The value of Guernsey funds under management continues to grow with further increases in all sectors since the 1996 year end figures were published. The total value of funds under management at 30 June 1997 amounted to a record £17.1 billion, up 11.3% from the previous quarter and up 28% since year end.
In the open-ended sector (see endnote 1), the net asset of funds ("NAV") at the end of June was £11 billion, an increase of 7% from the previous quarter. There were 21 new funds authorised during the first half of the year (compared with the same number in the whole of 1996), two of which were Protected Cell Company ("PCC") funds; however, the net effect of a number of suspensions (at their managers' request) and following the merger of two fund groups with the resulting consolidation of their representative funds during the second quarter, was that the total number of authorised funds remained unchanged at 169. Net new investment was positive (a further £204 million in the quarter) bringing the total net new investment to just under £1 billion in the first half. Interest in umbrella funds continues as fund managers take advantage of the economies of scale which such structures offer. There were 19 new classes added to existing authorised funds bringing the total number of investment pools to 475.
The closed-end sector (see endnote 2) was equally buoyant in the second quarter of the year. The value of funds under management increased by 20% from the previous quarter to a total of £6.1 billion. In the first half of the year, 21 new funds were granted consent compared to 29 in calendar year 1996. There has been strong interest in hedge funds, venture capital and emerging markets.
Guernsey is a base for funds from 36 countries and has over 80 fund management groups represented in the Island. There were 13 fund promoters/sponsors not previously represented in Guernsey which launched a Guernsey fund during the first half of the year. Of the total number of Guernsey funds (350 as at 30 June 1997), seven funds have assets under management in excess of £500 million and, of these, one open-ended fund has an NAV of £1.5 billion.
There is continued growth in relation to the number of non-Guernsey schemes for which management, administration or custody services are provided in Guernsey by local fund managers or custodians. Eighteen such funds were added to the number of non-Guernsey funds so far this year. The net position is that there are 62 non-Guernsey funds with a total value of £3.1 billion being serviced by local fund professionals.
1. Open-ended schemes are funds which are offered for sale throughout the life of the fund and without limitation on the shares/units which investors are entitled to redeem on demand subject to any applicable notice period.
2. Closed-ended schemes normally have a fixed capital issued once and for all and investors have no absolute entitlement to redeem their shares/units.
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.
For further information contact Nigel Taylor, Director of Investment Business or Tammy Menteshvili, Deputy Director of Investment Business on Tel: +44 (0) 1481 712706 or visit the Guernsey Financial Services Commission Web Site at:
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