This article was originally published on 7 January
The value of private equity
funds in Guernsey rose by 9% in the third quarter of 2007.
Figures from the Guernsey
Financial Services Commission (GFSC) show that by the end of
September 2007 there were 226 such funds with a total value of
£28.4bn up £8bn (40%) in the first nine months of
2007 and 2.4bn (9%) during the third quarter alone in spite of
the credit crunch.
"These statistics are
particularly impressive given the economic climate during the
period. As such they illustrate how Guernseys vast private
equity experience and expertise is gaining ever-increasing
recognition from fund sponsors and promoters across the
world," said Peter Niven, Chief Executive of Guernsey
Finance the promotional agency for the Islands finance
These results follow from a
trebling in the value of Guernsey private equity funds between
the end of 2002 and the end of 2006.
The excellent figures have also
been backed up by third-party endorsements: leading City of
London lawyer, Bridget Barker of Macfarlanes, has asserted that
Guernsey is "the jurisdiction of choice for private
equity"; and Jon Moulton, Founder and Managing Partner of
Alchemy Partners who now lives in Guernsey has said that the
Island is "a terrific place in which to do
In addition, leading private
equity firm Terra Firma has announced that early in 2008 it is
opening an office in the Island.
These ringing endorsements come
on the back of Guernsey listed fund transaction, KKR Private
Equity Investors LP, from Kohlberg Kravis Roberts & Co,
raising more than US$5bn before being launched on Euronext
Amsterdam. It subsequently won Equity Deal of the Year at last
years International Financial Law Review (IFLR) European
Following on from KKR there have
been other notable Guernsey private equity funds, including the
largest central European buyout fund in excess of ¬1bn Mid
Europa III LP; Valdivia Private Equity Fund; Energy Ventures
III; AA Development Capital India Fund a joint venture between
Ashmore and Alchemy; and EQT V Limited (Clifford Chance) which
Mr Niven added: "This body
of evidence is just the tip of the iceberg but it clearly
illustrates Guernseys credentials as a jurisdiction of choice
for private equity the Island is a private equity success
Mike de Haaff, chairman of the
Guernsey Investment Funds Association (GIFA), said: "Even
putting aside the tax neutrality of the Island, our success in
private equity is down to the intellectual property that has
built up, the experience and infrastructure now on the Island
in not only setting up these products but also in their
administration. Guernsey has a long-established expertise in
"The majority of the
business still comes through lawyers in London and it is a
known fact that people come to Guernsey for private equity.
Word of mouth is a big factor in the relatively small private
equity community. Its recognition that we have everything in
place and are well placed to set up these products.
"Also in the private equity
arena, as with many other products now, management control
issues and corporate governance are more to the fore and we are
very conveniently located for directors to get on an aircraft
to Guernsey for board meetings on the Island."
Overall fund business in
Guernsey grew by £8.9bn (5.7%) in the three months to the
end of September despite significant market turbulence during
the quarter. That took the total value of funds under
management and administration to a new high of £164.5bn
an increase of £44bn (36.5%) year on year.
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