Guernsey: Guernsey’s Biggest Asset

Last Updated: 2 July 2008
Article by Wayne Bulpitt

Most Read Contributor in Guernsey, September 2016

Originally published in the HFM Week, Guernsey Report, June 2008

Wayne Bulpitt of Active Group discusses the meaning of hedge funds as an asset class and current trends in the ever changing investment market

HFM Week (HFM): What are the different types of asset classes available in the current market?

Wayne Bulpitt (WB): Guernsey is currently host to a whole range of investment vehicles including traditional equity funds through to alternative asset classes, hedge funds with their various derivative fund guises, debt funds, guaranteed products, closed-ended private equity vehicles for venture capital, as well as other areas such as emerging markets and technology funds. Quite simply, if you wanted to set up a classic retail securities fund, a physical commodity fund, a property fund or a specialist private equity fund you could do them all from within Guernsey.

The island has a mature regulatory environment which has evolved to cater for the demands of sophisticated and alternative investment managers. Asset wise, there is not a lot we can't do in Guernsey in today's market. The regulators are open to new ideas, as long as the promoter is of the utmost standing, and the experience and quality of the commercial infrastructure in the island is an attractive appeal to those specialist promoters seeking to create the funds of their choice.

HFM: What asset classes are performing particularly well or poorly?

WB: I think a lot of firms have had to take a hard look at property recently. But diversity within this sector would appear to be easing the downside. International property offers opportunities in jurisdictions where the asset class is still on the up, and commercial property with its more consistent rental income stream has perhaps suffered less in general than residential property. Interestingly, we've been asked to establish more property funds during 2007 than any other single asset class.

In Guernsey as a whole, given the substantial growth that was the hallmark of 2006 and early 2007, it appeared that the island might not be able to sustain its pace, especially with the changes on the world economic scene, and most notably the subprime crisis. However, business flows have remained more than robust well into 2008. The value of total funds under management and administration reached £204bn by the end of March 2008, an increase of 14% over the quarter and 45% year-on-year. Traditional funds remain well represented but the major driver of growth has been the increases in alternatives such as funds of hedge funds, property and private equity, as well as more esoteric asset classes such as fine wine, fine art and timber.

Guernsey firms have responded to this growth in alternatives by developing their capabilities to facilitate the more difficult administration of these funds. Guernsey will continue to enhance its regulatory and legal framework to attract business. Certain hedge funds have struggled recently but I don't think that would come as a surprise to many considering the turbulence in the markets. It appears that the more aggressive and highly geared hedge funds have experienced these downturns. Indeed the more 'hedgelike' the hedge funds have behaved, the easier they will have sailed the current turbulence.

HFM: It has been said by many in the industry that hedge funds have become a separate asset class. Do you agree with that statement?

WB: I would agree that the rise of the hedge fund has driven publicity and availability surrounding these products to levels more attainable than ever. Many former 'traditional only' investors will now be considering, if not participating in, hedge funds; and the phrase 'hedge funds' is now a commonplace term in the dialogue of even the less sophisticated investors. Guernsey has experienced a rise in hedge funds with pure derivatives funds accounting for 7% of the total number of the classes within the 190 open-ended multi-class funds in Guernsey as at the end of 2007.

Even the definition of what a hedge fund is might be changing. It would appear that gone are the days when a hedge fund was purely a vehicle for the super rich, interested in alternative derivative products, with a lean to hedging against any potential losses in those derivatives. It seems far more commonplace now for hedge funds to be more aggressive, and less concerned with downsizing the risk of the bear market. I'd say that the hedge fund has certainly evolved into a mature standalone asset class and has a more than interesting future ahead of it; it has certainly found a good home in Guernsey.

It is worth also noting that the UCITS 3 directive allows hedge funds to be sold to the retail market in Europe within certain restrictions. The new UCITS rules allow the use of derivatives up to 100% and for more than just efficient portfolio management, as well as the use of leverage up to 200%. This demonstrates the continually evolving financial world market; today's alternative investments become tomorrow's retail fund.

HFM: Would you say firms are administering fewer fixed income assets due to the market conditions?

WB: Market conditions in the past three years have promoted growth in areas other than fixed income certainly. Guernsey is being approached with a good deal of interesting and alternative projects. I would say that this is indicative of the market conditions today and I would say it is a sign that the alternative has become more normal.

HFM: Is a particular asset class becoming more prominent in the current climate, and what are the more attractive asset classes to administer?

WB: From our perspective we would definitely say alternative assets and fund of hedge funds are forming the bulk of our new fund proposals. I believe a great deal of this has to do with Guernsey's growing reputation in dealing with hedge funds and alternative asset classes. It's becoming easier to establish such vehicles simply because the levels of familiarity, both on the regulatory side, as well as the professional services side of the industry, are increasing. This obviously allows a degree of experience which compliments the formation of such products.

Everyone likes to administer assets which go up in value. The levels of work involved are always greater with more complex assets, but businesses don't like to ever get left behind and the rise of the hedge fund and the alternative asset classes is something in which most of the players want to be involved.

HFM: What are the different charges for administering the various asset classes?

WB: Administration charges vary greatly with the complexity of the work being undertaken. Charges are driven by the availability of price sources and the ever increasing obligations of accounting standards. In some cases we have seen changes, especially following the impact of the credit crises, on fixed income funds, leading to increased charges for those asset classes as the process of valuing the portfolio becomes more complex.

For more information about Guernsey's finance industry please visit

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on

Click to Login as an existing user or Register so you can print this article.

In association with
Mondaq Advice Centre (MACs)
Up-coming Events Search
Font Size:
Mondaq on Twitter
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
Email Address
Company Name
Confirm Password
Mondaq Topics -- Select your Interests
 Law Performance
 Law Practice
 Media & IT
 Real Estate
 Wealth Mgt
Asia Pacific
European Union
Latin America
Middle East
United States
Worldwide Updates
Check to state you have read and
agree to our Terms and Conditions

Terms & Conditions and Privacy Statement (the Website) is owned and managed by Mondaq Ltd and as a user you are granted a non-exclusive, revocable license to access the Website under its terms and conditions of use. Your use of the Website constitutes your agreement to the following terms and conditions of use. Mondaq Ltd may terminate your use of the Website if you are in breach of these terms and conditions or if Mondaq Ltd decides to terminate your license of use for whatever reason.

Use of

You may use the Website but are required to register as a user if you wish to read the full text of the content and articles available (the Content). You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these terms & conditions or with the prior written consent of Mondaq Ltd. You may not use electronic or other means to extract details or information about’s content, users or contributors in order to offer them any services or products which compete directly or indirectly with Mondaq Ltd’s services and products.


Mondaq Ltd and/or its respective suppliers make no representations about the suitability of the information contained in the documents and related graphics published on this server for any purpose. All such documents and related graphics are provided "as is" without warranty of any kind. Mondaq Ltd and/or its respective suppliers hereby disclaim all warranties and conditions with regard to this information, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. In no event shall Mondaq Ltd and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use or performance of information available from this server.

The documents and related graphics published on this server could include technical inaccuracies or typographical errors. Changes are periodically added to the information herein. Mondaq Ltd and/or its respective suppliers may make improvements and/or changes in the product(s) and/or the program(s) described herein at any time.


Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:

  • To allow you to personalize the Mondaq websites you are visiting.
  • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our information providers who provide information free for your use.

Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.

If you do not want us to provide your name and email address you may opt out by clicking here .

If you do not wish to receive any future announcements of products and services offered by Mondaq by clicking here .

Information Collection and Use

We require site users to register with Mondaq (and its affiliate sites) to view the free information on the site. We also collect information from our users at several different points on the websites: this is so that we can customise the sites according to individual usage, provide 'session-aware' functionality, and ensure that content is acquired and developed appropriately. This gives us an overall picture of our user profiles, which in turn shows to our Editorial Contributors the type of person they are reaching by posting articles on Mondaq (and its affiliate sites) – meaning more free content for registered users.

We are only able to provide the material on the Mondaq (and its affiliate sites) site free to site visitors because we can pass on information about the pages that users are viewing and the personal information users provide to us (e.g. email addresses) to reputable contributing firms such as law firms who author those pages. We do not sell or rent information to anyone else other than the authors of those pages, who may change from time to time. Should you wish us not to disclose your details to any of these parties, please tick the box above or tick the box marked "Opt out of Registration Information Disclosure" on the Your Profile page. We and our author organisations may only contact you via email or other means if you allow us to do so. Users can opt out of contact when they register on the site, or send an email to with “no disclosure” in the subject heading

Mondaq News Alerts

In order to receive Mondaq News Alerts, users have to complete a separate registration form. This is a personalised service where users choose regions and topics of interest and we send it only to those users who have requested it. Users can stop receiving these Alerts by going to the Mondaq News Alerts page and deselecting all interest areas. In the same way users can amend their personal preferences to add or remove subject areas.


A cookie is a small text file written to a user’s hard drive that contains an identifying user number. The cookies do not contain any personal information about users. We use the cookie so users do not have to log in every time they use the service and the cookie will automatically expire if you do not visit the Mondaq website (or its affiliate sites) for 12 months. We also use the cookie to personalise a user's experience of the site (for example to show information specific to a user's region). As the Mondaq sites are fully personalised and cookies are essential to its core technology the site will function unpredictably with browsers that do not support cookies - or where cookies are disabled (in these circumstances we advise you to attempt to locate the information you require elsewhere on the web). However if you are concerned about the presence of a Mondaq cookie on your machine you can also choose to expire the cookie immediately (remove it) by selecting the 'Log Off' menu option as the last thing you do when you use the site.

Some of our business partners may use cookies on our site (for example, advertisers). However, we have no access to or control over these cookies and we are not aware of any at present that do so.

Log Files

We use IP addresses to analyse trends, administer the site, track movement, and gather broad demographic information for aggregate use. IP addresses are not linked to personally identifiable information.


This web site contains links to other sites. Please be aware that Mondaq (or its affiliate sites) are not responsible for the privacy practices of such other sites. We encourage our users to be aware when they leave our site and to read the privacy statements of these third party sites. This privacy statement applies solely to information collected by this Web site.

Surveys & Contests

From time-to-time our site requests information from users via surveys or contests. Participation in these surveys or contests is completely voluntary and the user therefore has a choice whether or not to disclose any information requested. Information requested may include contact information (such as name and delivery address), and demographic information (such as postcode, age level). Contact information will be used to notify the winners and award prizes. Survey information will be used for purposes of monitoring or improving the functionality of the site.


If a user elects to use our referral service for informing a friend about our site, we ask them for the friend’s name and email address. Mondaq stores this information and may contact the friend to invite them to register with Mondaq, but they will not be contacted more than once. The friend may contact Mondaq to request the removal of this information from our database.


This website takes every reasonable precaution to protect our users’ information. When users submit sensitive information via the website, your information is protected using firewalls and other security technology. If you have any questions about the security at our website, you can send an email to

Correcting/Updating Personal Information

If a user’s personally identifiable information changes (such as postcode), or if a user no longer desires our service, we will endeavour to provide a way to correct, update or remove that user’s personal data provided to us. This can usually be done at the “Your Profile” page or by sending an email to

Notification of Changes

If we decide to change our Terms & Conditions or Privacy Policy, we will post those changes on our site so our users are always aware of what information we collect, how we use it, and under what circumstances, if any, we disclose it. If at any point we decide to use personally identifiable information in a manner different from that stated at the time it was collected, we will notify users by way of an email. Users will have a choice as to whether or not we use their information in this different manner. We will use information in accordance with the privacy policy under which the information was collected.

How to contact Mondaq

You can contact us with comments or queries at

If for some reason you believe Mondaq Ltd. has not adhered to these principles, please notify us by e-mail at and we will use commercially reasonable efforts to determine and correct the problem promptly.