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In the first week of June a delegation from Guernsey
visited New York and Boston to explore the opportunities for the
Island to attract more US private equity business. Here, Peter
Niven, Chief Executive of Guernsey Finance – the
promotional agency for the Island's finance industry, explains
the rationale behind the visit, how the team fared and what happens
next.
During the last decade Guernsey has built a strong reputation as
a leading jurisdiction for domiciling and servicing private equity
funds. In that time we have seen a significant number of the major
UK and European private equity houses choosing to use Guernsey and,
indeed, some of those, such as Terra Firma, Permira and Apax, have
established their own operations in the Island.
Several US private equity managers have also chosen Guernsey,
including Kohlberg Kravis Roberts & Co. whose KKR Private
Equity Investors LP raised more than US$5 billion before listing on
Euronext Amsterdam in 2006. This was extremely significant in
raising awareness among US managers of Guernsey's capacity to
act as a gateway to list vehicles on European stock exchanges.
The last time Guernsey Finance visited New York to promote the
Island's offering was at the outset of the global financial
crisis and since then, the gloomy worldwide economic conditions
have depressed the markets and perhaps, no more so than the US
private equity industry. However, it seems as if the (slow but
steady) US economic recovery is filtering through to the private
equity sector. Certainly, in Guernsey, we are seeing renewed
interest from US managers in what we can offer as a gateway to
accessing capital from European markets.
At the same time, our latest fund statistics also show that
there were a significant number of new fund launches in the first
quarter of this year in Guernsey, where the total value of funds
business stands at US$425 billion (up 3% in the first three months
of 2012) and private equity comprises nearly US$125 billion*. Yet,
it is important that we do not rest on our laurels and simply rely
on business coming from our traditional markets of the UK and
Europe, especially with the ongoing uncertainty in the
Eurozone.
Therefore, we decided that we would look to capitalise on the
renewed interest from the US by taking a team of local
practitioners to meet with private equity managers and their
advisers in both New York and Boston. At the start of June I
travelled to New York with Gavin Farrell, from law firm Mourant
Ozannes and Tony Mancini from KPMG in Guernsey, for a series of
meetings with managers, lawyers and accountants. We then moved on
to Boston where we were joined by Ray Page and Julian Carey, both
from International Administration Group (IAG), for a further series
of meetings and also to exhibit at SuperReturn USA.
We were very well received and there was significant interest in
what Guernsey can offer as a private equity domicile. As well as
being able to reach new contacts, we were also able to touch base
with some managers who already use Guernsey and there is a feeling
that if harnessed appropriately then their positive attitudes could
prove a real force for good in convincing their peers about the
experience and expertise we have in catering for private equity
business.
It is clear that we need to be highlighting our private equity
credentials to managers and their advisers in the US on a regular
basis. We see this visit as the first step in a drive to attract
more private equity business from the US. We are already making
plans to return to New York and Boston and I also expect us to be
visiting other major private equity hubs as well during future
visits to the US.
*Figures from the Guernsey Financial Services Commission (GFSC)
for the period to the end of March 2012.
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