Guernsey is continuing to exploit its appeal as a centre for fund administration, according to financial sector promotional body GuernseyFinance, following the announcement by the industry regulator t
Guernsey is continuing to exploit its appeal as a centre for fund administration, according to financial sector promotional body GuernseyFinance, following the announcement by the industry regulator that funds under management and administration grew by more than 10 per cent in the three months to June.
According to the Guernsey Financial Services Commission, the net assets of funds administered in the island grew by GBP15.2bn over the quarter to GBP155.6bn at the end of June, an increase of 10.8 per cent. The increase over the 12 months since June 2006 was GBP32.3bn or 34.8 per cent.
The closed-ended fund sector saw continued growth with increases of GBP5.9bn (10.6 per cent) in the quarter and GBP23.7bn (61.3 per cent) over the previous 12 months to a total of GBP62.4bn.
Guernsey domiciled open-ended funds grew by GBP3.9bn (6.6 per cent) over the three-month period and by GBP8.6bn (15.9 per cent) over the year from June 2006 to a virtually identical total of GBP62.6bn.
Non-Guernsey schemes for which some aspect of management or administration is carried out on the island grew by GBP5.4bn (21.2 per cent) over the quarter and by GBP8.5bn (38.2 per cent) over the year to set a new record of GBP30.7bn.
Almost half of all non-Guernsey schemes (48 per cent) are domiciled in the Cayman Islands, another 28 per cent in the British Virgin Islands and 9 per cent in Bermuda, with smaller numbers incorporated in Luxembourg, the US, UK, Isle of Man, Ireland, Mauritius and Anguilla.
According to the commission, 35 qualifying investor funds were approved in the 12 months to June 30, bringing the total number of QIF vehicles to receive consent or approval to 123 since the regime was launched in February 2005.
A total of 37 registered closed-ended investment funds had received consent since the launch of that regime on February 1, and since the end of June a further 10 registered closed-ended funds have received consent from the regulator.
‘These figures are evidence of continuing confidence in the Guernsey investment fund sector,’ says Peter Moffatt, director of investment business at the Guernsey Financial Services Commission. ‘We recognise, of course, that market conditions have changed radically since they were collated.
‘As the figures show, the qualifying investor fund regime introduced in February 2005 continues to be popular. Following its success in the first quarter, the registered closed-ended investment fund regime, introduced in February 2007, has continued to be used extensively by local fund administrators to service the needs of their clients.’
Guernsey fund industry experts point out that the commission’s figures do not necessarily reflect the full extent of the industry’s growth. ‘In the private equity sector, where we are especially active as lawyers and administrators, the figures do not show that committed capital in fact far exceeds the figures provided by the commission, which only include drawn down capital,’ says Ogier partner Roger Le Tissier.
‘For example, Coller International Partners V, for whom we act, has closed its most recent fund at USD5bn but has yet to draw down the majority of the commitments. The success story is even greater than the figures suggest.’
John Le Prevost, chief executive of Anson Fund Managers, says: ‘The latest figures further support the increasing recognition of Guernsey as a preferred domicile of choice for new fund product.
‘Over the past year we have seen a large increase in new sponsors coming from Asia and the Americas to launch funds in Guernsey. Many of these are prime names in their home country, and such increasing global recognition of Guernsey bodes well for the sector in the years ahead.’
Adds GuernseyFinance chief executive Peter Niven: ‘Market conditions have become more challenging since the end of June, but these statistics bear out that Guernsey is in a very strong, competitive position to continue to service fund business to the very highest professional standards.’