Fiona Le Poidevin argues that Guernsey's 50 years of
experience in global cross-border fund structuring and distribution
makes it an ideal jurisdiction in which to nurture innovative
At a time of unprecedented change in the asset management
community, investment houses will be glad to know that Guernsey is
a jurisdiction which not only is a well-established international
funds domicile but also provides innovative solutions, including
for open-ended platforms.
GLOBAL CLIENT BASE
Guernsey's open-ended funds sector includes approximately
$140bn of hedge funds and funds of hedge funds business as well as
more traditional equity, bond and money market products. The
popular Guernsey open-ended B Scheme is well understood by the
investment community for being distributed into many countries
around the world including Australia, Hong Kong, Ireland, the
Netherlands, South Africa, Sweden and Switzerland.
There is a truly global client base, with promoters such as
Ashmore, BlueCrest, Citadel, Credit Suisse, FF&P, Investec,
Man Group, Marlborough, M&G, Schroders and Unigestion
utilising Guernsey open-ended investment platforms.
The environment in Guernsey is particularly conducive for
establishing and servicing open-ended funds: close proximity to
both the UK and Europe but outside of the EU; political and
economic stability with no external debt; an OECD 'white
list' jurisdiction which has signed up to US and UK FATCA and
the OECD's Common Reporting Standard; experienced managers,
administrators, custodians and support services; flexible company
law; access to major stock exchanges; a competitive tax regime and
high standards of corporate governance.
Guernsey has a regulatory regime which provides a modern
statutory structure for appropriate investor protection. Rules are
relatively non-prescriptive (e.g. flexible investment or leverage
parameters) and instead rely on disclosure, with lighter touch
regulation for experienced investors. A fast-track approval process
is available, the regulator is open to applications from new
promoters and prime brokers can be located either in Guernsey or
Guernsey funds continue to be distributed to both European and
non-European countries: a long-standing flexible managers not
requiring an AIFMD compliant fund, including EU National Private
Placement (NPP) regimes; and there is an opt-in regime which is
fully AIFMD compliant. This provides a set of options which can be
utilised according to specific circumstances. The choice is solely
a commercial decision driven by distribution policies and
full-blown AIFMD compliance should only be sought if there are
particular reasons to do so. Figures from the Guernsey regulator
demonstrate the continued popularity of the Guernsey NPP route
Funds not solely focused on Europe should consider parallel or
feeder investment structures whereby EU and non-EU business can be
separated to achieve cost efficiencies.
There is a range of professionals with in-depth expertise in
structuring, administering and advising on complex vehicles as well
as experience in portfolio and risk management. Some managers, such
as BlueCrest, have established their headquarter offices in
Guernsey. A strong pool of non-executive directors are held in high
esteem by the investment community with regard to the expertise,
knowledge and skills which they take to the Boards on which they
Quality of service in Guernsey is evidenced by the fact that
providers service $150bn of open-ended funds that are domiciled in
other jurisdictions, typically Cayman or Delaware, where there may
be local substance challenges.
Guernsey has more than 50 years' experience in global
cross-border fund structuring and distribution and that experience
is now helping it provide a fresh solution to meet the challenges
facing today's promoters of open-ended funds.
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