Guernsey: Guernsey's Finance Industry Shows Growth Across The Board

Last Updated: 27 June 2013
Article by Fiona Le Poidevin

Most Read Contributor in Guernsey, September 2018

The investment fund, banking and insurance sectors in Guernsey have all grown during the opening months of 2013.

Figures from the Guernsey Financial Services Commission (GFSC) show that the net asset value of funds under management or administration in the Island grew £19.7 billion (7.1%) during the first quarter of 2013, total deposits held with Guernsey banks increased £3.8 billion (4.4%) during the first three months of the year and the insurance sector has experienced net growth of 24 entities between the end of last year and the end of May 2013.

Fiona Le Poidevin, Chief Executive of Guernsey Finance - the promotional agency for the Island's finance industry, said: "It is very pleasing to see that the key statistics for each of the fund, banking and insurance sectors have shown growth during the opening months of 2013. There is no doubt that these remain tough times but this is why it is all the more encouraging that our finance industry is continuing to deliver positive results."

The net asset value of funds under management and administration increased during each of the four quarters of last year and this has now been followed by growth of £19.7 billion (7.1%) during the first three months of this year to reach £296.5 billion at the end of March 2013. This represents an increase of £26.4 billion (9.8%) on a year previous, growth of £32.8 billion (12.4%) on the same time two years ago and a rise of £99.1 billion (50.2%) since the end of March 2010.

The figures from the GFSC also show that the Guernsey closed-ended sector was valued at £137 billion at the end of March - up £6 billion (4.6%) during the final three months of 2012 and up £13.1 billion (10.6%) compared to twelve months earlier. Guernsey domiciled open-ended funds reached a net asset value of £54.1 billion at the end of March 2013, which was an increase of £3.8 billion (7.6%) during the quarter but down £1.7 billion (3%) year on year. Non-Guernsey schemes, where some aspect of management, administration or custody is carried out in the Island, grew by £9.9 billion (10.4%) during the quarter to reach £105.4 billion at the end of March 2013, which is £15 billion (16.6%) higher than the value at the end of March 2012.

Miss Le Poidevin said: "It is especially promising to see that our funds sector has not just continued to show overall growth for yet another quarter but that during the first three months of this year we have experienced an increase in value across the open-ended, closed-end and non-Guernsey sectors. Of course market values generally, particularly US stocks, did well in the first quarter but Guernsey has seen some notable fund launches during the period, including ICG-Longbow Senior Secured UK Property Debt Investments Limited which became the first London listed fund Initial Public Offering (IPO) of 2013."

The latest fund statistics were released just one week after the GFSC issued Guernsey's domestic Alternative Investment Fund Managers Directive (AIFMD) marketing rules and has confirmed it is able to accept applications prior to 22 July 2013. That development followed from the European Securities and Markets Authority (ESMA) giving its approval for the bilateral agreements to be signed which will create a formal framework of cooperation on matters of mutual interest between the GFSC and the equivalent bodies in the EU Member States, Croatia, Iceland, Liechtenstein and Norway.

"The ESMA announcement and the publication of the approved marketing rules mean that Guernsey is very well placed for when AIFMD goes live on 22 July," added Miss Le Poidevin.

"Guernsey will be offering a dual regime. An AIFMD offering for those EU investors and managers who need, or choose, to take this route and at the same time, our existing regime for those who fall outside the scope of AIFMD or are able to take advantage of National Private Placement regimes. This will enable us to fully service our truly global client base and therefore, continue growing a funds sector which is, as we can see from the latest statistics, already in very healthy shape."

Figures from the GFSC also show that the total value of deposits held by banks in Guernsey grew by £3.8 billion (4.4%) during the first quarter to reach £90.5 billion at the end of March 2013. The quarterly report on banking sector activity from the GFSC said that sterling weakened against the US Dollar, Euro and Swiss Franc, which had an overall positive effect of boosting the level of deposits expressed in sterling. However, there was also a volume increase during the quarter and this new business coming into Guernsey banks indicates some early signs of potential growth going forward. Deposits are now 10.4% lower than at the same time a year ago. Total assets and liabilities increased by £3.5 billion (3%) during the quarter to reach £117.5 billion at the end of March 2013, which was 8.4% lower than a year previously.

The GFSC's monthly statistical update for the insurance sector shows that there has been net growth - incorporating additions and surrenders - of 24 international insurance entities domiciled in Guernsey during the first five months of the year, reaching a total of 761 at the end of May 2013. The greatest growth continues to be in the number of Protected Cell Company (PCC) cells and also Incorporated Cell Company (ICC) cells.

Miss Le Poidevin added: "These figures show that the funds, banking and insurance sectors have all posted solid performances in the midst of what is a harsh economic climate globally. While external factors have also played a part in this growth, Guernsey continues to deliver."

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

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.

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