The adverse performance of the global markets is the primary
reason that the value of Guernsey funds fell by £1bn (0.5%)
during the final quarter of last year.
This change took the total value of funds under management and
administration to £200.4bn at the end of 2008. It represents
an increase of £22.2bn (12.5%) year on year.
Peter Niven, Chief Executive of Guernsey Finance – the
promotional agency for the Island's finance industry, said:
"Global market conditions meant it was inevitable that we
would see an overall reduction in the value of our business during
the fourth quarter. We were fortunate that it was only a decrease
of 0.5% and this demonstrates the resilience of our funds sector
but clearly there will be further falls until market confidence
returns, which is unlikely to be before the end of 2009."
Guernsey open-ended funds fell in value by £2.1bn (3.2%)
over the quarter to reach £63.6bn at the end of the year
– a decrease of £5.6bn (8.1%) since the end of
The Guernsey closed-end fund sector grew by £5.6bn (6.5%)
over the quarter to reach £91.5bn at the end of December 2008
– up £15.1bn (19.8%) from 12 months previously.
Non-Guernsey schemes, for which some aspect of management and
administration is carried out in the Island, decreased by
£4.5bn (9%) over the quarter to leave their value at
£45.3bn at the turn of the year. This figure is an increase
of £12.7bn (39%) since 31 December 2007.
Mr Niven added: "We may have seen an overall decrease in
asset values but in fact looking more closely you can see that
there is continue growth in the closed-ended sector. This is where
the principal strength of our business is now and the area that we
are most heavily marketing and promoting Guernsey as a funds
In recent months the Island has made several legislative
amendments related to funds business and introduced a new set of
The main result is that now both Guernsey open and closed-ended
funds can be established as authorised or registered funds.
Authorised funds are regulated by the Guernsey Financial Services
Commission (GFSC) and subject to closer supervision than registered
schemes, which are not authorised by the GFSC.
These changes and their implications will be explored in more
detail at a masterclass, entitled 'Guernsey's new fund
regime under the microscope – an exceptional regime for
exceptional times', which takes place from 5pm on Thursday 5
March at the America Conference Centre in London.
Probably the most significant change from previous practice in Guernsey law under the Companies (Guernsey) Law 2008, which came into effect on the 1 July 2008, was the consignment to history of the concept of capital maintenance, which was discarded in favour of a solvency model as the basis of a company’s ability to pay distributions and dividends.
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