The 'Guernsey Private Equity 2011' special report comprises six separate articles listed below, these can be read individually or as a sequence.
By Simon Gray – From a jittery market environment plagued by investor fears over the creditworthiness of European sovereign debt, the solidity of banks and the possibility of double-dip recession to the uncertainty surrounding a raft of impending regulation on both sides of the Atlantic, the private equity industry is confronting multiple hurdles as it looks to bounce back from the effects of the 2008-09 financial crisis.
By Gavin Farrell – Guernsey has developed as a platform for the private equity world over the past two decades since it first stole a march on rival jurisdictions by offering a welcome to alternative investment products. In the intervening years the island has built up its experience and expertise in specialist private equity administration, but also a legal and regulatory environment for private equity funds, which continue to grow strongly despite the onset of the financial crisis.
For more than two and a half years the private equity sector has been examining how the European Union’s Directive on Alternative Investment Fund Managers will affect their operations in areas such as remuneration, leverage and transparency. But Aztec Group general counsel James Bermingham (pictured) argues that the way the directive is drafted may result in much private equity activity falling outside the scope of the legislation altogether.
By Andrew Boyce – Several headline factors will shape the short- to medium-term future of the private equity sector. Funds that had reached the end of their investment periods before the financial crisis have been unwilling or unable to exit investments as a result of the consequential hit on values. At the same time, funds launched just prior to the crisis have not yet been able to hit investment targets despite the end of their investment periods fast approaching.
By Simon Gray – With the private equity industry yet to recover fully from the market convulsions of 2008 and 2009 and economic concerns still weighing heavily on investment decisions, the outlook is uncertain for service providers to the sector, who have seen new business flows slacken since the onset of the crisis. However, there is cautious confidence throughout Guernsey firms that the island’s embedded experience in a field that favours specialist expertise will serve it well in a difficult environment.
By Caroline Chan – Guernsey had 106 listed vehicles on the combined London Stock Exchange markets at the end of 2010, with listed closed-ended private equity, property and infrastructure funds particularly popular. The island had the highest number of London-listed vehicles of any offshore jurisdiction; its nearest competitor had 66.