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Guernsey’s fund industry moves past the GBP250bn mark

Figures issued today show that the value of investment fund business in Guernsey grew by GBP14.3 billion (5.9%) during the final quarter of last year.

The increase represents the sixth consecutive quarter of growth and takes the net asset value of funds under management and administration in the Island to a new record high of GBP257.4 billion at the end of December 2010. This is a rise of GBP73.2 billion (39.7%) compared to the end of December 2009.

Peter Niven, Chief Executive of Guernsey Finance – the promotional agency for the Island’s finance industry – says: “It is extremely pleasing to see us move past the GBP250 billion mark. Our funds industry has bounced back very well from the global financial crisis and in recording six consecutive quarters of solid growth we have clearly outstripped some of our closest competitors. These are encouraging signs and we must look to capitalise on this momentum as we move through 2011.”

The new figures from the Guernsey Financial Services Commission (GFSC) show that Guernsey domiciled open-ended funds reached a net asset value of GBP57.9 billion at the end of December, which was a rise of GBP4.4 billion (8.2%) during the quarter and an increase of GBP7.2 billion (14.2%) year on year.

The Guernsey closed-ended sector was valued at GBP109.5 billion at the end of September – up GBP3.6 billion (3.4%) during the final three months of 2010 and rose GBP24.1 billion (28.2%) compared to twelve months previous.

Non-Guernsey schemes, where some aspect of management, administration or custody is carried out in the Island, increased by GBP6.3 billion (7.5%) during the quarter to reach GBP90 billion at the end of 2010, which is GBP41.9 billion (87.1%) higher than the value at the end of December 2009.

Mr Niven added: “It is also very positive to see strong the strong growth split across both Guernsey open and closed-ended funds and also the non-Guernsey schemes where some aspect of management, administration or custody is carried out in the Island.

“A significant increase in the number of these non-Guernsey funds entering into service level agreements with local licensees earlier in 2010 has notably boosted these figures but our Guernsey closed-ended funds also continue to attract a lot of interest, especially from promoters in alternative and niche asset classes and where there may also be a demand to raise money through capital markets by listing on a stock exchange.”

Mr Niven also believes that Guernsey has benefited from the greater certainty provided by the agreement for the framework of the EU’s Alternative Investment Fund Managers (AIFM) Directive. He adds that there is much work still to do in relation to the Directive but the continuing efforts of government, industry and regulator mean that Guernsey is well positioned.

“Guernsey’s funds industry has a very positive story to tell and we at Guernsey Finance are already working with the industry to try and harness these opportunities as we market the Island internationally during 2011,” add Mr Niven.

This week Guernsey Finance has been leading a delegation of Guernsey funds industry practitioners attending the private equity and venture capital conference SuperReturn International in Berlin and next week a separate delegation will be attending the world’s premier property conference, MIPIM in Cannes. Guernsey is also set to be represented at the British Venture Capital Association (BVCA) Russian Forum in London later this month as well as Legal Week’s Private Equity Forum during April. This year’s Guernsey Funds Forum will be held on Wednesday 11th May at the Grange St Paul’s Hotel in London and will again be hosted by Alastair Stewart as well as featuring leading industry speakers including Jon Moulton, founder of Better Capital.

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