New funds business boosts the local market by 6.5%

There were fewer new funds and sub-funds launched in the island during the year, compared to the previous 12 months, but the value to the sector was double that achieved in 2022, at $33.4bn. Two large funds launched during the year with a cumulative asset value of $22.6bn.

With 30 funds and sub-funds migrating to the island over the period, valued together at more than $1.1bn, the total value of new business was $34.6bn, sourced from more than 100 funds and sub-funds.

The market was generally static over the period, reported independent fund research company, Monterey Insight. Fund assets serviced in the island were generally static year-on-year at $517bn, which represented a 2.4% drop in sterling values at £407.7bn.

‘Despite the significant range of political and economic uncertainty in 2023, Guernsey has shown resilience compared to other markets that have been hit harder by the current climate,’ said Karine Pacary, managing director of Monterey Insight.

‘Keeping the same trend as last year, over 20 promoters chose Guernsey to set up their funds, and private equity funds continue to be a strong performer and contributor to the Guernsey fund industry.

‘The number of private equity funds increased by 6.8% and their asset value increased by 2.1% overall. The increase in assets reached 6.8% if we only look at the Guernsey-based funds.

‘Including domiciled and serviced funds, private debt also shows great performance with an increase in the number of funds of 37.5%, and an increase in asset value of 52.7%.’

Private equity continues to dominate the local market, with serviced funds valued at $387.9bn, followed by alternative investments at $61.2bn.

In Guernsey-domiciled funds, the private equity and venture capital sector accounts for $311.7bn.

Green funds saw a 2.1% increase in asset value, rising to $7.2bn in regulated green funds, with a further $6.9bn in sustainable and ESG funds.

The Monterey Insight report also ranks top-performing administrators, custodians, transfer agents, auditors and legal advisers.

‘We are confident that Guernsey, with its robust regulatory environment, appropriate structures and first-class professional services, will continue to play a really important role in both local and global organisations across all sectors of the financial services industry,’ said Evelyn Brady, partner and Guernsey office leader at PwC, the top ranked fund auditor by both numbers of funds and value.

Northern Trust remains leading administrator, with total net assets of more than $101bn, custodian and transfer agent in the local market.

‘This report showcases Guernsey’s appeal as a top-tier fund domicile as it continues to attract and retain leading fund managers, especially in the private equity and private debt sectors,’ said Dave Sauvarin, head of Northern Trust, Channel Islands.

‘They are drawn by a combination of Guernsey’s longstanding experience, teamed with a pragmatic approach to fund servicing. These attributes are key to supporting managers to meet and respond to the challenges of the rapidly evolving global marketplace.’

The largest asset managers are Apax Partners, followed by Cinven, Permira and HgCapital, all with serviced funds valued at more than $30bn.

Carey Olsen leads the market for legal advisers.