Originally Published in Investor Services Journal, July 2007
In the past few weeks Guernsey’s fund industry has received two major boosts: the value of funds under management and administration in the Island reached a new high of more than £140bn; and Citco, one of the leading providers of hedge fund services in the world, announced that it is to start operating out of Guernsey.
Citco Fund Services has been licensed by the Guernsey Financial Services Commission (GFSC) to provide fund administration in the Island. Citco has over 30 years experience in hedge fund administration and currently administers more than 2,000 funds with net assets in excess of $500bn, including five of the world’s ten largest hedge funds.
The addition of Guernsey to the Citco service offering reflects the increasing importance of the Island as a domicile for investment funds. William Keunen, Director of Citco Fund Services, has said: "Guernsey is an established fund domicile with an internationally recognised but pragmatic regulatory environment which we believe will continue to make it a jurisdiction of choice for many hedge funds and funds of funds operators."
The decision by such a world-renowned hedge fund services provider as Citco to establish a presence in Guernsey is a real boost for the Island’s funds offering: on the one hand, it adds yet another facet to our administrative capabilities that should prove particularly attractive to promoters and sponsors; and on the other, it is an endorsement of the existing environment which is attracting record flows of business.
Indeed, figures released by the GFSC show that the value of funds under management and administration reached £140.4bn at the end of March, an increase of £10.2bn (7.8%) from the £130.2bn recorded at the end of 2006 – the previous high – and a rise of £29bn (26%) year on year.
The introduction of a registered closed-ended funds regime has helped propel the Island to the new record. It has been operating since 1 February and 8 such funds received consent in the two months to 31 March, with a further 24 following suit, taking the total to 32 in the first five months.
The registered regime is a development of the Qualifying Investor Funds (QIFs) regime that was introduced early in 2005 to significantly reduce the authorisation times for experienced investors. It has its roots in the Harwood Report, which made a series of recommendations to enhance the environment for conducting funds business in the Island and the remainder of which will come on-stream later in 2007 and into early 2008.
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