Sinéad Leddy discusses a recent KPMG report that
showcases Guernsey's role as a facilitator of global capital
flows and the benefits that this brings to Europe.
A new report published by KPMG has revealed the extent to which
Guernsey's funds industry facilitates the flow of capital
globally, including £105bn of investment in Europe.
The report says that: "Guernsey is used as a conduit to
facilitate the raising of capital from investors in different
countries and subsequently to facilitate the deployment of this
capital into global assets."
It says that of the £155bn of funds under administration
(excluding fund of funds) in Guernsey, 46% of the assets are
deployed into Europe (excluding the UK), 32% are deployed outside
Europe and 22% are deployed specifically into the UK. It adds that
50% of investors are located outside Europe, which demonstrates
that global investors are comfortable using Guernsey structures.
The key reason identified for this is the Island being well
respected and transparent with an established regulatory track
The report concludes that "... these statistics support the
notion that Guernsey is utilised as a facilitator of global
investment and, as a transparent jurisdiction, can play a major
role as cross-border investment continues to grow."
ECONOMIC BENEFITS TO EUROPE
KPMG go on to state that Guernsey's role in this flow of
global capital means that it is a conduit for £25bn of inward
investment into the UK from overseas investors and predominantly
non-European investors. Furthermore, non-European investors in
Guernsey funds contribute £51bn of investment to assets
deployed in Europe as a whole. In addition, there is £54bn of
investment in Guernsey funds from European investors that is
deployed in countries that are different from the underlying
investor country, thus demonstrating inward investment into
individual European countries.
ALTERNATIVE ASSET HUB
KPMG's research indicates Guernsey is a hub for alternative
investment assets. Private equity is the dominant sector in the
Guernsey funds market with 70% of all assets being deployed into
this sector, predominantly located in the UK and wider Europe.
Infrastructure and property each account for 8% of the market.
Infrastructure assets are predominantly located either in the UK
(42%) or outside of Europe (55%). Property assets are predominantly
located in the UK (37%) or wider Europe (53%).
One of Guernsey's key strengths in facilitating global
investment is the ability for Guernsey entities to quickly and
easily access a wide range of international capital markets.
This includes not just the locally based Channel Islands
Securities Exchange (CISE) but also the exchanges in Ireland, Paris, Amsterdam, Frankfurt, New York, Toronto,
Johannesburg, Australia and Hong Kong, as well as the London Stock
Indeed, there are more Guernsey-incorporated companies listed on
the LSE than from any other jurisdiction except the UK. Many of these of are entities established for cross-border
investment, including a significant number of funds.
The KPMG report showcases the way in which Guernsey acts as a
facilitator of global capital flows and the benefits that this
brings to Europe, and especially the UK, through investment into
predominantly private equity and the development of property and
Fund managers and their investors should remember that a key
reason for Guernsey's position is its ability to offer quick
and easy access to the international capital markets. The Island is
well respected for its transparency, proven regulatory track record
and expertise in listing entities of a wide range of stock
Observing a recent discussion between the children of a successful entrepreneur, I was reminded once again of the potential impact of family members being provided with differing information about the family enterprise.
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