Foreword
The UK's growth agenda demands bold action and a global outlook. These are qualities that Guernsey's financial services industry embodies and delivers as a proud member of the British Family. This report from Frontier Economics powerfully demonstrates the role Guernsey plays in supporting the UK's ambitions for strong, sustainable economic growth across every region of the nation.
Around £58 billion is invested into the UK on an ongoing basis, investing in UK businesses, infrastructure, housing and clean energy. Almost 90% of Guernsey domiciled funds AUM is sourced from non-UK investors, growing and supporting foreign investment into all four nations that comprise the UK, amplifying our ability to invest in areas that matter most.
Guernsey's investment into the UK is not only substantial, it is growing quickly. Since 2021, Guernsey-domiciled funds have grown their UK holdings at an average rate of 7% per year, approximately double the pace of broader foreign direct investment into the UK. If this growth continues, Guernsey's contribution to the country could exceed £80 billion by 2029 – an additional £23 billion which itself would be enough to satisfy the private financing needs of the UK Government's National Wealth Fund.
As this report sets out, Guernsey's financial ecosystem – which includes fund administration, investment management and The International Stock Exchange (TISE) supported by professional services such as legal and accountancy – offers speed to market, cost-efficiency and regulatory credibility. These are not just technical advantages: they make a material difference in supporting UK fund managers, investors and entrepreneurs to seize emerging opportunities and bring their ideas to life. In doing so, Guernsey bolsters the UK's own reputation and competitiveness as a world-leading hub for international finance.
But it is the reach of this impact that is most striking. In addition to large infrastructure projects in some of the larger cities – including Leeds, Manchester and Liverpool – investment also goes into wind farms in Aberdeenshire and Norfolk, into fibre connectivity in Lancashire, Lincolnshire, Shropshire, and Warwickshire, into student accommodation in Durham, into food technology companies in Birmingham, and Wind Energy sites across England, Scotland, Wales and Northern Ireland. Guernsey funds are enabling investment not just in the UK's traditional centres of capital, but in its towns and outer regions, across all four nations. These investments are driving productivity, unlocking innovation and creating jobs. They are contributing meaningfully to several of the UK Government's core growth pillars, including Investment, Infrastructure, Innovation, Net Zero and Place.
This report is a timely and evidence-led reminder of what is possible when longstanding financial and cultural relationships are nurtured and developed. The UK and Guernsey are stronger together. In the years ahead, deepening this partnership further – through sustained collaboration – can help the UK Government to deliver on its growth ambitions.
We are proud to share this report and look forward to working with colleagues across government, business and finance to realise the full potential and aspirations of the British Family.
Rupert Pleasant
CEO, Guernsey Finance
Executive Summary
- This report sets out the contribution made by Guernsey's investment and funds sector to the UK Government's growth ambitions. It also describes how Guernsey's funds ecosystem supports the UK's competitiveness in financial services.
- Guernsey-domiciled funds are a conduit through which billions of pounds of private finance flows into the UK. These funds hold finance from investors across the globe; almost 90% of Guernsey-domiciled funds' managed assets are from non-UK investors.
- Guernsey-domiciled funds often channel this finance towards UK investment projects, and held investment positions worth £58 billion in UK assets as of early 2024. Guernsey funds' UK investment position is growing at double the rate of the UK's overall foreign direct investment inflows position.
- Guernsey funds therefore represent a large, growing net inflow of private finance into the UK, which can be used to finance new UK investment projects. If this rate of growth is maintained, Guernsey funds will channel nearly £23 billion in new investment into the UK over the course of this parliamentary term.
- The UK Government has announced several investment-led growth programs in the areas of Investment, Infrastructure & Planning, Innovation, Net Zero and Place-based growth. Guernsey funds' potential additional finance of £23 billion to the UK could finance several Government programs in these areas. For example, that level of future investment would meet all £22 billion of private finance required by the UK National Wealth Fund, one of the Government's flagship programs to generate growth.
- Guernsey-domiciled funds will also contribute significantly to the Government's objective for place-based growth and development. This report presents case studies of Guernsey funds investment in infrastructure, housing and green energy across places such as Birmingham, Leeds, Manchester, Durham, Liverpool, and other UK nations.
- The long-standing relationships between UK fund promoters and investment managers and their Guernsey financial services counterparts is also a significant source of competitive advantage. These relationships enable UK investment managers to offer funds with a faster speed to market and cheaper administration costs. UK financial services firms also benefit from a deep pool of Guernsey funds infrastructure and expertise which has been developed and tailored to benefit UK firms for over 60 years. All of these advantages support the UK in maintaining its position as a leading hub for international private finance, and achieving future growth in its financial services sector.
1 Introduction
In this section we provide a summary of the objectives of our work and the ordering of remaining report sections. We also provide a glossary of key terms used throughout the report.
1.1 Background on Guernsey
Guernsey is part of the Channel Islands, situated off the Normandy coast of France. The Channel Islands have a unique relationship both with the British monarchy and the Westminster Government as 'Crown Dependencies'. They are self-governing, self-legislating, self-administering and self-financing but are loyal to the British Crown, with their courts subject to the decisions of the Judicial Committee of The Privy Council.3
Guernsey has developed into a leading independent finance centre, and is a specialist centre for investment fund business, particularly in alternative assets such as private equity and property. Guernsey's finance sector has a global reputation for quality, security, innovation, and meeting international standards.4 Guernsey works to meet international standards on transparency and information exchange and has been whitelisted by both the OECD and EU. In 2017, Guernsey confirmed its commitment to international tax co-operation by signing the OECD's Multilateral instrument to implement tax treaty related measures to combat Base Erosion and Profit Shifting and treaty abuse. Guernsey introduced economic substance legislation in 2019 to ensure that companies which are tax resident in Guernsey and undertaking specific activities can demonstrate substantial economic presence. In 2025, Guernsey achieved a strong outcome from its international MONEYVAL evaluation into its processes to combat financial crime5. In particular, Guernsey was one of only a few jurisdictions to achieve technical compliance for all 40 MONEYVAL recommendations. Following the evaluation, Guernsey has been placed into what is described as "regular followup", which is ultimately the core aim of all those jurisdictions evaluated. This secures the Bailiwick's position as one of the best, secure and safe jurisdictions in the world for financial services.
The finance sector is Guernsey's largest sector in terms of employment activity and earnings. The sector, including legal and accounting activity, adds in the region of £1.3 billion to the island's economy equating to 37% of the island's economic output.6 In addition to the contribution to the local economy, Guernsey's finance industry also provides significant benefits to the UK. Guernsey is the closest global finance centre to the UK and the two hubs enjoy a collaborative relationship. Stakeholders from the Guernsey sector work closely with a range of UK-based finance institutions including the British Private Equity & Venture Capital Association (BVCA), TheCityUK and the Association of Investment Companies (AIC).
The international context within which the UK economy operates is undergoing significant change. Examining the linkages between Guernsey's finance sector and the UK is vitally important. These UK-Guernsey linkages can play a key role in ensuring that the UK is able to meet high priority policy objectives relating to inclusive and sustainable economic growth.
1.2 Role of Guernsey Finance
Guernsey Finance is a joint industry and government initiative established to promote Guernsey's financial services sector internationally. Guernsey Finance conducts marketing, communications and business development on behalf of its members from Guernsey and overseas.7
Guernsey Finance Mission
To promote and connect Guernsey as a leading international finance centre in its chosen markets.
1.3 Purpose of this report
Frontier Economics was commissioned by Guernsey Finance to research the contribution of Guernsey's finance industry to UK economic growth. This report is a follow-up to the previous Frontier Economics' "Guernsey – Value to the UK" report.
This new report focuses on how Guernsey funds, investment managers and The International Stock Exchange could support the UK Government's growth agenda over the remainder of this parliamentary term. This also includes how Guernsey funds can support economic growth in regions across the UK.
1.4 Methodology
We have used a mixed methods approach, drawing on qualitative insights and complementary quantitative analysis. This approach allowed us to understand the multi-faceted links between Guernsey's finance sector and the UK and to quantify key aspects of this relationship. We used this approach in the previous Frontier Economics' "Guernsey – Value to the UK" report.
We gathered and aggregated a range of quantitative evidence to support our analysis. This consisted of: (1) contribution modelling of the potential additional financial flows from Guernsey funds into the UK, over the remainder of this Parliament; (2) trends in the supply of Guernsey investment into various UK assets; (3) key statistics on the additional UK demand for investment, related to the UK Government's growth agenda; and (4) key statistics on the number of UK issuers listing UK securities on The International Stock Exchange.
We have presented all of our evidence within an overarching conceptual framework that structures our conclusions. This report summarises all our findings.
Footnotes
3 https://commonslibrary.parliament.uk/research-briefings/cbp-8611/
4 https://www.gov.gg/financesector
5 https://www.gov.gg/bailiwick-moneyval-evaluation
6 https://www.gov.gg/CHttpHandler.ashx?id=182518&p=0
7 https://www.guernseyfinance.com/
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Originally published by Frontier Economics
For more information about Guernsey's finance industry please visit www.weareguernsey.com.
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