Levin's chief investigator and Counsel Bob Roach to emphasise Guernsey's well-regulated financial sector, its lack of bank secrecy laws and its co-operative stance on tax information sharing.

Although it will not be immune from the growing global economic turbulence, Guernsey it is well placed, especially for differentiated assets, and there are plenty of fund administrators, lawyers and custodians on the island to negotiate with, offering a diverse and personal service.

Useful organisations on Guernsey

The Guernsey Investment Fund Association

The trade association was established in 1989 to represent the island's investment management industry. Its members include mutual fund managers and trustees, stockbrokers, custodians, fund administrators, private client asset managers, life assurance companies, investment banks, and professional firms such as lawyers and accountants who are closely involved in the work of the investment business industry.

Guernsey Finance

Guernsey Finance is a joint industry and Government initiative to defend and promote the long term reputation, stability and development of Guernsey as an international centre of excellence for financial services.

Guernsey Financial Services Commission

The Guernsey Financial Services Commission is the regulatory body for the finance sector in the Bailiwick of Guernsey. The Commission's primary objective is to regulate and supervise financial services in Guernsey and to uphold the international reputation of Guernsey as a finance centre.

Channel Islands Stock Exchange

The exchange, founded in 1998, services Guernsey and Jersey. It is approaching 4000 listings with over 25 countries represented. It has in excess of $50 billion of funds listed with a mix of funds and specialised debt. Share prices are available on Reuters.

For more information about Guernsey's finance industry please visit

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on

Click to Login as an existing user or Register so you can print this article.

Similar Articles
Relevancy Powered by MondaqAI
In association with
Related Topics
Similar Articles
Relevancy Powered by MondaqAI
Related Articles
Up-coming Events Search
Font Size:
Mondaq on Twitter
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
Email Address
Company Name
Confirm Password
Mondaq Topics -- Select your Interests
 Law Performance
 Law Practice
 Media & IT
 Real Estate
 Wealth Mgt
Asia Pacific
European Union
Latin America
Middle East
United States
Worldwide Updates
Registration (you must scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of

To Use you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these Terms or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.


The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.


Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions