Fiona Le Poidevin, Deputy Chief Executive of Guernsey
Finance, looks at Guernsey's advantages for being a home to
It is no great secret that the global financial crisis has had a
severe negative impact on the property market. In Guernsey we have
seen the value of our property funds decline. This is not
surprising considering that it is largely correlated to the
performance of the wider market. However we have also seen values
recover during the last three years. A notable development last
year was when the Cubic Property Fund Limited migrated from Jersey
to Guernsey. It has been authorised as an open-ended scheme and has
maintained its listing on the Channel Islands Stock Exchange
This highlights the way in which Guernsey remains a jurisdiction
of choice for domiciling property funds.
Guernsey's heritage as an investment funds centre stretches
back around half a century. This experience means that the Island
has built a wealth of expertise and first class infrastructure for
the structuring and servicing of not just traditional funds but
also alternatives, including property.
Another example of a property fund domiciled in Guernsey is the
Standard Life Investments Property Income Trust Limited, which was
launched in November 2003 as a closed ended scheme investing in UK
commercial property. It is listed on both the Main Market of the
London Stock Exchange (LSE), as well as the CISX, with a value of
€106m. The Guernsey administrator is Northern Trust, the
auditor is Ernst & Young in Guernsey and Guernsey legal advice
is provided by Mourant Ozannes.
The total value of funds under management and administration in
Guernsey stands at €341bn, with property funds comprising
€17bn. There are around 50 fund administrators in the Island,
ranging from independent, boutique property specialists to globally
renowned names who can also act as custodians. They do service
non-Guernsey funds but a large proportion of their business relates
to Guernsey domiciled open and closed-ended funds, which are now
promoted and sponsored by leading institutions in more than 55
financial centres globally. These can be established through a
range of flexible investment vehicles such as unit trusts, limited
companies, PCCs, ICCs and limited partnerships.
Entities incorporated in the Island can be listed a wide range
of exchanges, including the LSE, where there are more entities from
Guernsey than any other non-UK jurisdiction globally. Guernsey
structures can also be listed on the exchanges in Dublin,
Frankfurt, Amsterdam and Hong Kong, among others, as well as the
locally-based CISX, where there are more than 4,300 listings.
We have also grown a reputation for a robust yet pragmatic
approach to regulation. For example, all Guernsey schemes remain
regulated but 'fast track' routes have been introduced
which allow for the speedy launch of funds, where appropriate.
Guernsey's international standing has been underlined by the
fact that the IMF has commended the Island's financial
regulation and Guernsey was among the first set of jurisdictions
placed on the OECD's 'white list' for tax transparency
and exchange of information.
Guernsey has signed Tax Information Exchange Agreements with 37
jurisdictions and the Island is in the process of extending its
network of Double Taxation Arrangements. In addition, the EU has
recently given a clean bill of health to the Island's zero-10
corporate tax regime. This means that all financial products will
continue to be taxed a zero rate, although there was already a tax
exempt regime for collective investment schemes and this will
remain in place. Guernsey is also fully engaged regarding the
It is anticipated that in both the immediate and long-term,
Guernsey will continue to be able to service structures with a
connection to Europe, while the Island's position outside the
EU will enable it to offer an appropriate regime for funds not
touching that marketplace. Guernsey is an ideal home for property
funds. Our experience in the asset class means that we are also
able to provide debt restructuring services to property funds. It
is an extra layer of comfort for managers to know that we will be
able to help when times are difficult but principally Guernsey is
chosen due to the infrastructure and expertise being available to
help launch successful property funds.
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