Funds industry boom shows no sign of ending

THE funds sector boomed in the second quarter. 'We see no reason why the strong growth that is evidenced by these latest figures should not continue,' said John Le Prevost, chairman of the Guernsey Investment Funds Association.

The total value of funds grew by more than '8.5bn during the second quarter of 2005 to stand at '84.1bn.

Over the year to June, the total value of funds grew by more than '20bn, an increase of 32.1%.

Mr Le Prevost said he was delighted with the success of the funds sector and paid tribute to GuernseyFinance, the body charged with promoting the island's finance industry.

Peter Niven, chief executive of GuernseyFinance, described the growth in business as outstanding.

'The statistics are a further endorsement of Guernsey as the jurisdiction of choice for fund promoters,' said Mr Niven.

Growth has been consistent since 1999 and shows no sign of slowing down.

GuernseyFinance has busily promoted the sector throughout the last six months, representing the island at three major conferences and inviting journalists from investment publications to come here.

The Guernsey Financial Services Commission safeguards investors and has also worked closely with the business community to create an attractive environment.

'The statistics are very encouraging,' said Peter Neville, director general of the regulator body.

'Recent initiatives have enhanced the regime for hedge funds and have provided a more efficient system for dealing with funds aimed at professional and experienced investors.

'The success of these policies can be seen in the figures which reflect growth right across the funds sector.

'That trend looks set to carry on at least in the near future.'

The new Qualifying Investor Fund regime has played its part in drawing funds to the island.

Launched in February, the number of QIF funds has grown steadily from six in May to 12 at the end of June.

The regime provides fast-track licensing for funds that meet certain criteria.

Mr Neville added that the commission would continue to open new markets for funds and firms based in Guernsey.

'The recent signing of a Letter of Intent with the Hong Kong Securities and Futures Commission is an example of the steps we are taking,' he said.

n Open-ended funds showed the strongest growth, rising in value by '5.3bn, or 14.5%, to '41.5bn over the quarter.

Closed-end funds increased by '1.6bn and stood at '25.2bn, an increase of 6.9%.

Non-Guernsey schemes, with some management or administration in the Bailiwick, grew by '1.6bn during the quarter, or 10%, to reach 17.3bn.