The need to look after developed markets as well as to
grow market share in the emerging and frontier territories
continues, says Fiona LePoidevin of Guernsey
Finance, whoreports from her recent trip to Latin
If there is one thing I've learnt during my tenure as chief
executive of Guernsey Finance, it is that the world is a very small
place. For example, this week I met someone in Latin America who
has family in Guernsey going back several generations.
I am in Rio de Janeiro, Brazil, as I write, where Guernsey is
exhibiting at a private equity event. However, my team and I will
also be talking to private clients advisers both here in Rio and in
Sao Paulo later in the week. This is my second visit to Brazil as
Guernsey looks to take advantage of opportunities in the region and
build on the Latin American client base we already have.
Promoting Guernsey's financial services industry does, of
course, take me far and wide and, as I travel to different
countries, experiencing different cultures and ways of doing
business, and speaking to advisers, it is clear how different
people's expectations are.
Private client needs vary greatly as do the drivers for
structuring a client's private wealth. In Latin America, there
is a burgeoning middle class but the growth seen in some of the
countries of the region over recent years is almost in spite of the
difficulties of doing business there.
However, things are changing. Take Brazil, for example. As with
many other emerging markets, Brazil has typically been domestically
focused because of the abundance of investment opportunities at
home, typical of a country so rich in natural resources. Now,
however, with such sporting events as the World Cup the Olympics in
2016, a more international focus is apparent and I'm not just
talking about the entrepreneurial street vendors trying to sell me
The number of family offices in Brazil is growing, with many
going as far as setting up their own investment funds rather than
relying on a third-party asset manager. The appetite for family
office investment in private equity is growing and this is a great
opportunity for Guernsey.
Indeed, this also reflects the changing face of the private
client sector. No longer is it the place for just a simple trust
structure. Now fiduciaries are working much more cross-sector and
client expectations are increasing. Speak to any fiduciary in
Guernsey or elsewhere and they will tell you that the line between
corporate and personal work is more blurred than ever.
These days, structures rarely boil down to tax savings. Private
client structures are more sophisticated because they are set up to
deal with more complex and changing family issues and this is often
the case for families in emerging economies.
For example, in China there may be intergenerational issues with
business succession, perhaps children who do not want to carry on
the family trade. Therefore, a patriarch may wish to exit his
family business via IPO or put money into a trust so that his
second or third generation family do not squander his fortune.
A Bollywood actor in India may recognise that not only is she
earning her living from films but also just from her image. She may
want to exploit that opportunity with merchandise and advertising,
for example, but also protect it using Guernsey image rights.
Guernsey is the first jurisdiction in the world to define image
rights in law and provide a public register to deter infringement
and interest in the register in India is growing.
Back here in Brazil, we have been told that the trend for
philanthropy is growing and families may wish to 'give
something back ' by creating a charitable foundation. Guernsey
introduced its foundations in 2013 and numbers have been growing,
with a significant proportion of these being used for charitable
and philanthropic purposes.
While there can be some barriers to entry for international
companies wanting to do business in Brazil, these are not
insurmountable, and many Latin American countries are now evolving
their legislative framework to bring down such barriers and to
encourage foreign direct investment both into and out of their
This can only bode well for Guernsey and other international
finance centres that are willing to put in the investment and time
to develop their offering to clients in such markets.
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