Guernsey funds attracting increasing PE investment from US
Investment flows between Guernsey and the United States are growing, according to new research commissioned by the island’s government.
Guernsey-domiciled funds saw a capital flow of GBP43 billion into the US in mid-2019, with a third of that figure originating in that country. More than two-thirds of that figure was invested in private equity. US investors backed Guernsey-domiciled funds with GBP43.6 billion, more than GBP33 billion of which was invested globally, particularly Europe.
In mid-2019 the net asset value of Guernsey-domiciled funds under management and administration in Guernsey was GBP227.7 billion.
Rupert Pleasant, Chief Executive of Guernsey Finance, says: “Guernsey has successfully attracted USA-based investors into our private equity funds. Some 95 per cent of all investment from the US into Guernsey funds goes into private equity, which is by far the largest share going into the sector from any single jurisdiction.
“Guernsey has proved to be a simple route for US investors to access European and UK markets, attracted by our time zone, range of structures and ease of accessing European markets through the national private placement regime.
“Our industry has regularly cited the US as an attractive potential market for further growth, given the scale of investments sourced there, and it will continue to be an increasingly important part of our funds sector’s investor base.”
Guernsey is ideally positioned to service the international nature of capital flows, with global investors reaching opportunities all around the world through Guernsey-domiciled funds, and these funds in turn delivering economic benefits to other jurisdictions both from inflows of capital and returns on assets.
Guernsey funds are highly international in nature. The vast majority receive capital from, or invest into, more than one jurisdiction. Fewer than 10 per cent of all funds are limited to just one jurisdiction.
Deputy Charles Parkinson, president of the States of Guernsey’s Committee for Economic Development, which commissioned the report to analyse the global economic benefits of the Guernsey funds sector from Frontier Economics, says: “This report identifies the vital importance, and economic benefits, of Guernsey’s funds sector, including to the UK, continental Europe and the Rest of the World.
“The key economic contribution of the Guernsey funds industry is being a conduit for international investments, which combine funds from multiple jurisdictions and invest assets into diverse geographic areas, helping to connect investors with profitable overseas investments from all over the world.”
Guernsey, the global funds specialist, is Europe’s leading market for private equity. It is also the top overseas jurisdiction for listings on the London Stock Exchange; a leading conduit for overseas investment into the UK, from European and international investors; and a primary access point for UK investors into global assets.