Originally published in The Fund Business,
Guernsey Supplement, February 2008
Guernsey has a rich heritage of some 40 years in the
investment funds business. Over these years the
Island's funds industry has changed markedly evolving
from a sector dominated in the 1980s and 1990s by open-ended
equity funds to one in which there has been a significant
increase in closed-ended alternatives, such as property,
private equity, funds of hedge funds and the emergence and
increase in popularity of more esoteric asset classes such as
fine wine, fine art and timber.
There has also been major growth, particularly in recent
years and by the end of September 2007 there were 1,063 funds
under management and administration in the Island with a total
value of £164.5bn up 6% during the previous quarter and
36.5% year on year. While activity is not quite as frenetic as
pre-'credit crunch', business flows have
remained more than robust. What I hear is that, at least for
the first half of 2008, there is a strong pipeline of business
coming into the Island and there are other substantial flows
out there to be won. That is why we are still very much active
in promoting Guernsey as the centre of choice for leading fund
promoters and sponsors.
They recognise that the experience of the past four decades
has helped build on the Island's hallmarks of
innovation and professionalism to grow an industry with a
wealth of expertise and a first class infrastructure. Indeed,
today, Guernsey plays host to an extensive array of investment
businesses, including investment advisers, stockbrokers and
more than 50 fund managers, custodians and administrators, who
in combination offer a range of products and services for both
retail and institutional investors from the general to the more
World-renowned investment management companies have the
operation of their investment funds facilitated in Guernsey,
where there is high quality legal, accounting, valuation,
registrar, company secretarial and audit services for the
structuring, launch and administration of funds.
Guernsey's administrative heritage is increasingly
being complemented not just by the availability of custody
services but also fund managers, ranging from larger
organisations to more boutique operators.
The Island's success is built on the fact that, in
addition to what I have already outlined, it also boasts: a
range of flexible investment vehicles such as unit trusts,
limited partnerships, protected cell companies (PCCs) and
incorporated cell companies (ICCs); a fast-track route for fund
approvals; listings on the Amsterdam Euronext; the Channel
Island Stock Exchange (CISX), which is available for primary or
secondary listings; a competitive tax environment; an
experienced and qualified pool of non-executive directors; and
robust yet pragmatic regulation.
Guernsey's on-going development of the funds
environment keeps it at the forefront of international centres
despite the ever-increasing domicile competition that has also
been a feature of the past forty years. In fact, all the
ingredients are in place for Guernsey to maintain its position
as a jurisdiction where clients want to conduct business (and
keep coming back for more) long may that continue.
Many people are baffled by trusts, the purpose of which they don't fully comprehend. Some even regard them with suspicion, as tools of of opaque tax evasion strategies of a type favoured by wealthy individuals.
We were recently instructed by a Bank in relation to a regulatory matter. The Bank had made a suspicious activity report to the Financial Investigation Unit ("FIU") due to their concerns about the potential source of funds in an account.
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