Ogier's William Simpson and Val Rouse outline some of
Guernsey's fund structures and how the evolving regulatory
landscape maintains Guernsey as a premier domicile.
HFMWeek (HFM): What are the different fund types that have been
set up in Guernsey?
William Simpson and Val Rouse (WS&VR):
Guernsey, as an established off shore jurisdiction, continuesto be
a popular home for all fund types, including manyopen-ended funds
as well as for the administration of non-Guernsey funds.
Guernsey's closed-ended investment fundsare currently a
particular growth area in terms of recent setupsand new enquiries.
Examples of recent closed-endedfund structures advised on by Ogier
include a fourth Guernseyfund for Mid Europa investing in Central
and EasternEurope and Turkey, which closed at €800m, a London
mainmarket listed infrastructure fund for Sequoia raising
£150m,and a fund raising $500m investing in a pan-African
portfolioof private equity investments for Development
Partners.Ogier is also seeing many more enquiries and has
receivedinstructions on various new funds for launch later this
year,including debt funds and London main market listings.
HFM: What are the advantages of these fund structures?
WS&VR: Guernsey has always offered a very
flexible open-ended funds' regime, which lends itself to all
types of fund structures, including hedge funds. The lack of
restriction on investment parameters (other than a requirement for
the spread of risk) means that many different types of open ended
funds may be quite easily established in Guernsey. There is also
flexibility in the closed-ended fund regime. A Guernsey
closed-ended investment fund may be either registered or
authorised. The main difference can be found in the application
process, where a lighter regulatory touch applies. A registered
fund may normally be established within a shorter overall timetable
than an authorised fund.
HFM: Why have these funds found a home in Guernsey?
WS&VR: Guernsey has modern and up-to-date
legislation to govern corporate and limited partnership vehicles.
Authorised and registered closed-ended funds established as
Guernsey limited companies have proved very suitable for the UK
listed market. Guernsey remains the preferred jurisdiction,
excluding the UK, for the listing of vehicles of the London Stock
Exchange. Figures to the end of November 2014 show 119
Guernsey-incorporated entities listed on its various markets. A
structure including one or more Guernsey limited partnership is
also well suited for private equity fund purposes. Guernsey
licensed administrators have experience of and are well placed to
administer general partner and carry vehicles associated with such
structures. Ogier can also assist with licence applications and all
Guernsey related matters.
HFM: How has the Guernsey regulatory system developed to
accommodate these fund structures?
WS&VR: The existing flexibility within the
Guernsey regulatory system means that a wide range of fund
structures can be accommodated, without (unlike other
jurisdictions) the need to amend legislation and/or design bespoke
regimes. That said, the overall legal and regulatory framework
remains under constant review and improvements continue to be made
from time to time. For example, a recent change to the rules
governing registered funds means that such schemes may now be
offered directly to the public in Guernsey. It is understood that
this will assist with the Volcker Rule, which would appear to
prevent US banking entities from sponsoring, investing in or having
certain relationships with a fund that could not be sold to
investors in its home jurisdiction.
HFM: Has Guernsey's non-EU stance played a part in which
fund types it attracts?
WS&VR: Guernsey took a very pro-active
approach to the introduction of the AIFMD. The marketing of
Guernsey funds under national private placement regimes is
generally working well in most European countries. However, it must
be remembered that the AIFMD will not apply to all Guernsey funds.
A Guernsey fund which is not marketed in the EU will fall outside
of the Directive. Certain fund structures advised on by Ogier fall
into this category. Conversely, Ogier works closely with EU onshore
counsel in the case of Guernsey funds which are to be marketed in
the EU and can advise on the application of the Guernsey AIFMD
HFM: Do you see new fund types being introduced in the future.
If so, which ones and why?
WS&VR: Possibly: Guernsey continues to keep
its regulatory regime under review. However, the existing
regulatory regime remains flexible enough both to permit innovative
solutions and to accommodate a wide range of fund types.
An original version of this article was published
Guernsey supplement, April 2015.
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).