Guernsey has more than 50 years' experience of providing
financial services to clients from around the world.
With several hundred Guernsey service providers, supported by a
network of professional services, including global accountancy
practices and multijurisdictional law firms, there is significant
infrastructure and expertise available to service Chinese clients
who are seeking to invest into the United Kingdom (UK).
Chinese corporate entities can use Guernsey's offering in
two principal ways: to establish a Guernsey domiciled investment
fund which invests into the UK; and/or to establish a Guernsey
based entity to access UK capital markets.
Guernsey has an investment sector with almost US$0.5 trillion
worth of funds under management and administration. The Island has
a proven operating model where global investment houses use legally
robust and fiscally neutral structures, such as companies and
partnerships, to hold a wide range of assets spread around the
world. Guernsey specialises in domiciling and servicing
closed-ended funds investing into alternative asset classes, such
as private equity, real estate, (renewable) energy and
infrastructure focused on the UK market.
Due to the regulatory restrictions (including foreign exchange
restrictions), Chinese investors are usually not able to invest
offshore other than via the Qualified Domestic Institutional
Investors (QDII) regime.
However, the QDII investment funds are issued to the general
public and are not tailored to the needs of specific investors. The
Qualifying Domestic Limited Partnership regime provides a new
channel for Chinese domestic capital of institutional investors and
high net-worth individuals to be invested offshore.
Guernsey's reputation in the Chinese market is already
illustrated by the fact that it was home to the first ever Renminbi
focused bond fund which was established in 2007 as a protected cell
company by Stratton Street Capital. Using Guernsey also offers the
comfort that the Island's regulatory regime for investment
funds is familiar to the Chinese authorities. Guernsey's
financial services regulator, the Guernsey Financial Services
Commission, signed a Memorandum of Understanding (MoU) with the
China Securities Regulatory Commission (CSRC) in November 2013. In
addition, Guernsey has grown its links with both the Asset
Management Association of China (AMAC) and the China Association of
Private Equity (CAPE).
At the 6th Global Private Equity Forum in Beijing in December
2014, Mark Huntley, Managing Director of the Guernsey-headquartered
Heritage International Fund Managers Limited, was a panelist and
the only Western delegate on the GP/LP session.
He said: "Guernsey has recently entered into a number of
agreements and Memoranda of Understanding with various bodies in
China and is ideally placed to forge a long standing relationship
with the private equity industry in China." Heritage is
engaged with a number of Guernsey domiciled investment funds
investing into China and is also working with Chinese fund managers
developing fund and investment projects to tap into European
A major advantage of a Guernsey incorporated entity is that it
can be used to access global capital markets. Guernsey vehicles can
list on a range of different stock exchanges around the world, such
as Australia, Frankfurt, Paris and Toronto as well as Hong Kong,
the local Channel Islands Securities Exchange and the London Stock
Exchange (LSE). Indeed, Guernsey has more entities listed on the
LSE than any other jurisdiction globally, excluding the UK. Notable
Guernsey entities that listed on the LSE during 2014 included the
largest AIM listing of last year. The real estate focused Market
Tech Holdings Limited combined a £750 million initial public
offering with an oversubscribed placing which raised £100
million before expenses.
These type of developments further enhance Guernsey's
position as the leading jurisdiction for non-UK LSE listings,
particularly investment funds. It also showcases why Guernsey is
the ideal gateway for Chinese managers wanting to access capital to
invest into the UK
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